EUROPE POWER GENERATOR MARKET
Uninterrupted supply of electricity is essential for every sector in the economy. In Europe, electricity is generated, transmitted and distributed by many parties, while there are some Government organizations that regulate this sector.
The energy consumption in Europe is steadily increasing and to ensure that even if there is a breakdown in the grid supply electricity is accessible power generators play an important role.
EUROPE POWER GENERATOR DRIVERS
The factors that are helping in the growth of this market are :
- In some countries the governments are looking forward to further electrification in the rural segments.
- Escalating data center outage costs and expansion of the datacenter industry
- Growing demand for uninterrupted power supply- Increased significance of power backup and emergency preparedness amongst consumers will complement the business growth
- Emerging trends in real estate and expansion in the telecom sector
- Favorable regulatory policies to boost investment
- Rapid industrialization & infrastructure development- Mass deployment of these units across commercial, industrial and residential spaces catering to manufacturing, mining, oil & gas and construction areas amongst others will stimulate the overall market outlook
- Unreliable and ageing electric grid system along with rapid population growth
- Further, growth of the IT sector and increase in electronic load requirements due to rapid digitalization accompanied by customer preference towards supply of consistent electricity will benefit the industry outlook.
EUROPE POWER GENERATOR CHALLENGES
- High capital, installation & maintenance costs
- Shifting trends toward renewable power generation
EUROPE POWER GENERATOR MARKET SEGMENTATION
By Power Rating
- <75 kVA
- 75-375 kVA
- 375-750 kVA
- >750 kVA
<75 kVA generator sets have held the major share in terms of revenue. This was mostly due to the increased requirement from the residential sector who have an increased data usage driven by smartphones, social networks and e-commerce platforms which are fueling their demand. Additionally demand for this segment is rising due to Covid-19 where an increasing number of organisations are allowing their employees to work from home.
The 75-375 kVA market has been increasing due to ongoing infrastructural development due to investments in the construction sector. These generators are required to provide an uninterrupted power source to operate the equipment and jobsite tools
By End Use
- Commercial- The main commercial users of the power generators are-
- Data Centers
- Educational Institutions
- Government Centers
- Retail Sales
- Industrial- The major industrial users of the power generators are-
- Oil & Gas
- Electric Utilities
- Transport & Logistics
The commercial and industrial are growing steadily and showcasing a higher growth rate than the household segment in recent years due to the rapid development of the data centers along with the upgrades in the IT sector that have stimulated their demand. In 2019, the largest share of diesel power generators was from the industrial sector. The UK and Russia are expected to witness further industrial growth in the mining, agriculture, manufacturing and construction field.
- Peak Shaving
Growth in the prime/continuous segment is driven by construction activities while standby generators depend mostly on power cuts and adverse weather conditions. An ageing grid system in Europe is also facilitating the demand for standby generators.
Diesel Generators have dominated the market for a long time because of their reliable performance, longer life span and increased flexibility in functioning. However introduction of stringent regulations and norms is shifting customer preference to cleaner units. Therefore gas and hybrid generators are expected to see higher growth due to shifting customer preference towards energy security and desire to reduce dependency from consumption of fossil fuel. Natural gas generators are being preferred due to availability and development of this technology. They also have lower maintenance cost.
Among the many countries in Europe, the UK holds the most prominent share in this market as the demand for regular power supply is generated from its commercial space.
Eminent players in global generator sets industry include
- Caterpillar Inc.
- American Honda Motor Company, Inc
- Generac Power Systems
- Briggs and Stratton
- Yamaha Motor Corporation, USA
- John Deere
- Champion Power Equipment
- WINCO Generators
Most players look at inorganic strategies such as mergers and acquisitions along with new product launches in order to boost growth and strengthen their hold in the market. For example in june 2018, Selmec which is a designer and manufacturer of diesel generators in the 10-2750kW range and gas generators in 30-400 kW range was acquired by Generac Power Systems.
For the players, a major opportunity is that the consumers are willing to shift to cleaner fuels.
- May 2020 Caterpillar Inc announced the launch of Cat GC standby diesel generators , which has eight new models with standby power ratings from 250 kW to 600 kW.
- February 2019 Cummins Inc. launches the new ignition-protected 7.5 kW Onan marine generator for the US Coast Guard. The engine meets the EPA Tier 3 emission standard and supplies auxiliary power to marine vessels.
- May 2017: Caterpillar Inc adds a 12 kW model to its portable power range.
Deficient power supply, rising population, and lack of proper grid infrastructure are set to increase the portable generator market.The market in Europe is anticipated to witness substantial growth over the forecast period owing to rising costs of power outages across several IT enabled service firms and data centers, along with growing consumer awareness regarding the requirement of reliable emergency power supply. In addition, the market is driven by the rising vulnerability of grid power stations to disasters caused by changing weather conditions across the country.