Right from automotive and mining to construction and steel sector, global diesel generator market leveraging the necessity of uninterrupted power supply; bio-diesel adding an ecological front to gensets

‘Uninterrupted power supply’ is a necessity for a magnitude of verticals ranging from commercial and residential infrastructure to manufacturing plants and data centers. A downtime in power supply leads towards discontinuity in operations and can augment the adverse economic effects. For instance, in data centers, an interrupted supply in power can lead to a catastrophe in the modern era of the internet connectivity and telecommunication that is completely reliant on such centers constituting the imperative servers. Similarly, a power cut in the manufacturing sector uplifts the odds of a delay in production sites, serving as a loss of time and employed manpower. As a consequence, diesel generators are gaining rampant scope of application as a standby source of power in various end-user verticals where power interruption can lead towards unreversed losses, such as data centers, manufacturing sites, mining areas, healthcare facilities, and civil infrastructures. Diesel Generator Market size is witnessing substantial expansion owing to its transition from as a stand-by power module in developed economies to a principal source of power for microgrids in remote and rural areas of developing economies devoid of access to electricity. According to the International Energy Agency, an estimated 14% of the global population had no access to electricity in 2017, with 95% of such population residing in sub-Saharan Africa and developing Asia. Another pivotal factor assisting the global diesel generator market size to carve a niche for itself is the cost-effective and energy-efficient traits offered by diesel as a fuel. The global diesel generator market size is evaluated to be $16 billion as of 2018. Moreover, with rampant developments in the spectrum of data centers, demand in the market is estimated to be progressing at a CAGR of 4% during the forecast period of 2019-2025.

Rampant Development of Data Center Infrastructure to Cater Global Diesel Generator Demand:

Analyzing the growth prospects in various diesel generator market end-user verticals, data centers are reckoned to be the fastest-growing vertical progressing with an application CAGR of 5.77% going through to 2025. The 21st century is witnessing a data revolution. An array of flourishing sectors such as telecommunication, automotive, manufacturing, healthcare, retail, and banking, financial services, and insurance (BFSI) are generating colossal data at a rapid pace. This radical growth of data in volumes has catalyzed the development of data centers throughout the globe that is an avid employer of diesel generators as a backup source of power. Data centers facilities in this modern era of cloud computing cannot afford a power downtime leading to colossal losses for various end-users of it. As a consequence, it is leveraging the economic front of diesel in the form of diesel generators, adding impetus to the market demand. The World Economic Forum report on daily data generation suggested that 2.5 quintillion bytes of data is produced daily, and 90% of this data has been produced in the last two years. With such humongous production of data in recent years, both the developing and developed economies have witnessed tremendous construction of data centers, supplementing the global diesel generator market demand. For instance, in 2018, Microsoft, with its endeavors of expanding the Quincy, Washington, data center campus, filed for permits to add 72 diesel generators. Hence, such inclination towards diesel generators, by elite labels in the data centers forum, depicts its affluence as a prominent end-user vertical in global diesel generator market share.

Manufacture and Mining – Supplementing the Supremacy of APAC in Global Diesel Generator Market Size:

After a critical study of the diesel generator regional markets, APAC is reckoned to be the most lucrative marketplace with a share of 37.26 % in global demand as of 2018. The dominance of APAC is attributable to the impeccable manufacturing hubs of India and China that require an uninterrupted source of power to cater the global demands. Right from automotive and steel to mining and textile, China is the leading producer globally. Similarly, India, one of the fastest-growing economy, is witnessing extensive growth in its construction and power generation sector. Indian government-induced initiatives such as The Smart Cities Mission, Make in India campaign, and Housing for All 2022, is augmenting the expansion of power utilities and growth of manufacturing and public infrastructure verticals in the country. As operations in all of these verticals rely on prime sets of power as well a local source at remote sites along with backup source to avoid downtime, diesel generator market in APAC is poised to grow. In this era of ‘factory automation,’ all the apparatuses installed at a production site necessitate uninterrupted power supply that is attainable via diesel generators.

