Diesel Generator Market Size, Share & Industry Analysis, By Portability (Stationary and Portable), By Power Rating (Below 75 kVA, 75 - 375 kVA, 375 - 750 kVA, and Above 750 kVA), By Application (Continuous Load, Peak Load, and Standby Load) and By End-user (Mining, Oil & Gas, Construction, Residential, Marine, Manufacturing, Pharmaceutical, Commercial, Telecom, Electric Utility, Data Centers, and Others), Regional Forecast, 2024-2032

The global diesel generator market size was valued at USD 19.46 billion in 2023 and is projected to grow from USD 20.84 billion in 2024 to USD 37.03 billion by 2032, exhibiting a CAGR of 7.45% during the forecast period (2024-2032). The Asia Pacific diesel generator industry held a market share of 33.24% in 2023. Additionally, the U.S. diesel generator market is projected to grow significantly, reaching an estimated value of USD 6.10 billion by 2032, driven by the increasing frequency of power outage, natural disasters, and grid reliability issues. By application, the continuous load segment has contributed 33.24% market share in 2023. 

Diesel generators are useful machines that produce electricity by burning diesel fuel. These machines use a combination of an electric generator and a diesel engine to produce electricity. These generators convert some of the chemical energy contained in diesel fuel into mechanical energy by burning it. The growing operation in the oil & gas sector will create demand in the diesel generators sales. In forecast years, it is expected that the market will boom owing to the emerging infrastructure all over the globe.

IMPACT OF COVID-19 ON THE DIESEL GENERATOR MARKET

The COVID-19 pandemic paused many activities, such as manufacturing and transportation. It caused a significant labor shortage, which affected the supply and demand chain. In addition, suffering from the decreased global real economy and uncertain political landscape caused increases in raw material prices and logistics costs. Travel restrictions also contributed to a slowdown in manufacturing operations, impacting the installation of new diesel gensets. These challenges threatened the business management of several key market players. The significant impact of COVID-19 on the Diesel Generator was noticeable in various industrial sector applications, including automotive, cooling of gas turbine blades, power & process industries, HVACs, and others.

LATEST TRENDS IN DIESEL GENERATOR MARKET

Increasing Efforts to Combat Problems Caused by Power Outages Will Propel Market Growth

Various operations by public and private entities are significantly disturbed by failures in power transmission and distribution networks due to various factors, such as cable faults, climatic problems, unannounced power outages, and grid system malfunctions. Several authorities, such as the European Union (EU) and the U.S. Department of Energy (DoE), are increasingly adopting measures to use a standby source to provide continuous power supply in case of power outages.

Furthermore, the power outage obstructions can last for over weeks, leaving household and commercial chores in jeopardy. These situations can prompt customers to adopt a reliable backup power source.

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DIESEL GENERATOR MARKET DRIVING FACTORS

Significant Expansion of Oil & Gas Sector Will Propel Demand for Diesel Gensets

The consumption of oil and gas has increased tremendously owing to their increasing applications across diverse industry verticals. Additionally, growing discoveries of new large hydrocarbon reserves, along with the exploitation of offshore wells, are set to cater to the demand for diesel gensets.

• The addition of output cuts of 2.5 million barrels per day (mbd) by OPEC+ pushed the Brent oil prices past USD 90/bbl. In contrast, the U.S. Henry Hub natural gas prices rebounded to USD 3.50/mmBtu (metric million British thermal units) in early November 2023. Despite these disruptions, the global oil demand remained on track to grow by 2.3 mbd in 2023 and cross the 100 mbd mark for the first time in history. For example, in January 2022, Baker Hughes announced that the U.S. had added six rigs week on week, taking the total rig count to 610, out of which 495 produced oil and 115 produced gas. 590 rigs out of these are land rigs, 18 are offshore, and 2 are inland water rigs. Canada added five rigs week on week, taking the total rig count to 217, out of which 135 produced oil and 82 produced gas. The Gulf of Mexico accounted for 18 rigs as of January 21, 2022.


• According to the Statistical Review of World Energy 2021 released by B.P., the primary energy consumption in 2021 was 595.15 exajoules, out of which oil accounted for 184.21 exajoules and natural gas accounted for 152.7 exajoules. Therefore, the growing oil and gas consumption will propel the diesel generator market growth.

Rapidly Developing Industrial Infrastructure and Increasing Energy Demand to Complement Market Growth

The increasing need to address the rising production activities across the world is set to boost the demand for diesel gensets.

