Diesel Generator Market Size, Share & COVID-19 Impact Analysis, By Power Rating (Below 75 kVA, 75-375 kVA, 375-750 kVA, and Above 750 kVA), By Portability (Stationary and Portable), By Application (Continuous Load, Peak Load, and Stand By Load), By End User (Mining, Oil & Gas, Construction, Residential, Marine, Manufacturing, Pharmaceuticals, Commercial, Telecom, and Others), and Regional Forecast, 2020-2027

The global diesel generator market size was USD 12.98 billion in 2019 and is anticipated to reach USD 16.85 billion by 2027, exhibiting a CAGR of 5.5% during the forecast period.

The diesel generator (DG) technology is a long-standing method that is used to produce energy by utilizing fossil fuel to serve emergency power needs. The product is widely used to deliver electric energy by converting chemical energy using various equipment such as AC alternator, control panel, fuel tank, radiator, engine, and many more. DG sets are commonly installed to power hospitals, homes, schools, factories, construction sites, among other verticals, either as the primary or as a backup power source in case of grid failures.

Shut Downs in Industrial Operations During the COVID-19 Weakens Potential for Diesel Generator Installations

The ongoing coronavirus pandemic has compelled governments to implement nation-wide or state-wide lockdowns to contain the viral infection. Consequently, this market is set to observe a decreasing revenue share in 2020 owing to the aftermath of this global crisis. The obstruction in the commencement of new end-user projects owing to the unattainability of required capital has significantly narrowed the integration of new systems. The disruption of daily business along with disturbances in heavy-duty processes such as construction activities, mining of new assets, hydrocarbon exploration & production, fabrication of new commercial substructures, and others have led to an unprecedented decrease in product demand.

LATEST TRENDS

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 Increasing Efforts to Combat Problems Caused by Power Outages to Propel Market Growth

Various operations by public and private entities are significantly disturbed by failures in transmission & distribution networks due to various factors such as cable faults, climatic problems, and grid system malfunctions. Several authorities such as the U.S. Department of Energy (DoE) and the European Union (EU) are increasingly adopting measures to integrate a standby source to provide the continuous power supply.

In August 2020, over two million residents across New Jersey, New York, and Connecticut suffered a blackout after being affected by the Isaias tropical storm. Furthermore, the power outage obstructions lasted for over half a week, leaving household and commercial chores in jeopardy among masses. These situations significantly generate awareness among the customers to adopt a reliable backup power source.

New Product Advancements By Key Players to Effectively Withstand Challenging Atmospheres to Add to Industry Pace

Several companies in the diesel generator industry are focused on expanding their application horizons across DG offerings. Besides, the companies are also concentrating on launching new products with different power ratings to operate effectively in harsh conditions. For instance, In July 2017, Aggreko unveiled the first-of-its-kind rental diesel generator sets with a power rating of 750 kVA with the ability to function in hazardous environments.

DRIVING FACTORS

 Significant Expansions in Oil & Gas Sector will Propel Technology Demand

The consumption of oil and gas has increased tremendously, owing to its wide applications across diverse industry verticals. Additionally, growing discoveries of new large hydrocarbon reserves along with the exploitation of offshore wells are set to cater to the demand for diesel generators. For example, in December 2019, an oil & gas major, ExxonMobil, announced release of a new hydrocarbon reservoir across the Liza field located offshore Guyana. The new asset is estimated to add over six billion barrels of oil equivalent to the block’s total recoverable resources.

Rapidly Developing Industrial Infrastructure Along With Increasing Energy Demand to Complement Industry Landscape

The increasing need to address rising production activities across the world is set to boost the market. Furthermore, increasing expenditures and investments to deliver efficient energy management across different sectors is set to unveil new growth opportunities for the industry. For instance, In May 2020, the United States Energy Information Administration (EIA) stated that the total national energy consumption equaled 100.2 quadrillion British thermal units (Btu) in 2019, with about 35% accounted from the industrial sector whereas the residential and commercial divisions constituted for 16% and 12% respectively.

RESTRAINING FACTORS

 Stern Emission Regulations Coupled With Growing Integration of Clean Energy Alternatives May Hinder Market Growth

Leading governing organizations across several countries have introduced different policies and targets to promote the adoption of green technologies to weaken the dependency on fossil fuels. Several countries are bound to adhere to vast objectives and introduce carbon-free power sources such as solar, hydro, and wind that may obstruct this market. Furthermore, the introduction of stringent regulations to curb discharges of damaging substances also positions a shortcoming to product adoption.