Some factors in support of the argument-

According to the 2019 report by International Organizing Committee for the World Mining Congress, Asia accounted for more than half, 57.9% of the global mining production in 2017. Whereas China led the charts as the apex mining nation with a substantial 23.5% of the global production, India secured the 5th spot in mineral production for the same year. The employment of diesel generators is undeniably vital to the mining business. In remote mining sites, diesel generators are a source of power for mining camp and provide ongoing power for essential items. The massive drills and shovels, as well as excavating machinery, all run on diesel generators in remote sites. Moreover, in cases of availability of main utility grid at sites, diesel generators due economic cost price of diesel and its less volatile nature are still preferred over extremely explosive and extensive Co2 emitting natural gas and gasoline generators as a standby source of power. Another factor assisting the implementation of diesel generators in remote mining area is that natural gas need not be stored and is supplied through gas pipelines only. Installing pipeline near mining areas constituting extremely volatile natural gas is an expensive as well as a hazardous process.

APAC is one of the leading regions globally in terms of manufacturing various commodities such as automotive, steel, textiles, and cement. Such an impeccable industrial output demands an uninterrupted supply of power, and APAC’s diesel generator market is rightfully leveraging this demand. In the modern manufacturing arena, the manual workforce is sidelined by the process of ‘factory automation,’ and hence a local and standby source to power the automated solutions is utmost necessary. An analysis of the manufacturing sector’s growth-

· As per the World Steel Association, out of the 1,808.6 million tonnes (Mt) recorded as global crude steel production, Asia accounted for 1,271.1 Mt of crude steel in 2018. Production of crude steel in China alone was evaluated to reach 928.3 Mt. that was 51.3% of the global share. Similarly, India with crude steel production for 2018 of 106.5 Mt, replaced Japan as the world’s second-largest steel-producing countries. Hence, the top 3 global steel manufacturing nations situated in APAC indicates its affluent manufacturing hub.

· Likewise, the automotive manufacturing sector in APAC is flourishing with some of the leading automotive OEMs situated in Japan, China, and India. 5 out of top 10 global car manufacturers are situated in APAC, and automotive sector of countries such as India, Indonesia, and Malaysia are growing at an impeccable rate with 7.98%, 10.31%, and 12.18% respectively as of 2018 (OICA). Similarly, China in 2018 sustained its apex spot in the global electric car market with sales recorded to be approximately 1.1 million, and with 2.3 million units, it held the largest stock of electric cars. As the modern automotive manufacturing facilities are adopting completely automated solutions and cannot afford downtime, the implementation of diesel generators at facilities is gaining traction.

‘Biodiesel’ Adding an Ecological Front in Diesel Generator Market:

New and innovative fuel sources are presently being industrialized to find alternate energy sources to substitute extensive CO2 emitting conventional fossil fuels such as gasoline and diesel, causing an upsurge in global carbon footprints. As a consequence, biodiesel fuel is replacing diesel in generators since emissions from biodiesel engines are also significantly less polluting than standard diesel fuel. To leverage this trend, several players have directed their R&D towards manufacturing biodiesel fuel genset. For example, Mahindra Powerol Ltd. invented India’s 1st 100% Biodiesel fuel genset (Mahindra Powerol B100 Biodiesel Genset). This generator runs on both diesel and biodiesel and has separate tanks to be operated accordingly.

Diesel Generator Market Companies:

Some of the key players operating in the global market are Cummins Inc., Caterpillar Inc., MTU Friedrichshafen GmbH, Kohler Co., Aggreko PLC., and Generac Power Systems.

Companies are expanding geographically to gain ground over their competitor and hence are open towards mergers and acquisitions. For instance, in 2018, Cummins Inc. announced its acquisition of Silicon Valley-based Efficient Drivetrains, Inc. (EDI), with a portfolio in designing and producing hybrid and fully- electric power solutions for commercial markets. Tracing the necessity of evolution in the power sector, Cummins will leverage the electrification capabilities of EDI to carve a niche for itself.


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