Heat Recovery Steam Generator Market Size (2026-2030)

The Heat Recovery Steam Generator (HRSG) Market was valued at USD 2.38 billion in 2025 and is projected to reach a market size of USD 3.12 billion by the end of 2030. Over the forecast period of 2026-2030, the market is projected to grow at a CAGR of 5.6%.

The Heat Recovery Steam Generator (HRSG) market serves as the critical thermal bridge between gas turbine technology and high-efficiency steam cycles, playing a pivotal role in the global transition toward more sustainable power generation. An HRSG is essentially a massive, highly engineered heat exchanger that recovers extreme waste heat from the exhaust of a gas turbine, energy that would otherwise be vented into the atmosphere, and converts it into high-pressure steam. This steam then drives a secondary steam turbine to generate additional electricity (in Combined Cycle Gas Turbine or CCGT plants) or is used for industrial processes (in Cogeneration or CHP plants). The market is currently undergoing a significant renaissance, driven by the global imperative to maximize energy efficiency and reduce the carbon intensity of fossil-fuel-based power. As nations move away from coal but still require firm, dispatchable power to balance intermittent renewables, natural gas-fired CCGT plants equipped with advanced HRSGs are becoming the baseload solution of choice. Looking ahead, the market is also exploring the implications of hydrogen blending in gas turbines, which alters exhaust gas characteristics and requires distinct HRSG material and design considerations, positioning the sector at the forefront of the hydrogen economy.

Key Market Insights:

• According to McKinsey & Company, industrial waste-heat recovery remains “largely untapped,” despite representing a global energy-savings opportunity potentially worth up to €140 billion per year, comparable to the total value of all-natural gas imported by the European Commission. McKinsey & Company

• Horizontal Drum technology accounts for approximately 61.2% of the total market share in 2025, favored for its lower capital cost and ease of maintenance in non-space-constrained environments.

• New HRSG installations in 2025 are enabling Combined Cycle Power Plants (CCPP) to achieve thermal efficiencies exceeding 63%, a statistic that serves as a primary selling point for upgrading aging infrastructure.

• The industrial cogeneration segment is witnessing a surge, with over 150 new small-to-mid-scale HRSG units commissioned globally in 2025 specifically for captive power and process steam in chemical and refining sectors.

• The Asia-Pacific region alone accounts for USD 1.02 billion of the 2025 market value, driven by massive gas-to-power initiatives in Southeast Asia and industrial expansion in India.

• Approximately 18% of the 2025 market revenue is derived from the retrofit and refurbishment of existing units, as utilities seek to extend the life of assets rather than build new ones.

• The >100 MW power rating segment commands 58% of the total revenue, underscoring the market's continued reliance on large-scale utility projects despite the growth of decentralized power.

• In 2025, 12% of all new HRSG orders explicitly specified "H2-Readiness" in their tender requirements, necessitating advanced metallurgy to handle the higher moisture content and temperatures of hydrogen combustion exhaust.

Market Drivers:

The primary driver for the HRSG market is the global shift toward Combined Cycle Gas Turbine (CCGT) power plants as the "bridge" technology for energy transition.

Unlike simple cycle plants that waste significant energy, CCGT plants paired with high-performance HRSGs can increase net plant efficiency by nearly 50%. As governments enforce stricter carbon emission limits (such as the EU's Emissions Trading System and similar frameworks in Asia), utilities are compelled to maximize every unit of fuel. The HRSG is the linchpin of this efficiency, allowing power producers to generate up to 50% more electricity from the same fuel input without any additional emissions, making it an economic and environmental necessity.

A second robust driver is the rising adoption of Cogeneration (Combined Heat and Power - CHP) across energy-intensive industries like chemicals, refining, pulp & paper, and textiles.

These sectors are under immense pressure to reduce their carbon footprint and operational costs. An HRSG allows these industries to capture waste heat from their on-site power generation turbines and use it for critical process heating, steam, or chilling. This "waste-to-value" proposition is driving a wave of decentralized HRSG installations, particularly in regions with high industrial electricity tariffs, as it offers a dual benefit of energy autonomy and regulatory compliance.

Market Restraints and Challenges:

The HRSG market faces significant hurdles, most notably the high initial capital expenditure (CAPEX) and logistical complexity associated with installation. These are massive, custom-engineered structures often weighing thousands of tons, requiring specialized transport and extended construction timelines that can deter investment in price-sensitive markets. Additionally, the rapid growth of battery energy storage systems (BESS) poses a competitive threat. As battery costs plummet, they offer an alternative for grid stabilization and peaking power that doesn't require the complex thermal cycle of a gas plant, potentially shrinking the addressable market for HRSGs in short-duration peaking applications.

Market Opportunities:

A major market opportunity lies in the retrofit and modernization of aging coal-fired plants to gas-fired operation (coal-to-gas switching). Many utilities are repurposing existing steam turbine infrastructure by replacing coal boilers with gas turbines and HRSGs, saving significant costs compared to greenfield projects. Furthermore, the emergence of hydrogen-fired gas turbines presents a technological frontier; developing specialized HRSGs capable of handling the unique exhaust profiles of 100% hydrogen combustion, which produces higher water vapor content and different heat transfer coefficients, offers a lucrative first-mover advantage for innovative manufacturers.

HEAT RECOVERY STEAM GENERATOR MARKET REPORT COVERAGE:

Heat Recovery Steam Generator Market Segmentation:

Heat Recovery Steam Generator Market Segmentation by Design:

• Horizontal Drum

• Vertical Drum

• Once-Through

The Horizontal Drum type is the most dominant segment, commanding the majority of the market share due to its proven reliability, lower manufacturing cost, and ease of maintenance, where land availability is not a constraint. It is the standard for large, greenfield utility projects.

