Power Engineering, Procurement, And Construction (EPC) Market – Trends Forecast Till 2031

Market Snapshot

Market Overview

The global Power Engineering, Procurement, And Construction (EPC) Market size was estimated at USD 730,190 million in 2024 and is projected to reach USD 1,083,516.56 million in 2031 at a CAGR of 5.8 % during the forecast period 2025-2031.

The Power Engineering, Procurement, and Construction (EPC) market plays a crucial role in the development and execution of large-scale power infrastructure projects. This market involves three key stages: engineering, procurement of materials and equipment, and construction. EPC contractors are responsible for delivering integrated solutions for power generation projects, including thermal, renewable, and nuclear power plants. The growth of this market is closely tied to the global demand for energy, especially with the increasing shift toward renewable energy sources to meet sustainability goals and reduce carbon emissions.

The scope of the EPC market extends to various types of power generation plants, including coal, gas, solar, wind, and hydroelectric. As governments and private players focus on diversifying energy sources and modernizing infrastructure, the demand for EPC services in the energy sector continues to rise. The market also includes grid development and energy storage projects, which are crucial for enhancing the stability and efficiency of power distribution networks. The growing adoption of smart grids and the transition to cleaner energy further expand the EPC market's scope, especially in emerging markets where energy access remains a critical issue.

Trends in the EPC market are shaped by the global emphasis on sustainability, digitalization, and cost efficiency. The rise of renewable energy projects, such as wind and solar power plants, is a major trend, as nations aim to meet their climate goals. Additionally, the integration of digital technologies, including advanced project management software, AI, and automation, is transforming the way EPC companies design and execute projects. These innovations are improving project delivery timelines, reducing costs, and enhancing the efficiency of power generation systems. Furthermore, growing investments in energy storage and grid modernization are contributing to the expansion of the EPC market.

The drivers of growth in the EPC market include rising global energy demand, the shift towards cleaner energy, and increasing investments in infrastructure development. Government policies and incentives promoting renewable energy adoption, along with private sector participation in large-scale energy projects, are significant contributors to market expansion. However, challenges such as project delays, cost overruns, and regulatory complexities remain. Despite these challenges, the EPC market is poised for growth as energy transition efforts continue and technological advancements help streamline project delivery and execution.

Impacts USA tariff rates on the Power Engineering, Procurement, And Construction (EPC) Market

The imposition of President Trump’s 2025 tariffs, including a 10% global tariff and higher reciprocal tariffs on countries with significant trade deficits, has significantly disrupted the Power Engineering, Procurement, and Construction (EPC) market. The increased tariffs on critical components such as steel, aluminum, and specialized electrical equipment, particularly from countries like China and the European Union, have driven up procurement costs for EPC projects. For instance, the 25% tariff on steel and higher duties on Chinese-manufactured turbines and solar panels have led to cost overruns in power plant construction and renewable energy projects. Retaliatory tariffs from trading partners, such as China’s restrictions on rare earth elements, have further strained supply chains, causing delays in project timelines and squeezing profit margins for EPC firms. These disruptions have also prompted some companies to pause investments in new power infrastructure, as higher costs challenge project feasibility, particularly in cost-sensitive renewable energy sectors.

Delvens Industry Expert's Standpoint

Experts in the Power Engineering, Procurement, And Construction (EPC) Market highlight several key trends driving growth and innovation. The Power Engineering, Procurement, and Construction (EPC) market is essential for developing and executing large-scale power infrastructure projects, including renewable, thermal, and nuclear power plants. Driven by global energy demand and the shift towards sustainable energy, the market encompasses engineering, procurement, and construction services, including grid and energy storage projects. Key trends include the rise of renewable energy projects, digitalization, and the integration of advanced technologies to improve efficiency and reduce costs. Growth is fueled by government incentives, increasing energy investments, and the transition to cleaner energy, despite challenges like project delays and regulatory complexities.

