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The global generator sales market size was USD 20.31 billion in 2019 and is anticipated to reach USD 27.16 billion by 2027, exhibiting a CAGR of 5.7% during the forecast period.
Generators are machines used to convert mechanical energy to provide an optimum amount of electrical power for various uses. They are widely used to suffice additional, constant, and emergency power requirements from different establishments. A generator unit contains various components such as engine, fuel system, alternator, main assembly, cooling & exhaust system, and others to effectively create and manage current.
Unexpected Industrial Shutdowns to Hinder Deployment of Generators for End-Use Industries
The sudden outbreak of the novel coronavirus has significantly impaired industrial operations across the globe. The number of affected cases has witnessed a constant rise pushing different nations to adopt numerous combat measures such as national lockdowns and social distancing. Consequently, the market has been substantially affected by the shutdown of industrial operations due to this global pandemic.
The growing hesitations in investment for new projects, limitations in cross-border trade, shortfalls in required capitals, preventive government measures reducing the workforce, and many other factors have adversely impacted the industry growth. For instance, in May 2020, the International Energy Agency (IEA) stated that the global investment in the oil & gas industry is projected to fall by about 33% in 2020 as compared to the preceding year due to the weakened demand caused by the COVID-19 pandemic.
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Growing Rural Electrification Programs to Boost Market
A significant population across the globe still resides in distant and rural locations with limited access to the main grids for the majority of people. For instance, in July 2020, the World Bank reported that electricity was accessible only to around 89.6% of the global inhabitants until 2018. The organization further confirmed that around 97.23% of the urban population have access to electricity compared to just 82.04% of residents across rural locations. Different national and regional administrations have significantly rolled out their initiatives such as Integrated National Electrification Programme in South Africa, and the Deendayal Upadhyaya Gram Jyoti Yojana in India. These schemes aim to deliver a steady source of power to the households to promote living standards and expand the potential development areas.
Growing Concerns to Mitigate Operational Risks Due to Power Outages to Favor Growth
Various natural calamities or machine errors leave residential, commercial, and industrial operations vulnerable to efficiently perform daily tasks owing to a power outage. For instance, in June 2019, around 48 million Latin Americans faced a blackout when an electricity grid failed in Argentina. The unprecedented power loss was observed over various nations such as Uruguay and Argentina, along with some sections of Chile, Paraguay, and Southern Brazil. Accordingly, different government and private establishments are widely adopting different measures to diminish such problems, and further endure such erratic conditions with an efficient backup source.
Rapid Industrialization & Growing Construction Expenditure to Augment Market Growth
The growing investments to develop new advanced industrial establishments, along with up-gradation of the prevailing setups, is likely to propel the growth of the generator sales market. Additionally, the increasing national construction spendings to build energy-efficient infrastructures is set to boost the demand for generators. For instance, in August 2020, the U.S. Census Bureau published that the expenditure on public buildings across the country totaled at about USD 353.3 billion in June 2020 from USD 332.8 billion compared to the corresponding period last year.
Rising Exploration & Production of Oil & Gas to Promote Growth
The power demand has abruptly increased across the developing as well as developed economies over the years. Furthermore, the growing investments to produce hydrocarbons from bulk conventional and unconventional reserves have favored the market at the global level. For example, in June 2020, the BP Statistical Review of World Energy 2020 stated that the total primary energy consumption equaled at 583.9 exajoules in 2019, rising from 576.23 exajoules in 2018 with a year-on-year increment of over 1.3%.
Rising Adoption of Green Energy Technologies May Hinder Market Growth
Stringent clean energy deployment targets provided by numerous regional administrations and organizations to curb the overall greenhouse gas emissions may hinder the market growth. Different nations are bound to abide by the stringent regulations to integrate low carbon generation technologies to lower carbon footprint. This may lead to weakening the potential for generator installation across the globe. Furthermore, the growing investments to transform the grid infrastructure and reinforce the transmission & distribution (T&D) lines may pose some problems for product adoption.
375-750 kVA Segment is Projected to Experience Significant Growth
Based on the power rating, the market can be broadly categorized into below 75 kVA, 75-375 kVA, 375-750 kVA, and above 750 kVA.
The rapidly developing residential and small commercial infrastructures in distant locations are likely to augment below 75 kVA gensets demand.
The growing setup of industrial operations in far-off locations that majorly requires continuous working hours is anticipated to lead to the 375-750 kVA segment growth.
The continual launch of new products with better fuel efficiency, coupled with high power output primarily for stationary applications, is set to propel the above 750 kVA segment outlook.
