Thermal Power Plant Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Fuel Type (Coal, Natural Gas, Nuclear, and Others), By Capacity (400 MW, 400-800 MW, More than 800 MW), By Turbine Type (Simple Cycle, Combined Cycle), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 1.76 Trillion
CAGR (2026-2031)	3.95%
Fastest Growing Segment	Combined Cycle
Largest Market	North America
Market Size (2031)	USD 2.22 Trillion

Market Overview

The Global Thermal Power Plant Market will grow from USD 1.76 Trillion in 2025 to USD 2.22 Trillion by 2031 at a 3.95% CAGR. Thermal power plants are industrial facilities that generate electrical energy by converting heat from fuel sources such as coal, natural gas, and oil into steam to drive turbines. The market is fundamentally driven by the escalating demand for reliable baseload electricity in rapidly industrializing economies and the necessity to stabilize power grids against the intermittency of renewable energy infrastructure. These factors ensure continued reliance on thermal generation for consistent capacity output, distinct from temporary market fluctuations.

According to the Energy Institute, in 2024, global coal consumption exceeded 164 exajoules for the first time. However, a significant challenge impeding market expansion is the enforcement of stringent environmental regulations and carbon neutrality mandates, which compel the decommissioning of aging fossil fuel plants and increase compliance costs for operators.

Key Market Drivers

The primary driver of the market is the rising global electricity consumption and rapid industrialization, particularly in emerging economies where energy security is paramount. As manufacturing sectors expand and urbanization rates climb, the demand for consistent baseload power has surged, necessitating the continued reliance on thermal assets to stabilize grids against the intermittency of renewable sources. This dependency is evident in the resilience of fossil fuel generation despite decarbonization efforts. According to Ember, May 2025, in the 'Global Electricity Review 2025', global fossil fuel generation rose by 244 terawatt-hours (TWh) in 2024 to meet the escalating electricity demand. Furthermore, infrastructure development continues to support this growth, preventing a contraction in total capacity. According to Global Energy Monitor, April 2025, in the 'Boom and Bust Coal 2025' report, the global coal fleet saw a net increase of 18.8 gigawatts (GW) in 2024, driven largely by new commissions in Asia.

Simultaneously, the increasing shift towards natural gas as a transitional energy source is reshaping the thermal power landscape. Utilities are actively deploying natural gas-fired turbines to reduce carbon intensity while maintaining the dispatchable capacity required for grid balancing. This transition allows operators to navigate stringent environmental regulations without compromising power reliability, positioning gas as a critical bridge fuel. According to the U.S. Energy Information Administration, December 2025, in the 'Short-Term Energy Outlook', natural gas was projected to account for 40% of total U.S. electricity generation in 2025. This trend underscores the strategic pivot towards cleaner thermal technologies that sustain market momentum during the broader energy transition.

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Key Market Challenges

The enforcement of stringent environmental regulations and carbon neutrality mandates stands as a distinct barrier to the expansion of the Global Thermal Power Plant Market. These regulatory frameworks compel power generation companies to accelerate the decommissioning of carbon-intensive assets, particularly coal-fired facilities, often before they reach the end of their operational lifecycles. Consequently, utilities face substantial financial burdens arising from the premature retirement of assets and the escalation of operational expenditures required to install emission control technologies. This dynamic diminishes the economic viability of maintaining existing thermal fleets and deters future investment in fossil-fuel-based infrastructure.

The direct impact of these policies is evident in the sharp contraction of thermal generation activity in highly regulated regions. According to the International Energy Agency, in 2024, coal-fired power generation in the European Union fell by 15% due to high carbon prices and the rapid deployment of cleaner alternatives. This significant decline underscores how legislative mandates are actively shrinking the market share of thermal power, effectively overriding the demand for baseload capacity in developed economies committed to aggressive net-zero targets.

Key Market Trends

The integration of Carbon Capture, Utilization, and Storage (CCUS) systems is becoming a pivotal trend as operators decarbonize assets without retiring them. This technology enables facilities to sequester emissions at the source, maintaining dispatchable power output while complying with net-zero targets. Utilities are increasingly retrofitting plants with capture units to separate carbon from flue gas streams, effectively severing the link between fossil fuel combustion and atmospheric release. According to Energy Monitor, May 2025, in the 'IEA reports modest growth in CCUS projects' article, global operational capacity for capturing and storing carbon dioxide reached just over 50 million tonnes, reflecting a significant mobilization of abatement technologies across the power sector.

