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The global diesel generator market size was USD 16.89 billion in 2021. The market is expected to grow from USD 17.92 billion in 2022 to USD 26.09 billion in 2029 at a CAGR of 5.5% in the 2022-2029 period. The global impact of COVID-19 has been unmatched and staggering, with the diesel gensets witnessing a lower-than-anticipated demand across all regions compared to the pre-pandemic levels. Based on our analysis, the global market had exhibited a decline of -9.7% in 2020 as compared to 2019.
The extraordinary global development in residential, commercial, and industrial sectors across regions has increased demand for uninterrupted power. This requirement has led to the market growth in the industrial and residential sectors. The diesel generator (DG) technology is an established method of producing energy by utilizing crude oil to serve emergency power requirements. The product is widely used to deliver electricity by converting chemical energy od diesel fuel using various equipment such as AC alternator, control panel, fuel tank, radiator, engine, and many more. DG sets are commonly set up to power hospitals, homes, schools, factories, construction sites, and other verticals, either as the primary or backup power source in case of grid failures.
Shut Downs in Industrial Operations During the COVID-19 Weakened Potential for DG Set Installations
The outbreak of the coronavirus has noticeably weakened industrial processes across the globe. The number of infected patients witnessed a constant rise driving different nations to implement national lockdowns and social distancing. Consequently, the closure of industries significantly affected the market due to this global pandemic.
The obstruction in the initiation of new end-user projects owing to the unobtainability of required capital has significantly narrowed the incorporation of new systems. The instabilities in heavy-duty processes such as construction activities, mining, hydrocarbon exploration & production, fabrication of new commercial substructures, and others have led to an unmatched decrease in product demand. According to the World Energy Investment Report, the International Energy Agency (IEA) stated that the global investment in the energy sector fell by about USD 400 billion, or one-fifth, in 2020 compared to 2019. Even though there is a rebound in energy investments in 2021, greater efforts are required to achieve energy independence.
Increasing Efforts to Combat Power Outages to Propel Diesel Generator Market Growth
Various tasks by public and private entities are considerably disturbed by transmission & distribution networks failures due to multiple factors such as cable faults, climatic problems, and grid system breakdowns. Several authorities, such as the U.S. Department of Energy (DoE) and the European Union (EU), are gradually accepting measures to integrate a standby source to provide a continuous power supply.
In February 2021, over four million residents across Texas suffered a blackout after being affected by the winter storm and cold wave. Moreover, the power outage obstructions lasted for over half a week, leaving the masses' household and commercial chores in jeopardy. These circumstances create awareness among the consumers to adopt a reliable backup power source.
New Product Advancements By Major Players to Effectively Withstand Challenging Atmospheres to Add to Industry Pace
Several businesses in the DG Set market are focused on expanding their application horizons across DG offerings. Besides, the companies also concentrate on launching new products with different power ratings to operate effectively in harsh conditions. For instance, In August 2021, Cummins India Limited unveiled a first-of-its-kind ‘Made in India’ - QSK60 G23: 2500-2750 kVA DG Set with the ability to provide a high power density that leaves a minimum footprint, has a low downtime, and a lower cost.
Significant Expansions in Oil & Gas Sector will Propel Technology Demand
Oil and gas consumption has increased tremendously, owing to its increasing applications across diverse industry verticals. Furthermore, growing discoveries of new large hydrocarbon reserves and the exploitation of offshore wells are set to cater to the demand for diesel generator sets. For instance, in September 2021, Baker Hughes announced that the U.S. added 9 rigs week on week, taking the total rig count to 521, out of which 421 produce oil, 99 have gas, and 1 is a miscellaneous rig. 509 rigs out of these are land rigs, 10 are offshore, and 2 are inland water rigs.
Rapidly Developing Industrial Infrastructure Along With Increasing Energy Demand to Complement Industry Landscape
The increasing demand to address rising production activities worldwide is set to boost the diesel genset market. Additionally, increasing expenses and investments to deliver efficient energy management across different sectors is set to unveil new growth opportunities for the industry. For instance, In May 2021, the U.S Energy Information Administration (EIA) stated that the total national energy consumption equaled 93 quadrillion British thermal units (Btu) in 2020, with over 36% accounting for the industrial sector. In contrast, the residential and commercial divisions constituted over 16% and 12%, respectively.
Prominent organizations across the world have introduced various regulatory frameworks and targets to enhance green technology adoption to weaken the dependency on fossil fuels. Countries are setting high green energy targets and investing in renewable power sources that may obstruct the diesel genset market. Additionally, introducing stringent regulations to curb discharges of damaging substances also poses a shortcoming to product adoption.
Above 750 kVA Segment to Hold Considerable Share Backed by Continuous High Power Operations
Based on power rating, the global diesel generators market is segmented into below 75 kVA, 75-375 kVA, 375-750 kVA, and above 750 kVA. Growing demand for heavy-duty applications across different industries are set to propel the above 750 kVA segment size. Additionally, the growth of below 75 kVA and 75-375 kVA segments are primarily favored by the flourishing residential and commercial sectors, coupled with the setup of small and medium businesses.