The Once-Through design is the fastest-growing segment. It eliminates heavy, thick-walled drums, allowing for much faster start-up times and unlimited daily cycling. This makes it perfectly suited for modern grids that need flexible power to back up intermittent renewables.

Heat Recovery Steam Generator Market Segmentation by Distribution Channel:

• Direct Sales/OEM

• Third-Party Distributors & EPC Contractors

• Online Procurement Platforms (Spare Parts)

Direct Sales/OEM is the most dominant channel. Given the highly customized, engineered-to-order nature of HRSGs, utility and industrial clients almost exclusively contract directly with major manufacturers (like GE or Siemens) or their primary EPC partners to ensure technical integration.

Third-Party Distributors & EPC Contractors is the fastest-growing channel, particularly for the smaller, standardized "package" HRSG units used in industrial applications. Local EPCs are increasingly acting as the primary channel for these smaller projects, bundling the HRSG with other plant balance-of-plant equipment.

Heat Recovery Steam Generator Market Segmentation by Application:

• Utility/Power Generation

• Industrial Cogeneration

• Combined Cycle & CHP

• Small Scale/Decentralized

Utility/Power Generation is the most dominant application, driven by the sheer scale of national grid infrastructure projects. Large centralized CCGT plants require the largest and most expensive HRSG units, generating the bulk of industry revenue.

Industrial Cogeneration is the fastest-growing application. As manufacturing hubs in developing economies expand and mature markets seek energy efficiency, the installation of mid-sized HRSGs for factory-level power and steam is outpacing the growth of massive utility projects in terms of unit count.

Heat Recovery Steam Generator Market Segmentation by Power Rating:

• 0-30 MW

• 31-100 MW

• 100 MW

>100 MW is the most dominant power rating segment. These large units are essential for utility-scale Combined Cycle plants and account for the highest contract values, often exceeding hundreds of millions of dollars per project.

0-30 MW is the fastest-growing segment. This growth is fueled by the decentralized energy trend, where universities, hospitals, and industrial parks are installing smaller gas turbines with micro-HRSGs to ensure energy security and reduce reliance on unstable central grids.

Heat Recovery Steam Generator Market Segmentation: Regional Analysis:

• North America

• Europe

• Asia-Pacific

• Middle East & Africa

• South America

Asia-Pacific dominates the market with a 43% share, driven by China's aggressive industrialization and the region's massive shift from coal to natural gas for power generation. The sheer volume of new capacity additions in China, India, and Southeast Asia cements its leadership.

The Middle East & Africa are the fastest-growing regions. This is propelled by the region's abundance of natural gas and a strategic pivot toward efficient power generation and water desalination (which often uses HRSG steam). Massive infrastructure projects in Saudi Arabia and the UAE are accelerating demand.

COVID-19 Impact Analysis:

The COVID-19 pandemic caused a distinct "V-shaped" disruption in the HRSG market. In the short term (2020-2021), it led to project delays and a freeze on capital expenditure as industrial demand for power plummeted and supply chains for steel and components were severed. However, the recovery has been robust. The pandemic highlighted the need for resilient, automated infrastructure, accelerating the shift toward digitalized remote monitoring for HRSG units. Furthermore, post-pandemic stimulus packages focused on "green recovery" have catalyzed investments in cleaner natural gas and cogeneration projects, ultimately boosting the market's long-term trajectory.

Latest Market News:

• November 2025: GE Vernova announced the commencement of commercial operations at the Tongyeong Eco Power plant in South Korea, a key project utilizing their advanced HRSG technology to support regional grid stability.

• December 2024: Petroleum Sarawak (Petros) confirmed a USD 280 million investment for a new 500MW Combined Cycle Gas Turbine (CCGT) power plant in Miri, Sarawak, which will include state-of-the-art heat recovery systems.

• August 2025: The Chinese government released its 2024-2025 Action Plan for Energy Conservation, explicitly targeting high-emission sectors like steel and petrochemicals, mandating the installation of waste heat recovery systems including HRSGs.

• October 2025: Siemens Energy secured a major contract to upgrade the heat recovery systems of three aging power plants in Germany, fitting them with "H2-Ready" HRSG components to prepare for future hydrogen blending.

• September 2024: Nooter/Eriksen announced a strategic partnership with a leading AI firm to deploy predictive maintenance software across their installed base of HRSGs, aiming to reduce unplanned downtime by 20%.

Latest Trends and Developments:

The most significant trend is the modularization of HRSG design. Manufacturers are moving away from "stick-built" (assembled on-site) units to "C-Frame" or fully modularized shipping units to reduce costly and risky site labor. Another key development is Fast-Start Technology. With renewables causing grid volatility, new HRSGs are designed with "benson" or once-through technologies that allow them to go from cold iron to full load in under 30 minutes, mimicking the flexibility of peaker plants but with combined-cycle efficiency. Finally, Digital Twins are becoming standard, where a virtual replica of the HRSG simulates thermal stress in real-time to optimize lifespan.

Key Players in the Market:

1. GE Vernova

2. Siemens Energy AG

3. Mitsubishi Power (MHI)

4. Nooter/Eriksen

5. John Cockerill

6. Babcock & Wilcox Enterprises

7. Thermax Ltd.

8. Doosan Enerbility

9. Hamon & Cie (International) S.A.

10. Vogt Power International