• According to the United Nations Industrial Development Organization, the Competitive Industrial Performance (CIP) index considers countries' productive capacity, intensity of industrialization, and impact on the world market as major components of industrial performance. The Industrialization Intensity Index portrayed that Brazil experienced a year-on-year average growth rate of -1.47% from 1990 to 2018. Botswana had the highest year-on-year average growth rate at 28.09%. In contrast, Macao SAR, China, had the lowest year-on-year average growth rate at -11.49%.

Furthermore, increasing expenditures and investments to deliver efficient energy management across different sectors are set to unveil new growth opportunities for the diesel generator market.

• For instance, in May 2021, the U.S. Energy Information Administration (EIA) stated that the total national energy consumption equaled 93 quadrillion British thermal units (Btu) in 2020, with over 36% accounted for by the industrial sector. In contrast, the residential and commercial divisions constituted over 16% and 12% of the total energy consumption, respectively.

RESTRAINING FACTORS

Stern Emission Regulations and Growing Integration of Clean Energy Alternatives May Hinder Market Growth

Leading government organizations in several countries have introduced different policies and targets to promote the adoption of green technologies and weaken the dependency on fossil fuels. Several countries are bound to adhere to vast objectives and introduce carbon-free power sources, such as solar, hydro, and wind, that may obstruct the diesel genset market development.

Furthermore, the market is witnessing the introduction of stringent regulations to curb the discharge of damaging substances, which will also hinder the product’s adoption.

• In October 2020, the Delhi Pollution Control Committee banned the use of diesel gensets as part of the Graded Response Action Plan to control the pollution levels in the national capital of India. However, the ban was later lifted in March 2021 as the pollution levels eased in the city.

DIESEL GENERATOR MARKET SEGMENTATION ANALYSIS

By Portability Analysis

Stationary Diesel Generators Gained Traction Due to Their Increasing Use in large industrial applications

Based on portability, the market is segmented into stationary and portable.

The stationary segment led the global market growth in 2023. The wide usage of stationary diesel generators in large industrial applications and commercial spaces will drive the segment's growth. For instance, Cummins India Limited introduced a 'Made in India' product - QSK60 G23: 2500-2750 kVA Diesel Generator (D.G.) series at its 60th Annual Meeting on August 12, 2021. The generator series is an integrated power solution that will be used to address the growing energy needs of India's industrial segments, such as data centers and large-scale infrastructure projects, such as commercial buildings and airports.

Portable generator is the fastest growing segment driven by the demand of mobile generators in several applications such as medical industry, construction projects, mining operations etc.

By Power Rating Analysis

Diesel Gensets with Power Rating above 750 kVA Widely Used Due to Demand in High Power Consumption Industries

Based on power rating, the market is segmented into below 75 kVA, 75- 375 kVA, 375 – 750 kVA and above 750 kVA.

Above 750 kVA is expected as the dominating segment driven by the heavy industrial use. In addition, the heavy use of generator set is used in industries at various levels and needs to bear load at emergencies. This factors is backing the growth of diesel generator market. Therefore, the rise in industrial activities, especially in the oil & gas and construction industries, has increased the demand for diesel gensets with power ratings above 750 kVA. Aggreko provides 375 kVA gas generator hire service that offers cost-effective, low-emission power to consumers who need reliable off-grid energy or wish to implement a combined heat and power package that caters to their specific needs. 375-750 kVA is one of the leading segment driven by the portable generator equipment. The growing demand in the portable equipment in industrial sectors is boosting the 375-750 kVA segment.

By Application Analysis

Continuous Load Segment Is dominating the market owing to rapid growth in industrialization

Based on application, the market is segmented into continuous load, peak load and standby load.

The continuous load segment is projected to account for the leading diesel generator market share due to remote electrification setups helped by various administrations. The increase in industrialization in the world, coupled with increasing demand for continuous load gensets for digital-based industries, drives the segment growth. China, India, and Southeast Asian countries are rapidly industrializing and are greatly depending on backup power sources for the smooth functioning of their industries. According to the BP Statistical Review of World Energy, Asia Pacific consumed 253.72 exajoules of primary energy in 2020. Further, increasing investments across high power industry verticals such as manufacturing, oil & gas, mining, data centers, and many more are set to augment the segment demand.

The standby load segment is growing due to customers' inclination toward reliable backup power sources that consume fuel efficiently. In China, many companies use standby load diesel gensets for their data centers, which have proved efficient for fuel consumption. The Leton Power Diesel generator set provides 100% efficiency while being used as a source of power supply for data centers.

