Power Upward Trend for Diesel Generator Market
The global diesel generator market is set to grow from 14.7 billion USD in 2016 to 17.6 billion USD in 2020, representing a compound annual growth rate of 4.5%, according to research and consulting firm GlobalData.
The company’s latest report states that generator manufacturers hope hybrid systems, which improve the overall efficiency and output of renewable energy power plants, will drive demand for diesel generators. Indeed, as industrialization and increasing GDP fuel electricity requirements in developing countries, governments are struggling to meet capacity addition needs, and diesel generators may offer a seemingly cost-effective solution to this problem.
Prabhanjan Kumar Singh, GlobalData’s Analyst covering Power, explains: “The price of a gas generator can be three to four times that of a diesel generator with the same specification. Although in the long term gas generators are more economical, they lose out to diesel generators due to their high start-up cost.”
China is one such developing country which benefits from the cost and effectiveness of diesel generators, with improved living standards increasing the demand for power back-up devices. In 2015, the Chinese diesel generator market was worth over 3 billion USD and accounted for 22.1% of the global market, according to GlobalData.
Gas as the Less Preferred Fuel Option
Singh continues: “Many developing countries around the world still lack adequate grid infrastructure for electricity transportation, and not every country is rich in natural gas reserves. The absence of trans-national or domestic gas pipelines means the price of gas increases, making it a less preferred fuel option. In this way, power back-up units such as diesel generators play an important part in meeting electricity needs.
“China does not have an extensive network of gas pipelines in place, which creates a major hurdle for most industries with a gas requirement. The government is investing heavily to ramp up this capacity, and the benefits are expected in the near future, but until that point, this will be the primary barrier for the growth of the gas generator market and an opportunity for diesel generator growth.”