Global Diesel Genset Market Size (2023 - 2030)

The Global Diesel Genset Market was valued at USD 19.3 Billion and is projected to reach a market size of USD 33.6 Billion by the end of 2030. Over the forecast period of 2023-2030, the market is projected to grow at a CAGR of 7.2%.

A diesel generator is a distributed generation unit that combines a diesel engine with an electric generator to produce power through internal combustion. Unlike traditional power plants, distributed generation offers the advantage of rapidly scaling up electricity production. Diesel generators play a critical role in providing electricity to households and businesses during power disruptions, ensuring uninterrupted daily activities and business operations. These generators operate on the principle of converting kinetic energy into electrical energy. The global Diesel Gensets Market is experiencing significant growth, driven primarily by the increasing demand for emergency and stationary power backup across various industries like marine, oil and gas, manufacturing, healthcare, construction, telecom, and automotive. The need for continuous and reliable power supply in sectors such as healthcare, manufacturing, and data centers is fueling the market's expansion. Factors contributing to the market's growth include the ability to deliver high capacity and durability, along with low volatility rates and easy access to fuel. The rising frequency of severe weather events and prolonged power outages, coupled with the growing importance of backup power solutions, are further boosting market prospects

Key Market Insights:

Data from the World Bank reveals a significant increase in power outages experienced by businesses worldwide, surging from an average of 2.42 incidents per month in 2019 to 6.19 incidents per month in 2020. This growing apprehension regarding power disruptions is fostering the demand for dependable power sources like standby generators. Consequently, it is expected to propel the expansion of the global diesel genset market throughout the forecast period. Businesses and industries are increasingly turning to standby generators to ensure uninterrupted operations, fueling market growth. Key drivers include the ability of diesel gensets to provide high capacity, longevity, low volatility rates, and ready fuel availability. Additionally, the market benefits from heightened climate-related concerns and the rising frequency of extended power disruptions. Industries like marine, oil and gas, manufacturing, healthcare, construction, telecom, and automotive are among the prominent end-users contributing to the diesel gensets market's expansion. This trend is expected to persist as the demand for dependable power solutions remains paramount across various sectors. However, efforts by governments to reduce greenhouse gas emissions and the continuous increase in petroleum prices are significant factors that could impede the growth of the global market during the forecast period.

Global Diesel Gensets Market Drivers:

The reliability of diesel gensets by different sectors is fueling the growth of the market

In our increasingly interconnected and technology-dependent world, the importance of having a dependable backup power source has never been more critical. Various industries, ranging from data centers and healthcare facilities to manufacturing plants and telecommunications, rely heavily on uninterrupted power to ensure their operations run smoothly. This surging demand for reliable backup power has had a profound impact on the diesel genset market, positioning it as the preferred choice for numerous businesses and organizations. A primary driver of this growing demand for diesel gensets as backup power solutions is their exceptional reliability. Diesel gensets are renowned for their robustness and their ability to consistently deliver stable power output over extended durations. This reliability is a result of the meticulous design and engineering of diesel engines, honed over decades to withstand rigorous usage and operate effectively under diverse conditions. This inherent reliability makes diesel gensets exceptionally well-suited for critical applications where any disruption in power supply could lead to dire consequences such as data loss, equipment damage, or compromised patient care.

The efficiency and cost-effectiveness provided by Diesel Genset are propelling the growth of the Market

Diesel gensets present highly efficient and economically viable backup power solutions. Their efficiency, resulting from well-engineered diesel engines and advancements in generator technology, ensures optimal fuel utilization. This, in turn, translates to reduced operational costs when compared to alternative backup power options. Diesel fuel boasts widespread availability, with a robust infrastructure for fuel distribution and storage already in place, making it a convenient and accessible choice for backup power systems. This ease of access and cost-effectiveness significantly contribute to the widespread adoption of diesel gensets across various industries and sectors. Moreover, diesel gensets' flexibility is another key driver behind their growing demand. These generators are available in a diverse range of power capacities, from compact portable units suitable for residential use to large-scale industrial-grade models capable of providing power to entire buildings or facilities. This scalability empowers businesses to select the ideal generator size to meet their specific power needs effectively.