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By End-user Analysis

Growing Investments, Discovery of New Reserves, and Presence of Bulk Reservoirs Will Drive Product Use in Oil & Gas Sector

Based on end-user, the market is segmented into mining, oil & gas, construction, residential, marine, manufacturing, pharmaceuticals, commercial, telecom, electric utility, data centers, and others.

Growing investments in the oil & gas industry, the discovery of new reserves, and the abundant presence of bulk reservoirs will drive the segment growth. Diesel generators can provide continuous power for all related oil and gas operations, such as drilling, pumping, and loading, as they are a reliable source of power. For instance, in 2022, the U.S. transportation sector's distillate (or diesel) fuel consumption (excluding biodiesel and renewable diesel) was about 125 million gallons daily, or about 2.98 million barrels daily. Based on energy content, diesel accounted for about 23% of the total transportation energy consumption and about 6% of the total primary energy consumption in the U.S. The landscape of the segment is shaped by significant reserve expansion plans, along with increasing exploitation of new mineral reserves.

The residential segment is estimated to grow due to an increase in the requirement for consistent power backups for homes to accommodate the rising remote working trend. According to the political scenario of 2020, which followed government policies decided until 2023, oil production is expected to be worth USD 12.8 trillion by 2040. In the sustainable development scenario of 2020, where governments would follow sustainable development according to the emission targets set by the United Nations, the value of oil production was expected to be only USD 8.7 trillion. The growing oil production predicts growth in the use of D.G. sets during the forecast period.

REGIONAL ANALYSIS OF THE DIESEL GENERATOR MARKET

The market has been analyzed in five key regions, including North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

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Asia Pacific dominated the residential generator market due to large-scale urbanization and industrialization. The rapidly expanding data center industry in the region will continue driving the demand for these generators. For instance, in December 2022, Kirloskar signed a letter of intent with RITES Ltd., a well-known transportation infrastructure consulting and engineering firm. The companies aim to collaborate and explore business opportunities in the field of rolling stock, infrastructure, and urban transport in both domestic and foreign markets.

Asia Pacific has also witnessed the setup of medical R&D facilities, remote public health infirmaries, huge treatment hospitals, and drug testing & production units. These initiatives are propelling the growth of the region’s pharmaceuticals industry. Furthermore, various governments have introduced plans to completely electrify remote places, such as villages and small cities in distant places. Additionally, rapid improvement in residential, commercial, and industrial establishments has resulted in a significant increase in energy requirements over the years, fueling the regional market’s growth.

For instance, in September 2019, the U.S. EIA anticipated that over half of the increase in global energy consumption would come from nations that are not a part of the Economic Co-operation and Development (OCED) by 2050. Additionally, the report projected that the energy intake would almost double in the region, with India and China being significant contributors to the surge in demand.

North America’s growth is driven by growing investments in the oil & gas industry, mining industry, and the residential sector. Growing investments in the exploration and production of conventional and unconventional hydrocarbon reserves coupled with rising commercial and manufacturing development activities across the U.S. and Canada majorly contribute to regional growth. For example, energy conglomerate BP published Statistical Review of World Energy 2021, stating that total crude oil production and consumption in the U.S. totaled over 16.47 million barrels per day (bpd) and about 17.17 bpd, respectively, in 2020.

Furthermore, in April 2023, Cummins Inc. declared that it would spend more than USD 1 billion in its engine manufacturing network in the U.S. to upgrade certain facilities to support new clean energy technologies. Cummins said the investment will go to its facilities in North Carolina, New York, and Indiana to upgrade clean energy technologies, including fuel-agnostic engine platforms that run on low-carbon fuels, such as natural gas, diesel, and eventually hydrogen.

In the Middle East & Africa, reduced cost for crude oil & gas exploration and production, coupled with the presence of abundant oil & gas reserves, is likely to lead to the establishment of more hydrocarbon platforms and thereby complement the regional market share. The vast potential across GCC countries, including Kuwait, Oman, the UAE, Qatar, Bahrain, and Saudi Arabia, to explore and produce oil & gas through onshore and offshore assets is set to foster the demand for these generators in the region.

Moreover, increasing expenditure to revolutionize the commercial and industrial infrastructure to attract foreign investments and tourists will favor the construction sector landscape in the region. Additionally, the adoption of advanced techniques by regional players to continue their operations in difficult situations, such as the COVID-19 pandemic, is set to add further to the regional market’s growth.

