Rapid Development of Data Centers Driving Diesel Generator Set Industry Expansion

According to the World Bank, 47% of the people in Nigeria do not have access to grid electricity and those with access have to face frequent power cuts. The organization also states that 178 million people in India did not have access to grid electricity in 2017. Weak power infrastructure in countries, such as India and Nigeria, characterized by considerable power transmission losses and massive base power deficit, will create a huge requirement for alternative power sources, such as diesel gensets.

Besides, the increasing construction of data centers, on account of hyperscale generation and consumption of data, will help the diesel generators market demonstrate a CAGR of 6% between 2020–2030. According to P&S Intelligence, the market revenue will grow from $13,773.0 million in 2019 to $21,929.9 million by 2030. Data centers serve as supportive infrastructure to collect and analyze data and offer related services. In the coming years, increasing advancements in autonomous vehicles and intelligent personal assistants and surging application of the internet of things (IoT) will result in the largescale construction of data centers.

Hotels, hospitals, telecom towers, commercial offices, retail establishments, amusement parks, cold storage facilities, petrol pumps, party halls, public transport agencies, manufacturing plants, oil and energy companies, locomotives, small industrial units, construction sites, and residential structures use diesel gensets to meet backup power and prime power requirements. In the last few years, these alternative power sources were primarily used as a backup power source in individual houses, data centers, housing societies, retail outlets, hospitality establishments, and telecom towers.

Stationary and portable diesel generator set used in different premises are available with a power rating of 7–14 kVA, 15–24 kVA, 25–44 kVA, 45–69 kVA, 70–99 kVA, 100–149 kVA, 150–199 kVA, 200–299 kVA, 300–399 kVA, 400–499 kVA, and 500 kVA and above. Some of the prominent manufacturers of different types of diesel gensets with multiple power ratings are Caterpillar Inc., Siemens AG, General Electric Company, Denyo Co. Ltd., Generac Holdings Inc., AB Volvo, Atlas Copco AB, Cummins Inc., Kirloskar Oil Engines Limited, and Kohler Co.

Globally, the Asia-Pacific region led the diesel generator set market in the preceding years. This is attributed to the significant surge in construction activities, due to the ongoing housing projects and the increasing number of industrial units in India and China. For instance, the Pradhan Mantri Awas Yojana–Urban (PMAY-U), a flagship scheme of the Government of India aims to provide a pucca house to all eligible urban households by the end of 2022.

In the coming years, the North American region will emerge as a significant user of diesel gensets due to the frequent occurrence of power outages, owing to extreme weather conditions such as hurricanes. Moreover, the ongoing infrastructure development in suburban regions of Canada and the U.S., on account of the booming population, flourishing construction sector, and lowering mortgage rates will also facilitate the deployment of diesel gensets in the region. Additionally, the rising number of commercial and housing projects will also result in the largescale installation of such power sources in North America.

Therefore, the increasing uncertainties in grid electricity and the soaring number of data centers will lead to the widescale adoption of diesel gensets, globally.