Portable Units are Poised to Grow at a Considerable CAGR during Forecast Timeframe
Based on portability, the industry is split into portable and stationary. The stationary segment dominated the market in 2021, as generally, portable generators run on other fuels such as natural gas, liquid propane, etc. However, the portable segment is projected to observe significant growth from 2022 to 2029, owing to increasing government initiatives to deliver efficient power generation alternatives in remote areas. The portable devices also require less maintenance and provide longer runtime to operational efficiency. Besides, stationary systems are also likely to observe substantial share owing to growing needs to serve high power requirements over longer periods.
Growing Need for Uninterrupted Power Supply Will Aid Market Growth
Based on application, this market can be majorly divided into the continuous load, peak load, and standby load. Increasing demand for reliable power supply in remote places to cope with poor grid infrastructure is set to augment the continuous load segment growth. The peak load segment size is set to observe a significant increase due to growing manufacturing operations and the setup of high-power industrial units with variable load operations. Additionally, the growth of stand-by load division is backed by increasing energy security concerns across different end-users.
Increasing Remote Working Trend is set to Augment the Residential Segment
Based on end-user, the DG set market includes sectors like mining, oil & gas, construction, residential, marine, manufacturing, pharmaceuticals, commercial, telecommunication, electric utility, data centers, and others. The coronavirus pandemic gave rise to the concept of remote working, which increased power usage in the residential sector. The requirement for a consistent power supply has given a massive surge to the adoption of diesel gensets in the end-user category. It is anticipated to continue growing with increasing power reliance in homes and residential complexes.
Rapidly growing infrastructure development spending primarily across the emerging economies is set to propel the construction segment growth. Marine diesel generator market trends are mostly contributed by expanding seaborne trades and the construction of new vessels. The oil & gas segment is projected to hold the lion's share amongst various industries during the forecast period owing to the encounter of further reserves, increasing E&P activities, mounting power demand, and huge investment potential. Industries such as railways, data centers, and agricultures are increasingly installing these units to continue their operations.
Asia Pacific Diesel Generator Market Size, 2021 (USD Billion)
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The market has been analyzed across five key regions, including Asia Pacific, Europe, North America, Latin America, and the Middle East & Africa. Asia Pacific is projected to hold the dominating share during the forecast period. Rapid industrialization, population shift to urban areas, huge infrastructure development targets, and construction of new facilities are major factors driving the regional expansion.
In the Middle East & Africa, the diesel genset industry is likely to witness considerable growth due to the availability of huge natural resources and the requirement of low capital cost to explore bulk reserves. Additionally, growing spending to revolutionize residential, commercial, and industrial infrastructures with rising manufacturing capabilities will contribute to the market's growth in this region.
Favorable government policies to maintain energy security and mounting manufacturing capabilities are likely to favor the North American diesel genset market. Furthermore, long-standing DG set manufacturers and significantly increasing investments across different end-user sectors such as oil & gas, mining, construction, pharmaceuticals, and many more are set to further complement the regional outlook.
Europe and Latin America are likely to witness a steady growth owing to increasing consistent power requirements due to massive industrialization in the regions.
Atlas Copco is Concentrating to Strategically Diversify its Offerings along with Performing Inorganic Expansions to Fortify its Presence
The diesel generator market is highly fragmented and has observed numerous global, regional, and country players. Key players adopt substantial measures such as partnerships with other companies to extend their product reach and geographical presence to shape the competitive landscape.
Atlas Copco AB is one of the market leaders continuously focusing on undertaking various organic and inorganic expansions to support its operational foothold in different regions. For example, in May 2020, the company proclaimed its plan to partner with Saudi Arabia-based Energia MTC to deliver its QAS range of diesel gensets. Atlas Copco also aims at utilizing Energia’s presence across the Middle East & North Africa (MENA) territory to market its portable QAS product line.
The global diesel generator market research report gives a comprehensive assessment by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches are adopted to make meaningful assumptions and views. Furthermore, the research report offers a detailed analysis and information as per market segments, helping our readers to get a comprehensive overview of the global industry.
By Power Rating
By End User
Fortune Business Insights says that the global industry size was USD 16.89 billion in 2021 and is projected to reach USD 26.09 billion by 2029.
In 2021, the Asia Pacific market value stood at USD 5.51 billion.
Registering a CAGR of 5.5%, the market will exhibit steady growth over the forecast period (2022-2029).
The above 750 kVA segment is anticipated to hold a significant share across the power rating division and dominate this market during the forecast period.
Increasing construction expenditures due to developing industrial infrastructures is the key factor driving the growth of the market.
Cummins Inc., Caterpillar Inc., Generac Power Systems, and Atlas Copco, among others,are the key participants operating across the industry.
The Asia Pacific dominated the market in terms of share in 2021.
Growing exploration of new mineral reserves coupled with increasing investments in prevailing assets is set to propel the adoption of these products across mining operations.