For instance, in June 2020, the UAE-based Falcon Eye Drones announced that Saudi Arabia was turning to the utilization of Unmanned Aerial Vehicles (UAVs) or drones to monitor projects and ensure safety in dealing with coronavirus outbreaks without discontinuing operations.

COMPETITIVE LANDSCAPE

Caterpillar Inc. to Account for Significant Market Share Owing to Its Extensive Product Portfolio and Strong Brand Value

Caterpillar Inc. is expected to dominate the market as it is focused on enhancing its sales, distribution, and marketing channels through partnerships with different local associates to fortify its product reach across the globe.

Additionally, other key participants operating in the market include Cummins Inc., Aggreko, Atlas Copco, Generac, and Briggs & Stratton, among others. These companies provide gensets of various ratings for different industry verticals. For instance, the U.S.-based Generac Industrial Power or Generac has developed diesel generators ranging from 10 kW to over 1,250 kW in customized and standard designs with abilities to operate efficiently even in harsh conditions.

Consequently, numerous other small and medium-sized players are present across the market, offering different capacity products to cater to continuous, peak, and standby load requirements. These country and stale-level establishments lay more focus on delivering their services to high potential users in emerging economies to serve residential, commercial, telecom, pharmaceuticals, construction, and many other industry verticals, forming a significant portion of the global market’s landscape.

List of Top Diesel Generator Companies:

• Caterpillar Inc. (U.S.)


• Aggreko (U.K.)


• Cummins Inc. (U.S.)


• Himoinsa (Spain)


• John Deere (U.S.)


• Kohler SDMO (France)


• PRAMAC (Italy)


• Kirloskar Electric Co. Ltd. (India)


• Generac Power Systems (U.S.)


• FG Wilson (U.K.)


• Atlas Copco (Sweden)


• American Honda Motor Company Inc. (U.S.)


• Briggs & Stratton (U.S.)


• Ingersoll Rand (U.S.)


• Yamaha Motor Co. Ltd. (Japan)

DEVELOPMENTS IN THE DIESEL GENERATOR INDUSTRY:

• October 2023: Aggreko introduced its latest Tier 4 Final generators to the Canadian market. Available in the U.S. starting in 2022, the units are now available in Canadian Standards Association (CSA)-certified options from 100 kW to 500 kW. The company said it had created the generators to meet the strictest emissions regulations for diesel-fueled generators, including the Canadian Environmental Protection Act (CEPA) and the U.S. Environmental Protection Agency (EPA).


• February 2023: Caterpillar Inc. announced the launch of the Cat® XQ330 Series of Mobile Diesel Generators. It is a new power solution for standby and mission-critical applications that meets the U.S. EPA Tier 4 Final emission standards. Powered by a powerful Cat C9.3B diesel engine, the XQ330 delivers up to 288 kW in standby and 264 kW peak at 60 Hz and up to 341 kVA in standby and 310 kVA peak at 50 Hz applications.


• February 2023: Pramac GmbH, an Italian provider of electrical solutions, generators, and material handling equipment, and a 100% owned subsidiary of P.R. Industrial s.r.l., and part of Generac Power Systems, announced that it had acquired REFU Storage Systems GmbH (REFUstor) from REFU Elektronik GmbH. REFUstor is a developer and supplier of battery storage hardware, advanced software and platform services for the industrial and commercial markets. Headquartered in Pfullingen, Germany, REFUstor was founded in 2021 as a subsidiary of REFU Elektronik, focusing on the development of fully integrated turnkey energy storage systems, standalone storage inverters, and an energy service management platform.


• January 2022: The China Engineering Standards Association honored Cummins Power Generation (CPG) with its first PowerBloc^TM project as part of the Science and Technology Achievement Data Awards. Launched in May 2021, PowerBloc integrates diesel engines (electrical systems), water tanks (cooling systems), fuel tanks (fuel systems), mufflers (noise reduction systems), electrical panels (control systems), and fire protection systems in a highly integrated 40ft standard container. The first of the three PowerBloc generators was installed at customer offices in September.


• September 2021: Kohler-SDMO launched its onboard Power Optimized Design Solutions (PODS) product line in response to the increased demand for high-powered generators. They offer the highest standards of reliability, performance, durability, security, modularity, and competitiveness. Walk-in PODS have enough space for the base module with a width and height of 4 meters. The enclosures provide optimal access to various parts of a diesel generator, allowing workers to perform all functions and maintenance tasks easily. Single-turn doors with locks and panic bars facilitate daily access to the enclosure. A button near the front doors controls the interior lighting system.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, product/service types, and leading applications of the product. Besides, it offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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