Diesel Generator to Hold Highest Position
On the basis of fuel type, the generator sales industry can be segmented into diesel, gas, and others.
The diesel segment is anticipated to account for the maximum portion across the globe due to its reliable operations, significantly high efficiency, lower maintenance costs, high load operations, and other factors.
The lower discharge of harmful gases such as nitrogen and sulfur, along with cost-convenient operations, is set to favor the growth of gas-based generator units.
Rising Measures to Equip a Reliable Emergency Power Source to Propel the Stand By Segment Demand
Based on application, this industry can be primarily divided into continuous, peak shaving, and stand-by.
The growing need to install sturdy backup power units to combat the situation of sudden blackouts or power cuts is set to foster the stand by segment outlook.
The continuous segment is projected to hold a significant share of the market owing to the growing setup of high power applications in distant places without grid connectivity.
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Rising Investments across Numerous Industrial Sectors Anticipated to Boost the End User Segment
On the basis of end-user, the market can be segregated into pharmaceuticals, manufacturing, construction, oil & gas, mining, marine, commercial, telecom, residential, and others.
The oil & gas sector is anticipated to hold the dominant position owing to the increasing investments to explore huge hydrocarbon reservoirs coupled with the discovery of new assets. The rising construction expenditure by various national governments to establish new and advanced buildings is likely to favor the growth of the construction segment.
The constant need for different metals and minerals to fabricate raw materials and end-use products for different industries is likely to propel the growth of the mining segment.
The expanding reach of communication lines requiring new stations to serve customers with high-speed networks is projected to boost the telecom segment landscape.
The manufacturing segment growth is favored by the constant high power need to efficiently run heavy machinery that will propel the demand for generators globally.
Asia Pacific Generator Sales Market Size, 2019 (USD Billion)
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The market has been assessed across five major regions, including North America, Asia Pacific, Latin America, Europe, and the Middle East & Africa.
Asia Pacific stood at USD 7.31 billion in 2019 and is anticipated to hold the largest global generator sales market share in terms of revenue owing to the existence of various economies in the transition phases. The regional expansion is backed by the rapidly developing infrastructure, paradigm shift towards industrialization & urbanization, and building of new structures, among others.
North America is set to experience significant growth during the forecast period due to the rising government and non-government investments to develop various industry verticals. Additionally, encouraging legislation to promote building energy security, along with the existence of established generator manufacturers, is expected to propel the market growth in the region.
The easy availability of bulk capacity oil & gas reserves, coupled with a significantly rich presence of different high-value metals & minerals, is likely to favor the Middle East & Africa. Furthermore, the territory is set to observe significant expansion owing to the exponentially increasing construction expenditures to build innovative domestic and public establishments to promote tourism across nations.
Rolls-Royce Enhancing its Collaboration with Other Players to Deliver High Power Products
The industry has observed a large number of product manufacturers delivering units with different power rating applications at the global and regional levels. The generator sales market has observed numerous small and large participants with well-established production lines to cater to specific end-user industry requirements. Furthermore, the companies are increasingly focusing to integrate with other players to strengthen their foothold and, thereby, outlining the competitive landscape.
For instance, in November 2018, Rolls Royce announced the delivery of eighteen units of its MTU generator sets to replace the prevailing diesel-fueled fleet in naval vessels owned by BAE Systems. The order is a part of their Power Improvement Project (PIP) and is aimed at fortifying the force of warships.
An Infographic Representation of Generator Sales Market
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The research report provides a detailed analysis of the market and focuses on key aspects such as strategies of the leading companies along with various segments consisting of power rating, application, end-user, and fuel type. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, several other factors that have contributed to the growth of the market over recent years have been covered by the study.
Value (USD Billion)
By Power Rating
By Fuel Type
By End User
Fortune Business Insights says that the global industry size was USD 20.31 billion in 2019 and is projected to reach USD 27.16 billion by 2027.
In 2019, Asia Pacific market stood at USD 7.31 billion.
Registering a CAGR of 5.7%, the market will exhibit steady growth during the forecast period (2020-2027).
The oil & gas end-user segment is projected to account for the major share in this market during the forecast period.
The growing seaborne trades, the increasing spending on infrastructure development, and the rising mining activities are some of the key aspects driving the market growth.
Rolls-Royce, Caterpillar Inc., Yanmar, Atlas Copco, and Cummins Inc., among others, are the key players operating across the industry.
Asia Pacific dominated the market in terms of share in 2019.
The increasing need for a reliable power source to maintain the operational continuity along with the discovery of new high capacity reservoirs is set to boost the installation of the products across oil & gas operations.
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