Advancements in technology are augmenting the growth of the Diesel Genset Market

The global diesel genset industry is set to experience substantial growth, driven by several key factors. Rapid digitalization, the widespread adoption of intelligent personal assistants, and the rising demand for autonomous vehicles are just a few contributing factors. Additionally, the surge in demand for Internet of Things (IoT) devices, digital currencies, and cloud computing is creating a need for additional data storage capacity. This growing requirement for data centers to handle the increasing volume of digital data will, in turn, fuel the demand for diesel gensets, bolstering the market's expansion.

Diesel genset’s ability to respond quickly during power outages is a critical factor for the growth of the market

Diesel gensets stand out for their rapid response times compared to alternative backup power solutions. When a power outage occurs, diesel gensets can swiftly initiate and deliver electricity within seconds. This swift response is of paramount importance in scenarios where even a momentary disruption in power could result in substantial financial setbacks or jeopardized safety. For instance, in critical sectors like healthcare, where the continuous operation of life-saving medical equipment depends on an uninterrupted power source, the prompt action of diesel gensets is highly advantageous. Furthermore, the growing need for dependable backup power has driven innovation within the diesel genset market, leading to technological enhancements.

Global Diesel Genset Market Opportunities:

The escalating growth of data centers and the expanding digital ecosystem are creating a surge in demand for backup power solutions, driving the need for reliable and efficient diesel gensets. As data storage and processing become increasingly vital in various industries, including cloud computing and IoT, the demand for uninterrupted power supply to safeguard digital operations is on the rise. The transition towards cleaner and more fuel-efficient diesel genset technologies, including hybrid and dual-fuel systems, presents an opportunity to address environmental concerns while providing dependable backup power. The market can capitalize on the development of microgrids, which incorporate diesel gensets as a core component, ensuring energy resilience in remote or underserved regions. Overall, the diesel genset market is poised to thrive in an era where dependable power supply is indispensable across diverse sectors.

Global Diesel Genset Market Restraints and Challenges:

The diesel genset market faces significant hurdles to its growth, including substantial capital requirements and substantial expenses associated with installation and maintenance. Additionally, the market is impacted by a growing emphasis on renewable energy generation and increasingly strict government regulations regarding greenhouse gas emissions stemming from diesel gensets, which may hinder its expansion.

GLOBAL DIESEL GENSET MARKET REPORT COVERAGE:

Global Diesel Genset Market Segmentation: By Power Rating

• Low Power Generator

• Medium Power Generator

• High Power Generator

The low-power generator category dominated the segment and claimed a substantial portion of the revenue, accounting for 44.0% in 2022. This can be attributed to its wide range of applications in both commercial and residential sectors. Generators with a capacity below 80 kW are commonly used as backup power solutions in residential settings to support essential devices like water pumps, purifiers, air conditioning units, geysers, and more. Moreover, their cost-effectiveness is anticipated to be a significant factor driving demand in the years to come.

Conversely, the high-power generator segment is poised for the fastest growth with a notable CAGR projected over the forecast period. This surge in demand primarily arises from industries such as power generation, manufacturing, and marine, where there is a substantial need for continuous and reliable power supply. High-power diesel generators find extensive use in these sectors to generate and distribute power in off-grid remote areas, as it often proves uneconomical to establish direct grid connections in such remote locations.

Global Diesel Genset Market Segmentation: By Application

• Industrial

• Commercial

• Residential

In 2022, the commercial application segment secured the largest market share, commanding 45.34% of the market, and it is expected to experience significant growth throughout the forecast period. This substantial growth is attributed to the broad range of applications spanning various industries, including data centers, government facilities, educational institutions, healthcare, hospitality, telecommunications, agriculture, and more. Diesel gensets find widespread use in commercial establishments to provide backup power during unexpected power interruptions, such as voltage fluctuations and electrical outages, which, if not addressed promptly, can result in substantial financial losses.

