Reciprocating engine-based gensets are among the fastest-selling, least expensive distributed generation (DG) technologies in the world. Global annual diesel genset capacity additions are expected to increase from 62.5 GW in 2015 to 103.7 GW in 2024, while global revenue from the installation of diesel gensets is expected to grow from $41.6 billion in 2015 to $67.9 billion in 2024, according to a new report from Navigant Research.
In backup or standby applications, diesel gensets offer reliable performance with expanding opportunities among homeowners and commercial facilities that require mission-critical power in the event of a grid outage, like hospitals and data centers.
While the diesel genset market has historically represented the leading baseload DG technology, natural gas (NG) gensets are capturing increasing market share in North America due to tightening emissions regulations and inexpensive shale gas. There may be a ripple effect throughout the world as other countries seek to tap unconventional shale gas reserves.
Annual NG genset installations are expected to reach 27.2 GW by 2024 and generate $146.8 billion in cumulative revenue between 2015 and 2024, according to Navigant.
Major players in the diesel genset market include Caterpillar and Cummins Power Generation. Kohler, Generac, MTU Onsite Power and others are also expected to see continued growth. Because companies are increasingly diversified across different power classes and fuel types, the market is expected to remain stable, but entry for new market participants in the mid- and high-power classes will be difficult, Navigant says.
Many companies are shifting or expanding their focus to NG gensets and offering diesel-to-gas conversion kits. While economic growth in the developing world is a prime opportunity for incumbent manufacturers, new low-cost entrants from Asia Pacific are increasingly competitive in those regions in the lower power classes.
Asia Pacific is forecast to be the largest market for diesel gensets, followed by Western Europe and North America. Leading countries for diesel genset installations include the United States, China and India, among others.
Globally, annual capacity installations of diesel gensets in the 500 kW–3.5 MW range are expected to account for the vast majority of installed capacity.