Analyst view on the impacts of U.S. tariff rates on the Power Engineering, Procurement, And Construction (EPC) Market

Looking ahead, the Power EPC market faces a complex future shaped by the ongoing trade tensions and adaptive strategies. While the tariffs may encourage some domestic manufacturing of power equipment, the transition to localized supply chains will be slow, with near-term challenges persisting due to limited U.S. production capacity for specialized components. EPC firms are likely to prioritize supply chain diversification, seeking alternative suppliers in countries like India or Turkey to mitigate tariff impacts. However, the market could see growth in sectors aligned with national security priorities, such as grid modernization and nuclear energy, driven by government incentives to bolster energy independence. Despite these opportunities, persistent inflation and potential global trade wars may dampen investor confidence, leading to cautious expansion in large-scale power projects. The market’s resilience will depend on firms’ ability to innovate in cost management and navigate an increasingly fragmented global trade landscape.

Market Portfolio

Key Findings

• Based on Power Generation: This segment of the EPC market focuses on the construction and setup of power plants across various energy sources. Thermal Power remains a dominant category, encompassing coal, natural gas, and oil-based power plants. These projects typically involve large-scale infrastructure and complex engineering requirements, especially in developing economies where thermal energy is still a primary electricity source. Nuclear Power EPC projects are highly specialized and capital-intensive, requiring strict regulatory compliance, safety systems, and long project timelines. Although nuclear projects are fewer in number, they represent a significant portion of EPC value due to complexity and scale. Renewables include solar, wind, hydro, and other sustainable energy sources. This segment is experiencing the fastest growth, driven by global climate targets and investments in clean energy. Renewable EPC projects often have shorter timelines and are becoming more modular and cost-efficient. Each of these sub-segments has different engineering, procurement, and construction needs, influencing how EPC firms structure their operations.

• Based on Power Transmission and Distribution (T&D): This segment addresses the infrastructure needed to transmit electricity from generation sites to end users. Power Transmission involves high-voltage infrastructure, such as substations and transmission lines that carry electricity over long distances. EPC companies working in this space handle grid integration, cross-border interconnections, and upgrades to aging infrastructure. With the rise in renewable energy, there’s increased demand for flexible transmission systems that can handle intermittent energy sources. Power Distribution, on the other hand, focuses on the delivery of electricity to homes and businesses through lower-voltage networks. Projects here include building and modernizing local substations, smart grid deployments, and metering systems. With urbanization and rising electricity demand, especially in emerging markets, distribution EPC projects are seeing steady growth. Together, these segments are critical for ensuring reliable energy access and optimizing energy flow across regions.

• The market is also divided into various regions such as North America, Europe, Asia-Pacific, South America, and Middle East and Africa. Asia-Pacific region is projected to hold the largest market share. Factors such as Rising Energy Demand, Growing Investment in Renewable Energy, Increasing Infrastructure Development, Government Initiatives and Policies, Technological Advancements in Power Generation, Expansion of Smart Grid Systems, Rising Focus on Energy Efficiency, High Demand for Transmission and Distribution Infrastructure, Increased Focus on Sustainability and Green Energy Projects, Growing Industrialization and Urbanization have triggered the Power Engineering, Procurement, And Construction (EPC) Market in the region.

Regional Analysis

Asia-Pacific to Dominate the Market

• In North America, the Power EPC market is driven by significant investments in both traditional energy (such as natural gas and nuclear) and renewable energy sources (wind, solar, and hydroelectric). The U.S. has been at the forefront of deploying large-scale renewable energy projects, which is influencing the demand for EPC services. The market is also supported by stringent regulatory frameworks, a stable energy demand, and major infrastructure projects, especially with the ongoing transition toward cleaner energy. Canada, with its commitment to reducing carbon emissions, also contributes significantly to this market with increasing investments in renewable energy projects. The EPC market is growing due to the diversification of energy sources and the modernization of the energy grid.

• In Europe, the Power EPC market is heavily influenced by the region's strong focus on sustainability and clean energy. Countries like Germany, France, and the UK are leading the way in transitioning to renewable energy, driving demand for EPC services for solar, wind, and offshore energy projects. Europe’s Green Deal and renewable energy targets are fueling growth, while investments in energy efficiency, smart grids, and the decarbonization of the energy sector also contribute to the market's expansion. The regulatory environment is conducive to clean energy development, which attracts both public and private investments. Although the region faces challenges related to the integration of renewable energy, the EPC market continues to benefit from long-term energy transition policies.

