Demand surges for medium-voltage MCCs, soft starters from oil, water industries

Revenue for MCCs and soft starters used for oil and gas extraction, manufacturing and transportation will rise to $287 million in 2016.


IMS Research (acquired by IHS, Inc.)Spurred by high energy prices and government spending on infrastructure, the oil and gas business along with the water and wastewater industry in the coming years will generate the largest growth of all application markets for medium-voltage motor control centers (MCCs) and soft starters.

Revenue for MCCs and soft starters used for oil and gas extraction, manufacturing and transportation will rise to $287 million in 2016, increasing at a compound annual growth rate (CAGR) of 6.9% from $206 million in 2011, according a new report from IMS Research, now part of IHS. Meanwhile, the water and wastewater segment in 2016 will generate $117 million in demand for MCCs and soft starters, growing at a CAGR of 5.4% from $90 million in 2011. In comparison, the overall market for MCC and soft starters used in all applications will expand by a CAGR of only 5.5% during the same period.

“Brent oil prices in 2011 and 2012 remained inflated, at $111 and $112 per barrel, respectively,” said Jared Kearby, analyst at IHS. “Because of this, oil companies invested capital to increase production capacity, thus generating sales and shipments of medium-voltage MCCs and soft starters. Meanwhile, MCCs and soft starters are seeing increased demand from the water and wastewater market as governments seek to replace outdated systems. Furthermore, growth in this segment is being fueled by new installations required for increased capacity, and the need to mitigate environmental impact.”

Investment in water and wastewater as well as oil and gas industries is particularly strong in emerging markets such as India, the Middle East and China.

Oil boom

In oil and gas applications, MCCs and soft starters are most often used to start medium-voltage motors, such as pumps and compressors utilized for extraction, manufacturing and transportation. MCC and soft starter demand from this area is forecast to continue to grow, as Brent oil prices will average $101 per barrel in 2013 and $93 per barrel in 2014, according to IHS current projections, a level that will spur further investment.

Source: IMS Research (acquired by IHS, Inc.)

Further, awareness of energy use is growing, because of higher electricity costs worldwide, and because of the need to reduce CO2 emissions. This will continue to boost shipments of medium voltage MCC and soft starter shipments into the oil and gas industries.

Water works

In the water and wastewater industry, medium-voltage MCC and soft starter growth is forecast through 2016 because of potential opportunities to replace outdated systems. There is also growth in the industry from new installations because of expanding urban areas. New systems are also being installed that reduce damage to the environment, such as treatment facilities that handle rainwater run-off in urban locations.

In addition, applications such as water purification, collection and distribution commonly require pumps; high functionality, however, is not necessary for most of these medium-voltage motors. The most critical function for a medium-voltage motor control in water applications is the ability to minimize water cavitation during motor startup, requiring a medium-voltage motor starter such as an MCC or soft starter.

No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2013 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
A cool solution: Collaboration, chemistry leads to foundry coat product development; See the 2015 Product of the Year Finalists
Raising the standard: What's new with NFPA 70E; A global view of manufacturing; Maintenance data; Fit bearings properly
Sister act: Building on their father's legacy, a new generation moves Bales Metal Surface Solutions forward; Meet the 2015 Engineering Leaders Under 40
Cyber security cost-efficient for industrial control systems; Extracting full value from operational data; Managing cyber security risks
Drilling for Big Data: Managing the flow of information; Big data drilldown series: Challenge and opportunity; OT to IT: Creating a circle of improvement; Industry loses best workers, again
Pipeline vulnerabilities? Securing hydrocarbon transit; Predictive analytics hit the mainstream; Dirty pipelines decrease flow, production—pig your line; Ensuring pipeline physical and cyber security
Upgrading secondary control systems; Keeping enclosures conditioned; Diagnostics increase equipment uptime; Mechatronics simplifies machine design
Designing positive-energy buildings; Ensuring power quality; Complying with NFPA 110; Minimizing arc flash hazards
Building high availability into industrial computers; Of key metrics and myth busting; The truth about five common VFD myths

Annual Salary Survey

After almost a decade of uncertainty, the confidence of plant floor managers is soaring. Even with a number of challenges and while implementing new technologies, there is a renewed sense of optimism among plant managers about their business and their future.

The respondents to the 2014 Plant Engineering Salary Survey come from throughout the U.S. and serve a variety of industries, but they are uniform in their optimism about manufacturing. This year’s survey found 79% consider manufacturing a secure career. That’s up from 75% in 2013 and significantly higher than the 63% figure when Plant Engineering first started asking that question a decade ago.

Read more: 2014 Salary Survey: Confidence rises amid the challenges

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.