The genset market is witnessing growth as a result of the increasing number of data centers and low production of power and widespread grid uncertainties around the world. As a result, the revenue garnered by generator manufacturers is expected to increase from $17,592.6 million in 2019 to $27,863.0 million by 2030, at a 5.8% CAGR during the forecast period (2020–2030). A genset is a combination of an internal combustion engine (ICE), alternator, and numerous accessories and controls.
The categories under the power rating segment are 5 kilovolt-Amperes (kVA)–75 kVA, 76 kVA–375 kVA, 376 kVA–750 kVA, and above 750 kVA. Among these, the 76 kVA–375 kVA category held the largest share in the genset market in 2019, in terms of value. This is attributed to the wide usage of generators with this power rating range in commercial offices, small industrial complexes, hotels, and telecom towers. Moreover, the increasing construction activities and infrastructure spending are driving the demand for these generators around the world.
One of the strongest drivers for the genset market is the establishment of data centers. With the increasing usage of smartphones, the internet, cloud computing, autonomous and connected vehicles, streaming services, and intelligent personal assistants, a rising volume of data is being created and consumed.
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Resultingly, data centers are being constructed to provide this voluminous data adequate storage. Since such places cannot tolerate power cuts because of the sensitive nature of their components and systems, they need generators for consistent Ampere and voltage ratings.
Similarly, the genset market is also being propelled by the persisting problems of insufficient electricity production and grid uncertainties in several countries. Poor countries, such as Nigeria and Ghana, already produce way less energy than they need, and their grid infrastructure is also not reliable, both of which lead to huge transmission losses. Some reasons behind grid failures include the non-payment of the high maintenance charges, aging infrastructure, electricity and component theft, and natural disasters, such as tornadoes, hurricanes (also called cyclones and typhoons), and earthquakes.
Till 2019, Asia-Pacific (APAC) dominated the genset market due to the large-scale industrialization being done under government initiatives such as Make in India, Making Indonesia 4.0, and Made in China 2025. Thus, the increase in the number of factories is resulting in a rise in the demand for generators. The highest CAGR during the forecast period is projected to be witnessed in the Middle East and Africa (MEA), owing to the rapid industrialization in Saudi Arabia, Egypt, the U.A.E., and Turkey and preparations for upcoming global events.
Hence, the market will keep growing with the increasing pace of industrialization and construction.
