The Captive Power Plant Market is estimated to be valued at US$ 25.99 Bn in 2023 and is expected to exhibit a CAGR of 13% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

A captive power plant refers to a power generating facility set up by an entity to produce electricity primarily for its own consumption. It is usually located within the premises of the entity and is typically used by industrial concerns, commercial establishments and infrastructure companies. The power generation may be through conventional energy sources such as coal, diesel or natural gas or renewable energy sources including solar, wind and hydro. Some key benefits of captive power plants are reliability of supply, cost savings over grid power tariffs and ability to utilize waste heat from the generating facility for other applications. The growing demand from sectors such as metals, cement, automotive and food processing is driving the captive power plant market.

Market Dynamics:

The captive power plant market is expected to gain significant momentum over the forecast period, propelled by rising electricity consumption across industrial and commercial sectors coupled with unreliable power supply from state utilities in developing nations. According to the International Energy Agency, industrial electricity demand is projected to grow by over 2.5% annually till 2040. Furthermore, implementation of stricter emission standards on conventional power plants is encouraging industries to set up cleaner captive renewable energy systems. For example, surge in solar park projects by companies to meet their green power commitments. Rising focus on co-generation from waste heat to improve overall efficiency is another factor stimulating captive power installations.

Segment Analysis

The captive power plant market is broadly categorized into thermal and renewable segments. Among these, the thermal segment dominates the global captive power plant market and is estimated to hold over 75% of the market share in 2023. Thermal plants use fossil fuels such as coal, gas and diesel as their primary fuel source to produce electricity which makes them a more economical choice for industries compared to other alternatives. Their higher reliability in supplying base load power round the clock makes them the primary choice for large and energy intensive industries.

PEST Analysis

Political: Governments across countries are pushing for renewable energy adoption through various incentives and policies. This could impact the growth of thermal captive power plants.

Economic: Rising electricity prices from utilities in developing countries is a key driver for captive power plant installations. The global economic slowdown due to COVID-19 pandemic had negatively impacted the market growth.

Social: Increasing awareness about carbon emissions and need for sustainable development is nudging industries toward renewable energy adoption for their captive needs over thermal sources.

Technological: Technological advancements are making renewable energy options such as solar PV and wind more efficient and cost competitive. This is gradually increasing their acceptability as alternative sources for captive power generation.

Key Takeaways

The Global Captive Power Plant Market Size is expected to witness high growth, exhibiting 13% CAGR over the forecast period, due to increasing industrialization and growing electricity demand from manufacturing sector globally. The Asia Pacific region is anticipated to dominate the global captive power plant market during the forecast period. China, India and countries in Southeast Asia are witnessing rapid industrialization which is driving the captive power plant installations to meet their in-house electricity needs.

Regional analysis

The Asia Pacific region is estimated to hold over 50% share of the global captive power plant market in 2023 owing to strong presence of manufacturing industries especially in China and India. Both the countries have witnessed rising captive power generation capacities over the years to sustain their industrial growth.

Key players operating in the captive power plant market are Wartsila, AES Corporation, Dalkia, Vegawatt Power Pvt Ltd, Ducon Technologies, General Electric, Thermax, Cethar Limited, Clarke Energy, Siemens, Doosan Heavy Industries & Construction, MAN Energy Solutions, Yanmar Co., Ltd., Kawasaki Heavy Industries Ltd., Mitsubishi Heavy Industries Ltd., Meidensha Corporation, Kirloskar Oil Engines Ltd., Greaves Cotton Limited, Cummins Inc., Caterpillar Inc.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it