SEGMENTATION

By Power Rating Analysis

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Above 750 kVA Segment to Hold Considerable Share in 2019 owing to Continuous High Power Operations

On the basis of power rating, the global market is segmented into below 75 kVA, 75-375 kVA, 375-750 kVA, and above 750 kVA. Increasing demand for heavy-duty applications across different industries such as oil & gas, mining, manufacturing, construction, and many more 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.

By Portability Analysis

Portable Units are Poised to Grow at a Considerable CAGR During Forecast Timeframe

Based on portability, the industry is bifurcated into portable and stationary. The portable segment is projected to observe significant growth from 2020 to 2027, owing to increasing government initiatives to deliver efficient power generation alternatives in remote areas. The portable devices also require much less maintenance and deliver longer runtime to increase operational efficiency. Besides, stationary systems are also likely to observe substantial diesel generator market share owing to growing needs to serve high power requirements over longer periods.

By Application Analysis

Growing Need for Uninterrupted Power Supply Will Aid Market Growth

On the basis of application, this market include the continuous load, peak load, and standby load segments. Increasing demand for reliable power in isolated places to cope up 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 along with the setup of high power industrial units with variable load operations. Additionally, the growth of stand by load division is backed by growing energy security concerns across different end-users.

By End User Analysis

Increasing Construction Expenditures to Develop New Substructures is set to Augment the Industry Size

Based on end-user, the DG Set market is segmented into mining, oil & gas, construction, residential, marine, manufacturing, pharmaceuticals, commercial, telecom, and others. Rapidly growing infrastructure development spending primarily across the emerging economies is set to propel the construction segment growth. Marine diesel genset market growth is mostly contributed by expanding seaborne trades along with the construction of new vessels.

The oil & gas segment is projected to hold the largest revenue share during the forecast period owing to the encounter of new reserves, increasing E&P activities, mounting energy demand, and huge investment potential. Industries such as railways, data centers, and agriculture are increasingly installing these units to continue their daily business activities.

REGIONAL INSIGHTS

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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 expected to account for the largest portion during the forecast period. Rapid industrialization, population shift to urban areas, huge infrastructure development targets, and construction of new facilities are some of the major factors driving the regional expansion.

Favorable government policies to maintain energy security coupled with mounting manufacturing capabilities are likely to favor the North America diesel generator market. Furthermore, the presence of long-standing diesel generator system manufacturers along with significantly increasing investments across different end-user sectors such as oil & gas, mining, construction, pharmaceuticals, and many more are set to complement the regional outlook further.

In the Middle East & Africa, the diesel generator industry is likely to witness considerable growth owing to the availability of huge natural resources along with 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 growth of the market in this region.

KEY INDUSTRY PLAYERS

 Atlas Copco is Concentrating to Strategically Diversify its Offerings along with Performing Inorganic Expansions to Fortify its Presence

The market is highly fragmented and has observed numerous players operating at global, regional, and country levels. Different participants are adopting substantial measures such as partnerships with other companies to extend their product reach and geographical presence to shape the competitive landscape. Major players operating across the industry are Cummins Inc., Aggreko, Atlas Copco, Kirloskar Electric, among many others such as Mitsubishi Heavy Industries and Himoinsa.

Atlas Copco AB is 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 generators. Atlas Copco also aims at utilizing Energia’s presence across the Middle East & North Africa (MENA) territory to market its portable QAS product line.

LIST OF KEY COMPANIES PROFILED:

• Caterpillar Inc. (U.S.)


• Aggreko (U.K.)


• Cummins Inc. (U.S.)


• Himoinsa (Spain)


• John Deere (U.S.)


• Kohler-SDMO (France)


• Wartsila  (Finland)


• Kirloskar Electric Co. Ltd. (India)


• Generac Power Systems (U.S.)


• FG Wilson (U.K.)


• Atlas Copco (Sweden)


• American Honda Motor Company, Inc. (U.S.)


• Briggs & Straton (U.S.)


• Inmesol S.L.U. (Spain)


• HiPower Systems (U.S.)

KEY INDUSTRY DEVELOPMENTS:

•  October 2019 – The Government of Yukon, a province in Northwest Canada, announced to spend about USD 2.2 million to procure diesel generators. The Minister of Energy, Mines, and Resources further said the purchase was scheduled in place of the canceled thermal power plant and is aimed to rent nine diesel-powered units for emergency power backup.


•  February 2018 – Generac Holdings launched the new XC and XD models of mobile diesel-fuelled generators fabricated majorly for commercial and rental uses. The introduced XC line of products is designed to deliver 6.5, and 8 kW rated gensets for integration into different outdoor purposes such as landscape contractors.

REPORT COVERAGE

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The diesel generator market report presents a comprehensive assessment of the global market 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 report offers a detailed analysis and information as per market segments, helping our readers to get a comprehensive overview of the global industry. 

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