Why Need for Gensets Continues to Strengthen in Developing Nations?

With the growth of industries, generators are playing an increasingly bigger role in powering economies around the world. Modern life is unimaginable without electricity, which, sadly, isn’t available to everyone. Even though more than 90% of the global population is connected to the grid, the supply is far from being reliable, because of numerous issues, such as the outdated transmission infrastructure, illegal energy siphoning, and natural and man-made calamities.

Therefore, the sales of gensets around the world will reach $27,863.0 million by 2030 from $17,592.6 million in 2019, with a 5.8% CAGR in the coming years. This will mainly be because these devices remain in high demand in the commercial, residential, and industrial sectors to produce electricity in the event of a power outage or in places that have no grid connectivity, such as remote mining, construction, oil & gas, and military sites.

Diesel Gensets the First Choice

Just like modern economies are driven by generators (to some extent), most generators are themselves driven by diesel. This is mainly credited to the wider availability of diesel compared to natural gas and gasoline (petrol). Despite the lower costs of low-power gas gensets than diesel variants, the deprived supply of natural gas makes the former the first choice. This is why the global push for sustainability and the stringent emission standards implemented around the world have not dampened the popularity of DG sets.

APAC Biggest Buyer of Generators

APAC has experienced an economic boom of late because of the growing manufacturing sector, mainly due to initiatives such as Make in India and Made in China 2025. Further, the heavy investments being initiated to develop infrastructure and increasing requirement for power from residential units are making generators essential. Essentially, because of its underdeveloped power infrastructure, the region widely uses backup and auxiliary sources of power.

For instance, the diesel genset market of India is likely to reach $1,831.2 million by 2030. There is a high demand for high-power and medium-power diesel gensets from the industrial sector, especially since the government has now permitted 100% FDI. Similarly, more than 80,000 house sales were recorded in the country in 2020, which has propelled the demand for backup electricity at residential units.

Genset Demand in Africa

Africa experiences a lot of power outages, and the electricity price is considerably high, which drives the requirement for gensets. Diesel is the fuel of choice, but in some parts, there is an increasing inclination toward the gas-fueled ones. Key markets in the country for generators are South Africa, the U.A.E., Iran, Zambia, Nigeria, Ghana, Qatar, Kuwait, and Madagascar.

The demand for this equipment in the commercial sector has been the most-significant till now in the region. The booming construction, especially of data centers, hotels, hospitals, and retail spaces, is the biggest reason behind it.

The region has shown a high inclination toward diesel gensets that offer power in the range of 15 to 75 kVA. These variants are fit for residential societies, telecom towers, retail outlets, and small commercial offices, where the requirement for power isn’t as high due to the absence of heavy machinery.

Gensets Sales in U.S.

One of the economic and industrial powerhouses of the world, the U.S. is among the largest users of generators of all kinds. Here, residential applications will likely register the fastest growth in the demand for these systems, because of the thriving residential construction industry. As per the U.S. Census Bureau, the value of the residential construction done in the country rose from $754,139 million in March 2021 to $891,280 million in March 2022.

Diesel gensets of 150–199kVA power rating are the highest selling, as they are widely used in residential societies and commercial areas. The country is home to the largest retail industry, with multiple stores of global giants such as Macy’s, Wal-Mart, and Bloomingdale’s, apart from multi-brand stores and shopping malls.

This is also why stationary gensets witness a higher demand than portable ones. Most large retail and residential facilities need the permanent stationing of gensets, so a power outage can be dealt with immediately. Moreover, the requirement for energy at these facilities is quite high, which small, portable generation systems are unable to meet.

Moreover, there is an increase in the number of data centers in the U.S., where an uninterrupted power supply is a prerequisite. Hence, with major IT giants, such as Google, Microsoft, Apple, and Facebook, setting up data management facilities, generator firms are offering equipment tailored to the requirement of data centers.

Genset Sales in Middle East

* Kuwait

The sale of generators in Kuwait is rising because of the high demand for them from the oil & gas industry. It is a petroleum-based economy, with 90% of the revenue coming from the oil trade. Remote oil & gas E&P sites are critical facilities, which is why they require a non-stop power supply.

Additionally, the easy availability of fossil fuels makes generators easily accessible and their operations financially feasible. This is because of the lower price of diesel in the country than most non-OPEC members.

*Qatar

Just like Kuwait, the construction sector of Qatar is growing rapidly because of the snowballing government spending on the development of infrastructure. This is driving generator sales, as most construction sites lack grid connectivity, but have an array of power tools in use.

Further, Qatar will host the 2022 FIFA World Cup, for which football (soccer) stadia are being renovated and expanded and a range of other facilities, such as hotels, transportation hubs, and shopping malls are being built.

Hence, the rampant construction activities and growing industrial sector are propelling the need for electricity, which, despite, considerable improvements in the generation and transmission infrastructure, is still unreliable or not available to many. Therefore, generators are being widely bought and rented by industrial, residential, and commercial entities and even individual users around the world.