The industrial diesel generator segment stands out as the fastest-growing market in 2022. This segment encompasses diverse industries such as manufacturing, construction, electric utilities, mining, transportation, logistics, and the oil and gas sector, all of which exhibit high power consumption requirements. Favorable government policies aimed at promoting industrial development, particularly in emerging economies like China, India, and Brazil, are key drivers fueling the growth of this segment.

Global Diesel Genset Market Segmentation: Regional Analysis

• North America

• Europe

• Asia-Pacific

• South America

• Middle East & Africa

In 2022, Asia Pacific stood as the largest regional segment, commanding a substantial 30% share of the market, with China playing a pivotal role as a major revenue contributor. Factors driving this regional dominance include the proliferation of manufacturing facilities, extensive infrastructure projects, a widening gap between electricity supply and demand, and the rapid expansion of commercial office spaces, particularly in China. Across the Asia Pacific, diesel generator sets primarily serve as backup power sources due to the region's moderately developed power infrastructure, which supplies relatively low-cost electricity from the utility grid. The demand for diesel generator sets varies depending on factors such as the state of a country's power infrastructure, emission regulations, and the purchasing power of consumers.

North America, on the other hand, accounted for a significant market share in 2022 and emerged as the fastest-growing segment. This growth can be attributed to the ongoing development of data centers and other commercial markets, coupled with the increasing vulnerability of power grids to weather-related outages. These factors have driven the demand for reliable backup power solutions, thereby boosting the market for diesel generators in the region.

COVID-19 Impact on Global Diesel Genset Market:

The pandemic disrupted supply chains, delayed manufacturing processes, and caused economic uncertainties, affecting the market's performance. During the initial phases of the pandemic, there was a decline in demand for diesel gensets as businesses scaled back operations and postponed investments in backup power solutions. Lockdowns and restrictions further hindered the deployment of gensets in various industries. However, as the pandemic unfolded, the importance of reliable backup power became evident. Businesses, healthcare facilities, and data centers need uninterrupted power supply to operate efficiently, especially with the increased reliance on remote work and digital services. This realization led to a resurgence in demand for diesel gensets as companies sought to secure their operations against power outages.  In the post-pandemic recovery phase, the diesel genset market is expected to continue its growth trajectory, supported by the lessons learned during the pandemic about the critical role of backup power in maintaining business continuity and public services.

Latest Trends/ Developments:

The global diesel generator market is experiencing robust growth due to a combination of factors. These include the heightened demand for dependable backup power solutions in critical sectors like healthcare, data centers, and telecommunications. Government initiatives supporting infrastructure development projects are further stimulating the market. Additionally, there is a growing necessity for continuous power supply in remote and off-grid regions. The expansion of the manufacturing and construction industries, along with the rising frequency of natural disasters, is contributing to increased demand for diesel generators, especially in military applications. Furthermore, heightened awareness about the advantages offered by diesel generators and innovations by key industry players in creating new product variants are driving market growth. Factors such as the increasing preference for energy-efficient and low-emission generators, coupled with rapid technological advancements, are also propelling the market forward.

Key Market Players:

1. Cummins Inc.

2. Kohler Company

3. Mitsubishi Heavy

4. Caterpillar Inc.

5. Briggs and Stratton

6. Kirloskar Oil ngine

7. Himoinsa SL

8. Mahindra Powerol

9. FG Wilson Inc.

10. Broadcrown Ltd.

In January 2023, Cummins Inc. unveiled its latest marine diesel generator, the Cummins Turbo (MDCT) genset. This robust genset offers the flexibility of pairing with either a low or high kW Cummins B4.5 auxiliary engine, enabling a wide range of genset ratings, from 40 kWe to 80 kWe and 80 kWe to 110 kWe. In July 2022, Octopus Hydrogen and GeoPura joined forces to deliver green hydrogen solutions that aim to replace environmentally harmful diesel generators. This collaborative agreement involves both companies working together to offer sustainable alternatives to fossil fuels, thus accelerating the decarbonization efforts across various industries.