Shanghai Electric wins Malaysia power plant deal, marking first overseas heavy-duty gas turbine export

Gas turbines, often hailed as the "crown jewel" of the manufacturing equipment industry, reflect a nation's comprehensive strength in high-end manufacturing. For years, the global heavy-duty gas turbine market has been dominated by a handful of foreign companies. Recently, however, this landscape has begun to shift.

Shanghai Electric has successfully won the bid for the Samalaju Combined Cycle Gas Turbine Unit 3 project in Sarawak, Malaysia. The company will supply the complete set of main equipment—including gas turbines, steam turbines, generators, heat recovery steam generators, and air cooling systems—for this 500 MW-class power plant. It will also undertake the EPC (Engineering, Procurement, and Construction) contract and provide a full lifecycle long-term service agreement for the main equipment.

This marks the first overseas application of a gas turbine manufactured by Shanghai Electric and represents a significant step for domestically produced heavy-duty gas turbines entering mature overseas markets.

"This is not just an equipment export; it is a substantive breakthrough for China's heavy-duty gas turbines in international commercial competition," said Li Wenkai, Deputy Director of the Power Generation Engineering Consulting Institute at the Electric Power Planning and Engineering Institute.

System Capability Beyond Equipment

The significance of this overseas deployment extends beyond the equipment itself to the system capabilities behind it.

Shanghai Electric is providing an integrated solution for the project, with all core main equipment manufactured by companies within the Shanghai Electric system and integrated as a unified whole.

This model of "coordinated manufacturing and unified integration of complete main equipment" is fundamentally different from the traditional multi-supplier patchwork approach.

According to a Shanghai Electric representative, under the multi-supplier model, the owner or EPC contractor bears primary responsibility for system integration, requiring self-coordination of interfaces, parameters, and control logic across different equipment. Shanghai Electric's integrated solution reduces interface risks at the source, achieving "four unifications": unified responsibility, unified technical interfaces, unified performance guarantees, and unified project management.

"Malaysia is a mature, commercially competitive market where owners select equipment based on technology, delivery, and full lifecycle costs," said Liu Zhitan, Deputy Director of the Gas Power Generation Committee under the Chinese Society for Electrical Engineering. "Shanghai Electric's gas turbine winning this bid means that Chinese gas turbine products and solutions are beginning to receive commercial validation in mature markets."

Localization as a Foundation

System capability is the foundation, but entering overseas mature markets also depends on localized experience.

International expansion has long been a core strategy for Shanghai Electric. In Malaysia, the company has previously undertaken projects including the Balingian 2×300 MW coal-fired power plant, the Selangor Phase 1 and Phase 2 renewable energy power plants, and the TG12 renewable energy project. It has also built a 106-kilometer 500 kV transmission line in Sarawak and the state's first off-grid microgrid project.

These projects have contributed not only overseas orders but also local project execution experience and a coordination mechanism between engineering, manufacturing, and local services. For large energy equipment companies, such localized accumulation is a critical foundation for core equipment to enter overseas markets.

From this perspective, the Samalaju project represents a concentrated realization of Shanghai Electric's overseas engineering experience and core equipment capabilities. A Shanghai Electric representative summarized it as an upgrade from a passive "engineering-driven equipment export" model to an active "complete machine product output" strategy, laying the foundation for the full-chain internationalization of technology, services, and brand.

Aligning with Global Market Demand

This shift aligns with changing international market demands. Overseas owners are no longer satisfied with fragmented procurement of individual equipment; they increasingly prefer one-stop, turnkey, full-lifecycle integrated solutions.

"For a long time, China's high-end equipment exports have mainly focused on single-unit equipment, with market competition centered on hardware pricing, resulting in limited profit margins and insufficient brand premium," Liu Zhitan noted. "Through its integrated service system, Shanghai Electric has moved beyond homogeneous competition in pure hardware, transitioning from single-point equipment output to systematic, ecosystem-based output of complete solutions, shaping a new image for China's high-end manufacturing brand."

Structural Supply Gap in Global Gas Turbines

This breakthrough also comes against a broader industry backdrop: a structural shortage in the global gas turbine market.

Data shows that in 2025, global demand for gas turbines (including aero-derivative, industrial, and heavy-duty types) is approximately 90–100 GW, while the annual production capacity of major global manufacturers is only 55–60 GW, leaving a supply gap of 30–40 GW.

Li Wenkai noted that amid tight supply conditions, overseas owners who previously prioritized traditional international giants are now exploring more supplier options and are willing to accept proven Chinese complete machine solutions with shorter delivery cycles.

However, the emergence of a market window does not mean lower competitive barriers. The greater challenge lies in converting a single project breakthrough into sustained market recognition through long-term operation and service.

Strategic Vision for the 15th Five-Year Plan Period

During the "15th Five-Year Plan" period, Shanghai Electric has set clear internationalization goals, proposing "three transformations": shifting from engineering-led overseas expansion to equipment-led overseas expansion; shifting from simple trade to international deployment of production capacity and industrial chains; and shifting from individual enterprises going global to coordinated, integrated overseas operations.

As Chinese companies engage deeply in global competition with system-level capabilities, the position of China's high-end equipment in the global energy landscape will continue to rise.