Group Management Report

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Trends in the markets for Power Engineering

In the Power Engineering segment, we expect the market environment to remain difficult in 2022. The course of the Covid-19 pandemic thus far and its consequences are resulting in continued uncertainty.

The 2022 market volume for merchant shipping is expected to dip below the level of the reporting year. Despite an expected higher volume of sea trade, combined with calls for high energy efficiency and low pollutant emissions, the market is anticipated to be slightly below the prior-year level due to high order figures in 2021 and the associated shipyard capacity utilization. By contrast, the market areas excluding merchant shipping are expected to reach a slightly higher level than in 2021. Following the recommencement of international travel, demand for cruise ships is forecast to improve slightly from the low level of the reporting year. The passenger ferry market is also expected to grow slightly. We are anticipating stable demand for government vessels. In the offshore sector, new order volumes for special applications such as offshore wind look set to be on the low side due to continued overcapacity. Overall, we expect the marine market to be at a slightly lower level than that seen in the reporting year with competitive pressure continuing.

The global spread of the Covid-19 pandemic and the measures taken to contain it have reduced demand for energy and made it harder to raise capital for investment in power generation plants. Uncertainty surrounding climate-neutral power generation and the route to achieving this goal can also be seen. The ultimate aim is to invest in future-proof power generation plants. Despite this impact and uncertainty on the power generation markets, we expect the trend toward decentralized future-proof power stations and gas-based applications to further intensify. In addition, demand for new and carbon-neutral technologies should continue to increase in future.

With regard to the market development for conventional power generation plants, we are anticipating a slow recovery of what has been a very weak order situation for many years, with increasing investment in power generation using biomass and natural gas as transitional energy sources. Consequently, we are assuming a slight increase in demand for steam and gas turbines. Growth in the power generation market will be driven by renewable energy in particular. The irregularity of power produced in this way will require an increase in storage capacity, which will result in a corresponding expansion of the market for turbocompressors and turboexpanders.

We are expecting good demand for turbomachinery in 2022 due to catch-up capital expenditure and strong demand for raw materials amid rising prices. It is expected that the production plants of market participants will be well utilized. This should result in a relaxation of the competition which had been intensified by the pandemic.

In 2022, we anticipate a slight recovery in the after-sales business for both diesel engines and turbomachinery. There may be a temporary catch-up effect in order intake following the postponement of projects over the past two years.

For the period 2023 to 2026, we expect to see growing demand in the power engineering markets. However, the extent and timing of this growth will vary in the individual business fields. It remains to be seen for how long the pandemic will continue to affect the market.