• In Asia-Pacific, the demand for EPC services is rapidly increasing due to the region’s growing energy needs, industrialization, and population growth. Countries like China, India, Japan, and South Korea are major players in both traditional and renewable energy sectors. China, being a leader in renewable energy installation, particularly in solar and wind power, has led the region's EPC market growth. India’s increasing energy demand, alongside its renewable energy goals, has also created substantial demand for EPC services. Moreover, Japan and South Korea continue to invest in energy infrastructure modernization and nuclear power plants, further boosting the demand for EPC contractors. The region’s expanding industrial base and government initiatives to meet energy security and sustainability goals are key drivers.

• In the Middle East and Africa, the Power EPC market is driven by major infrastructure and energy projects, particularly in the GCC countries (Saudi Arabia, UAE, Qatar, and Kuwait). The region's vast investment in both traditional power generation (oil, gas, and nuclear) and renewable energy (especially solar) is propelling the EPC market. Saudi Arabia’s Vision 2030 and the UAE’s focus on clean energy initiatives like Masdar City are central to the growing EPC market. The growing interest in expanding energy access in sub-Saharan Africa is another contributing factor. However, political instability and regulatory hurdles in certain parts of Africa can pose challenges to market growth.

• In Latin America, the Power EPC market is growing due to the region's need for energy infrastructure development and expansion. Brazil, Mexico, and Argentina are the largest markets, with investments in both renewable energy (especially wind, solar, and hydroelectric) and traditional energy sources. Brazil, with its strong commitment to clean energy and significant hydroelectric power capacity, is a key player in the region’s EPC market. Mexico’s energy reform and focus on increasing renewable energy generation have also created demand for EPC services. Although the region faces challenges like political instability and fluctuating economic conditions, the long-term demand for energy infrastructure projects provides a steady market for EPC companies.

Competitive Landscape

• Fluor Ltd
• John Wood PLC
• Kiewit Corporation
• McDermott International Inc.
• Bechtel Corporation
• Saipem SpA
• Larsen & Toubro Limited
• KBR Inc

Recent Developments

• November 2024: Hyundai Engineering & Construction Co. of South Korea signed an EPC contract with Bulgaria's state nuclear power plant developer. The agreement, made with Kozloduy NPP-New Builds Plc (KNPP NB), involves the construction of two nuclear reactors at the Kozloduy nuclear complex. The total construction cost for these reactors is approximately USD 14.5 billion. Under the terms of the contract, Hyundai E&C will design two reactors, each with a 2,200-megawatt capacity, located around 200 km north of Sofia, Bulgaria's capital. Hyundai E&C, part of Hyundai Motor Group, collaborated with US-based Westinghouse Electric Co. to secure the project.

• July 2024: Indian company Megha Engineering & Infrastructures (MEIL) won a USD 1.53 billion contract to build two 700 MW reactors at the Kaiga nuclear power plant in Karnataka, India. The contract, awarded by the Nuclear Power Corporation of India (NPCIL), includes Engineering, Procurement, and Construction (EPC) services. Located in Uttara Kannada district, Kaiga's existing 880 MW facility has four 220 MW pressurized heavy water reactors (PHWRs). The new contract will add two more PHWR reactors, labeled units 5 and 6, to the plant.

• July 2024: PowerChina Huadong Engineering Corporation Limited secured an EPC contract for the Al Ajban Solar Photovoltaic Independent Power Plant in Abu Dhabi. This project, once completed, is set to become one of the world's largest single-site solar power plants. Expected to begin operations in Q3 2026, the initiative reflects the region's dedication to enhancing its sustainable energy infrastructure. In April, EDF Renewables, along with consortium partners KOWEPO and local stakeholder Masdar, signed a power purchase agreement with EWEC. This agreement designates the consortium to manage the design, financing, construction, and operation of the plant. Situated in Al Ajban, approximately 70 kilometers northeast of Abu Dhabi, the plant is expected to reduce carbon emissions by about 2.4 million tons annually and provide power to around 160,000 households.

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