The global natural gas generator market was valued at USD 7.09 billion in 2021 and is projected to reach USD 18.47 billion by 2030 at a CAGR of 11.23% from 2022 to 2030. A natural gas generator is a particular kind of generator that runs on natural gas rather than gasoline or diesel. It ignites fuel gas to create natural gas and other high-calorie gases. Compared to conventional fossil-fuel generators, these ones are more affordable, function more efficiently, and are less harmful to the environment. These generators might not be the best choice for all applications, though, as they are less adaptable than other generator types.
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The economic growth of numerous Asian Pacific nations has been significantly influenced by the manufacturing sector. Many Asian governments have also signed extra-regional trade agreements in an effort to position themselves as major industrial hubs. The ASEAN Economic Community (AEC) believes that if the Regional Comprehensive Economic Partnership (RCEP) is carried out well, it will be a positive step toward a larger Asia Pacific Free Trade Area (FTAAP).
It can work as a suitable intergovernmental free trade platform, encouraging the growth of various industries and assisting in the expansion of the region's manufacturing sector. The expanding manufacturing sector has fueled demand for power generation systems and generators like those made by Caterpillar, which uses natural gas.
Natural gas, which burns more cleanly than other traditional fuels, is crucial in lowering greenhouse gas emissions. Strong policies fostering sustainable development have led to a surge in natural gas output in recent years. The United States is the top producer and net exporter of natural gas in the world as a result of the shale gas revolution. In addition, China is consistently expanding its capital expenditures on sustainable energy sources to cut carbon emissions. Many European nations are also turning conventional coal-fired power facilities into gas-fired generators to support clean energy initiatives. Following this pattern, it is anticipated that sales of natural gas-powered generators will increase profitably over the forecast period.
Battery storage enhances the grid balance and raises the quality of the electricity regardless of the power source. Systems for gas turbine generator sets are being developed in several countries. The balance of energy sources used to produce electricity is projected to change over the next ten years as distributed generation and storage, grid-scale energy storage, utility-scale solar, and wind energy all experience considerable increases.
The demand for and prices of renewable energy technologies are rising as a result of the fast reducing installation costs of solar panels brought on by recent technological advancements and the shift of many nations toward the generation of green energy.
Energy is necessary for economic growth worldwide. However, the increased use of fossil fuels has brought about major environmental risks, such as deforestation, rising sea levels, and global warming. By putting in place, sustainable energy development programs, international regulatory and governmental bodies have taken the lead in lowering the severity of pollution. By making investments in environmentally friendly and renewable energy sources, the initiative hopes to advance the state of the world economy. As a result, favorable government regulations and increased public awareness of global warming are anticipated to provide a lucrative market for natural gas generators and propel market expansion over the forecast period, respectively.
This market can be segmented on the basis of power rating, application, region and competitors. The market for low-power gensets was worth $3.10 billion in 2021. Low power gen-sets are popular for backup power applications in homes and businesses. Geysers, water pumps, air conditioners, water purifiers, and other electrical equipment are often used in homes nowadays. Similar to how washing machines, which may use 750 watts but require roughly 2500 watts to start, require more power to operate, these appliances need more power to operate. As a result, a lot of houses decide to merely have an 80 KW generator set as a backup power supply.
During the projection period, the medium power Genset segment, which had the second-largest market share in 2021, is expected to grow at the greatest CAGR. The growing demand for medium power gen-sets from emerging nations like China, India, and Brazil for backup power systems that use clean fuel for commercial and industrial applications is a major driver for the technology. Large machinery and heavy machinery can be powered by generators with a rating of 350 KW or higher.
The market is divided into residential, commercial, and industrial categories based on the use of natural gas gensets. The commercial sector is anticipated to have the largest global market for natural gas generators, with a projected value of USD 3,224.7 million in 2021. Due to the rising demand for cleaner and more environmentally friendly fuel-fired generator sets for commercial applications, the commercial category is anticipated to develop at the highest CAGR of 12.0% during the forecast period.
The commercial sectors of Asia Pacific's developing nations have experienced rapid expansion. There is a significant demand for natural gas gen-sets since they are essential for providing backup power in these facilities. Some of the primary sectors that are expanding quickly in developing countries in the Asia Pacific are IT, telecom, and retail.
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The market in North America, where the United States was the main contributor to the natural gas generator market in the region, was estimated at USD 2,181.8 million in 2021. Large shale gas deposits, developed infrastructure for natural gas transportation, and the existence of well-known gas generator OEMs and EPC players, and these factors have emerged as the main growth drivers for the North American natural gas generator set market. Due to a number of factors, including the existence of shale gas reserves and the growing government emphasis on the development of clean energy sources, the U.S. accounted for the largest share in 2021 and is anticipated to advance at the fastest growth rate in North America during the forecast period.
Asia Pacific is anticipated to develop at the quickest rate during the projected period, with a CAGR of 14.0%. The demand for effective backup power systems is what drives the Asia Pacific market. Industrial generator sets are in great demand in the region because of the rapid growth of the industrial sectors in China, India, Japan, and South Korea.
Furthermore, government initiatives in India are supporting the development of industrial facilities, which is predicted to fuel a rise in the demand for gas generator sets for industrial uses throughout the course of the forecast period. Diesel is a preferred raw source for the generator set sector in India. The demand for natural gas gen-sets is anticipated to increase during the forecast period. However, due to government regulations to reduce carbon emissions brought on by the burning of diesel fuel, as well as a shift in the government's priorities toward the use of cleaner sources for power generation.
Important players in the sector are implementing a range of organic and inorganic growth strategies to diversify their service offerings and increase market share. Caterpillar Inc., Cummins Inc., Generac Power System, Mitsubishi Heavy Industries, Ltd., Kohler Co., Inc., General Electric, MTU-onsite Energy GMBH, Mahindra Powerol, Yanmar Co., Ltd., and Coopercorp Generators are a few well-known companies in the market for natural gas generators.