Concurrently, the implementation of biomass and ammonia co-firing is gaining traction as a method to lower the carbon intensity of coal-fired generation. Power producers are modifying boiler systems to blend these low-carbon fuels with conventional coal, reducing the overall greenhouse gas footprint while utilizing established infrastructure. This approach extends the operational life of thermal plants by displacing fossil fuels with hydrogen-derivative alternatives. According to China Shenhua Energy Company, February 2025, in the 'Top Ten Sci-tech Innovations of Energy Industry in 2024' announcement, their co-firing technology achieved stable combustion of up to 30% ammonia, capable of reducing carbon dioxide emissions by over 183,000 tonnes annually per unit.

Segmental Insights

The combined cycle segment represents the fastest-growing category within the global thermal power plant market, driven primarily by the urgent industry shift toward energy efficiency and emission reduction. This configuration utilizes waste heat from gas turbines to power steam turbines, thereby maximizing output without increasing fuel consumption. The segment's rapid expansion is further supported by stringent environmental mandates from regulatory bodies such as the US Environmental Protection Agency, which increasingly limit permissible emissions from traditional coal facilities. Consequently, utility operators are prioritizing combined cycle plants to ensure regulatory compliance while maintaining reliable electricity generation during the transition to cleaner energy sources.

Regional Insights

North America dominates the Global Thermal Power Plant Market, primarily driven by the shale gas revolution and extensive infrastructure modernization. The region is actively replacing aging coal-fired facilities with advanced combined-cycle natural gas turbines to enhance grid reliability and meet strict environmental mandates. According to the U.S. Energy Information Administration (EIA), natural gas has established itself as the leading source of electricity generation, significantly outpacing coal capacity. Furthermore, regulatory frameworks enforced by the Environmental Protection Agency (EPA) incentivize the transition toward cleaner thermal energy technologies, securing the region’s commanding market position.

Recent Developments

• In February 2025, Siemens Energy announced it would supply two advanced gas turbines and associated components for the Kuo Kuang 2 power plant in Taiwan. The company was selected to provide its HL-class gas turbine technology for the 1,200 megawatt combined cycle facility, which is intended to replace older, less efficient units. The new equipment is designed to enhance power generation efficiency and significantly reduce carbon dioxide emissions compared to previous operations. This project supports the local market's energy transition strategy by ensuring a reliable electricity supply while moving away from coal and nuclear power sources.
• In September 2024, Bharat Heavy Electricals Limited (BHEL) secured a major order from NTPC Limited for the expansion of a thermal power facility in Chhattisgarh, India. The engineering firm was awarded the engineering, procurement, and construction (EPC) contract for the Stage-III expansion of the Sipat Supercritical Thermal Power Project, which involves setting up a new 800 megawatt unit. The scope of the contract includes the supply of the boiler, turbine, and generator, as well as the erection and commissioning of the plant. This project aims to augment the installed capacity of the station to support regional power requirements.
• In August 2024, Mitsubishi Power received an order to supply core power generation equipment for a new gas turbine combined cycle (GTCC) facility in Sarawak, Malaysia. The contract, awarded by the engineering contractor for the project, involves the delivery of an M701F gas turbine and a steam turbine for the 500 megawatt Miri Combined Cycle Power Plant. The gas turbine is designed to be capable of co-firing up to 30 percent hydrogen, positioning the facility as a forward-looking infrastructure asset. This development aligns with the region's strategy to enhance energy security while transitioning toward lower-carbon energy sources.
• In April 2024, JERA commenced a groundbreaking demonstration project at its Hekinan Thermal Power Station in Aichi Prefecture, Japan. The utility began testing the substitution of 20 percent of heating value with fuel ammonia at a large-scale commercial coal-fired power plant. This initiative, conducted in collaboration with a heavy machinery manufacturer, represents a significant step toward reducing carbon emissions in thermal power generation. The project aims to verify the combustion characteristics and environmental impact of ammonia co-firing, contributing to the establishment of technology for cleaner thermal energy operations. The company plans to establish this technology for widespread use in the near future.

Key Market Players

• Nuclear Power Corporation of India
• India Power Corporation Ltd
• NTPC Limited
• Adani Power Limited
• Maharashtra State Power Generation Co. Ltd
• Duke Energy Corporation
• American Electric Power Company, Inc.
• Siemens AG
• General Electric Company
• Chubu Electric Power Co. Inc.,

By Fuel Type	By Capacity	By Turbine Type	By Region
Coal Natural Gas Nuclear Others	400 MW 400-800 MW More than 800 MW	Simple Cycle Combined Cycle	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Thermal Power Plant Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Thermal Power Plant Market, By Fuel Type:

• Coal
• Natural Gas
• Nuclear
• Others

• Thermal Power Plant Market, By Capacity:

• 400 MW
• 400-800 MW
• More than 800 MW

• Thermal Power Plant Market, By Turbine Type:

• Simple Cycle
• Combined Cycle

• Thermal Power Plant Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE