Generator Sets Market

Market Overview

The global generator sets market size was valued at USD 28.11 billion in 2021 and is predicted to reach at USD 57.28 billion by 2030, increasing at a CAGR of 8.23% from 2022 to 2030.

For the purpose of temporarily generating electricity, a generator utilises the rotating motion concept of a gas or fuel-powered equipment. Steam-turbines, gas-turbines, as well as internal combustion of fuel are the primary sources of mechanical energy. Industrial, agricultural, defence and daily life use are all examples of their vast application. There are a wide variety of generators, which are primarily split into AC and DC. The output of a generator can be varied in response to the demand for power. Additionally, they are commonly seen in less developed regions without access to reliable power sources. Because of the continuous fast industrialization and growth of the residential and commercial sectors, the global market for generator sets is predicted to increase. Increasing digitalization has resulted in an increase in the consumption of electricity by industry.

Global industrialization, particularly in emerging markets like China and India, is driving demand for generators. Increasingly, businesses and industries are turning to generators for their power needs because they ensure a constant flow of electricity, which is critical for manufacturing operations. In addition, the genset market is projected to be driven by factors like as adverse weather conditions, strict environmental regulations, and advances in infrastructure.

Market Dynamics

Market Drivers

Improvements In the IT Sector and A Growing Emphasis on Digitization

By 2020, the market for commercial generator set equipment had surpassed 9 billion USD. The expansion of the firm will be aided by technological advances in the information technology sector as well as rapid growth in the number of data centers. The outlook for the industry will improve as a result of a growing emphasis on digitalization as well as improved end-user awareness of the rise in the frequency of power outages. Because these units incorporate critical properties such as excellent durability, capacity, and a low volatility rate, they are the best option for varied mining operations.

Some of the underlying elements that underpin the industry statistics include an increasing demand for steady power supply across a variety of manufacturing industries, including automotive and pharmaceuticals manufacture. These businesses have turned to automatic gensets as a means of providing a standby electricity supply in the event that electrical breakdowns occur. As a result, they have been able to prevent significant monetary, reputational, and product losses.

Rising Demand Due to The Advancement in The Oil and Gas Industry

The majority of mining and oil and gas exploration takes place in isolated places. Because the highly flammable materials being mined pose a constant threat to workers' lives, adequate lighting and power are essential during such operations. The oil and mining industries in the United States, Australia, and several African countries are expanding significantly as a result of rising investments.

China, Australia, and other Asian countries are expected to establish new mining operations in the future years. Demand for power renting solutions will rise as a result of this. In addition, the United States has retained its status as one of the world's top oil producers since hydraulic fracturing occurred. Through the year 2025, Exxon Mobil intends to invest $50 billion in expanding its integrated operations in the United States. This involves the drilling of oil & gas wells as well as the construction of pipelines to transport its output to the Gulf Coast, where it is expanding its downstream footprint. Rental generator sets are projected to benefit from this trend in the near future.

Market Restraints

One Of the Most Difficult Issues Is Implementation of The Green Energy Policies

In the global generator set market, clean energy initiatives pose a serious threat to the industry. Environmental contamination has become a major concern for a number of countries throughout the world. For the first time in 2019, a global climate emergency was declared in Scotland. A climate emergency was declared in New Zealand, the Maldives, Japan, Andorra, as well as South Korea in 2020. Strict rules will operate as a deterrent for some companies and may even prevent new market entrants from entering the market.

Several countries' top government agencies have implemented policies and goals to encourage the use of green technologies and reduce reliance on fossil fuels. Solar, hydro, as well as wind power are all on the rise as countries strive to reduce carbon emissions, which might put a damper on generator sales.

Market Opportunities

Innovating Will Increase Sales by Opening Up New Opportunities for Growth

There is a healthy competition in the generator business because of the expanding use of the product in a wide variety of industries. Consequently, businesses are striving to include cutting-edge concepts in order to develop a strong presence for their brand. Inmesol unveiled a new line of silent generators in October of last year. A working sound pressure level of roughly 50 dB has been established by the manufacturer for these rental goods (A).

An 85- to 130-kVA power rating is planned for the company's newest silent generator line. The generator industry is expected to increase in the next years because to an increasing number of product breakthroughs like these around the world. This will open up a variety of new growth opportunities in the global generator sets market.

Regional Analysis

The global generator sets market is segmented by geography into North America, Europe, Asia-Pacific (APAC Region), Latin America, and Middle East & Africa.

The market in Asia Pacific held the greatest revenue share of almost 37% in 2021 and is predicted to have the highest significant growth during the forecast period. This is due to the fact that the region is home to the most rapidly developing economies. The highest proportion of the region's total revenue is being brought in by China. It is anticipated that factors such as an increase in the number of construction projects as well as production facilities in the country, as well as a development of commercial office space, will drive the market throughout the area.

In 2021, North America had the second biggest market share, at 25 percent, and it is anticipated to rise at a considerable compound annual growth rate (CAGR) over the forecast period. The United States is expected to be the major factor contributing to the growth of the area. The burgeoning infrastructure of data centres and other commercial services has led to a strengthening market for reliable energy backup solutions, which has in turn driven the demand for generator sets throughout the region. Additionally, the growing insecurity of the electric grid to outages caused by weather has led to an increase in the demand for reliable energy backup solutions.

Existence of a significant generator It is anticipated that EPC as well as OEMs businesses, large shale gas fields, favourable government initiatives on constructing clean energy fuels, as well as robust infrastructural facilities for natural-gas transport systems will drive the market for generator sets especially in comparison with diesel generators, throughout the U.S. market. This demand is expected to be higher than the demand for diesel generator sets.

Segmental Analysis

The global generator sets market is divided into different segments according to the Fuel Type, Power Rating, Application, and Region.

By Fuel Type, the global generator sets market is segmented into Diesel and Gas. Because of its superior fuel economy and lower operating costs, the diesel segment commanded the lion's share of the market in 2021, making up more than 70 percent of the total. There are a number of essential reasons that contribute to the continued competitiveness of diesel generators across the industry. These factors include a longer engine lifetime, high efficiency, high flexibility, and better scalability.

Over the course of the forecast period, it is anticipated that the gas category will have significant market expansion, with a compound annual growth rate of 8.88 percent. The expansion is a result of stricter rules on emission control, as well as growing worries over energy security as well as the combustion of fossil fuels. These factors contributed to the increase. For instance, in comparison to oil and coal, natural gas produces a significantly smaller amount of emissions of carbon-dioxide, nitrogen, as well as Sulphur. In addition, the expanding availability of natural gas, which is supported by the boom in the shale gas industry, will drive the expansion of the market.

By Power Rating, the global generator sets market is segmented into Low Power Generator, Medium Power Generator, and High-Power Generator. In terms of revenue, the low-power-generator category accounted for more than 45 percent of the market in 2021. The majority of low power generators are used in home and commercial settings. Generator sets with a capacity of less than 80 kW are used in residences to power electronics including Air conditioners, geysers, water purifiers, as well as water pumps. In addition, the low cost of tiny generator sets is predicted to increase generator set demand in the future years.

The CAGR for medium power generators is expected to be the fastest in the forecast period, with a 2021 revenue share of 42%. In the next seven years, rising demand for medium-power generator sets for clean energy source in emergency backup battery systems for commercial and industrial applications is predicted to push the market growth from growing economies like Brazil, China, and India.

As a primary power source for off grid areas and also as an emergency generator in grid-connected locations, medium power generators have a significant market share. A large majority of high-power generators are used in industries including manufacturing, shipping, and the electric power industry, all of which demand a constant supply of electricity. Because the direct supply of power is not possible in some rural areas, high-power-generator sets are built to generate and distribute power throughout the remote area.

By Application, the global generator sets market is segmented into Residential, Commercial, and Industrial. In 2021, the commercial sector held for about 45 percent of total revenue, and this segment is expected to rise at a high rate over the projection time period. Healthcare, aquaculture, agriculture, government facilities and data centers are just few of the industries that make up the company's dominance in this market. Emergency power disruptions, such as power outages or voltage fluctuations, can cause financial losses if they aren't handled by generator sets in commercial facilities.

2021's generator sets market was dominated by the industrial category, accounting for the second-largest sales share. It covers the oil & gas sector, transportation and logistics, mining, electricity, manufacturing, as well as construction. China, Brazil, and India's favorable government initiatives for industrial expansion are fueling market for generator sets throughout the category.

The residential segment has a smaller market share than the other application segments. An increasing incidence of power outages, increased customer awareness, and an increase in primary grid load demand are all contributing to an increase in the demand for generators in the residential sector. In the event of a power outage or grid breakdown, generator sets provide a stable backup source of energy for houses.

By Region or Geography, the global generator sets market is segmented into North America, Europe, Asia-Pacific (APAC Region), Latin America, and Middle East & Africa. In 2021, the Asia Pacific region is projected to hold the biggest income share of over 37% and to see the highest growth rate. North America is expected to develop at a considerable CAGR throughout the forecast timeframe, with the United States being the biggest contributor to region's growth.

Recent Developments

• July 2022 - Taiwan's state-owned Taiwan-Power-Company (TPC) had awarded Mitsubishi-Power, an electricity services brand of Mitsubishi-Heavy-Industries, Ltd. (MHI), a series of contracts for a large-scale refurbishment project at the Datan-Power-Plant in Taoyuan, on the periphery of Taipei.
• June 2022 - After signing an MoU with Siemens-Gamesa-Renewable-Energy (SGRE), the largest builder of offshore-wind-turbines, Doosan Enerbility stated on June 26th that it and SGRE were working together on a joint strategy for developing Korea's off-shore-wind power sector.