Genset Market

Increasing number of power outages

Power outages have severe economic and social repercussions on communities across the world. The increasing reliance of society on energy limits tolerance for power outages, emphasizing the need to strengthen power system resilience against natural disasters. Longer—and potentially life-threatening—blackouts are becoming a greater hazard as natural catastrophes grow more common and severe as a result of climate change.

Extreme weather events accounted for 1.33 billion outage hours in 2020, a 70% increase over 2019. According to the U.S. Energy Information Administration, the average duration of annual electric power interruption stood at 7 hours from 2017 to 2021 in US. Additionally, according to the Department of Energy, power outages cost U.S. economy USD 28 billion to USD 169 billion annually.

According to the U.S. Energy Information Administration, the average duration of annual electric power interruption stood at 7 hours from 2017 to 2022. Electric utility companies in the U.S. are confronted with a significant obstacle in the form of escalating maintenance expenses associated with aging infrastructure. Approximately 70 percent of transmission lines in the U.S. are more than 25 years old and nearing the end of their typical 50-80 year lifespan. As time passes, various components of the infrastructure, such as transmission towers, transformers, and power lines, undergo deterioration, resulting in frequent breakdowns and power outages.

Thus, the growing power outages are anticipated to result in an increase in demand for gensets over the forecast period.

Furthermore, India is the world's third largest energy consumer, with coal meeting the majority of its energy needs. India is facing a power crisis because coal supplies in certain states are rapidly depleting, amid rising demand for electricity. According to the Government Advisory Body of India, India will need up to 28 gigawatts (GW) of new coal-fired power plants by 2032 to meet the demand for electricity, which is expected to more than double from the current 404.1 GW in 2023.

The power ministry has invoked emergency provisions, directing all imported coal-based (ICB) power plants to run at full capacity to meet the growing power demand.

Rising demand for uninterrupted & reliable power supply

With rapid industrialization and growing power consumption, the need for uninterrupted power supply is also rapidly growing in the market. According to the International Energy Administration, the electricity demand is anticipated to grow at a faster rate of 3% per year from 2023-2025 compared to the 2022 growth rate. A continuous power supply is the baseload electricity required to run a predefined set of electrical equipment. The baseload electricity supply must be always maintained and is the minimum amount of electricity an end user’s facility will need to successfully operate the equipment and systems at the facility.

Many end user facilities generate their base load power supply through gensets due to various factors such as the inaccessible grid electricity and the intermittent nature of grid connected electricity. For instance, end users who use diesel or natural gas fuel-based generators for oil & gas and mining applications mostly operate in remote areas and generate their base load electricity through these generators.

Moreover, the need for an uninterruptible power supply from various end-users, including the utility and power generating, chemical, oil & gas, residential, IT/telecom, healthcare, agriculture, mining, and construction industries is driving the demand for gensets to meet their demand. For instance, hospitals, clinics, and medical facilities require continuous power supply to ensure the seamless operation of life-saving equipment, such as ventilators, life support systems, and diagnostic machines.

The Global Genset Market Industry is projected to experience robust growth over the next decade. With a market value anticipated to reach 42.6 USD Billion in 2024 and 80.6 USD Billion by 2035, the industry is poised for substantial expansion. This growth trajectory is supported by a compound annual growth rate of 5.96% from 2025 to 2035. The increasing reliance on gensets for various applications, coupled with technological advancements and regulatory support, indicates a promising future for the market. As industries continue to evolve and demand for reliable power solutions rises, the genset market is expected to thrive, reflecting broader trends in energy consumption and infrastructure development.

Regulatory frameworks and government incentives significantly impact the Global Genset Market Industry. Many governments are implementing policies that promote the use of clean and efficient power generation technologies. Incentives such as tax breaks, subsidies, and grants encourage businesses to invest in gensets that meet environmental standards. This regulatory support not only fosters market growth but also drives innovation in genset technology. For instance, countries with stringent emissions regulations are witnessing a shift towards cleaner genset options, further enhancing market dynamics. As a result, the combination of regulatory support and market demand is likely to propel the genset market forward in the coming years.

Infrastructure development remains a key driver in the Global Genset Market Industry, particularly in emerging economies. Governments are investing heavily in transportation, energy, and urban development projects, which necessitate reliable power sources. The increasing number of construction sites and infrastructure projects creates a substantial demand for gensets to provide temporary power solutions. For example, in regions where grid connectivity is limited, gensets serve as essential power sources for construction activities. This trend is expected to contribute significantly to the market's growth, with projections indicating a market value of 80.6 USD Billion by 2035, reflecting the ongoing infrastructure boom.

The Global Genset Market Industry experiences a notable surge in demand for reliable power supply across various sectors, including healthcare, telecommunications, and manufacturing. As industries increasingly rely on uninterrupted power for operations, the genset market is projected to reach 42.6 USD Billion in 2024. This growth is driven by the need for backup power solutions to mitigate the risks associated with power outages. For instance, hospitals require continuous electricity for life-saving equipment, highlighting the critical role of gensets in ensuring operational continuity. Consequently, this trend underscores the importance of gensets in maintaining productivity and safety in diverse applications.

Technological advancements play a pivotal role in shaping the Global Genset Market Industry. Innovations in engine efficiency, emissions reduction, and digital monitoring systems enhance the performance and reliability of gensets. Manufacturers are increasingly focusing on developing eco-friendly gensets that comply with stringent environmental regulations. For instance, the integration of IoT technology allows for real-time monitoring and predictive maintenance, reducing downtime and operational costs. These advancements not only improve the overall efficiency of gensets but also cater to the growing demand for sustainable energy solutions. As a result, the market is poised for steady growth, driven by these technological innovations.

The transition towards renewable energy sources significantly influences the Global Genset Market Industry. As countries strive to meet their renewable energy targets, gensets are increasingly utilized as backup power solutions to complement intermittent renewable sources like solar and wind. This hybrid approach ensures a stable power supply, particularly in regions with variable weather conditions. The growing integration of renewable energy into power grids necessitates reliable backup systems, thereby boosting the demand for gensets. This trend aligns with global sustainability goals and is expected to contribute to a compound annual growth rate of 5.96% from 2025 to 2035, reflecting the evolving energy landscape.

Major market players’ growth depends on market conditions, government support, and industry development. Thus, the vendors should focus on expanding geographically and improving services. Many global, regional, and local vendors characterize the Genset market. The market is highly competitive, with all the players competing to gain market share. Intense competition, rapid advances in technology, frequent changes in government policies, and environmental regulations are key factors that confront market growth.

The vendors compete based on cost, product quality, reliability, and government regulations. Vendors must provide cost-efficient, high-quality products to survive and succeed in an intensely competitive market.

Cummins Inc (Cummins) is a firm that specializes in power technologies. It develops, manufactures, and sells diesel and natural gas engines and power train components. The company's products include air handling systems, after-treatment, fuel systems, control systems, turbochargers, filtration, electric power generating systems, transmissions, batteries, and electrified power systems.

Cummins sells to original equipment manufacturers, dealers, distributors, and other businesses. Its services consumers in various industries across North America, Europe, Asia Pacific, and South Pacific. Worldwide, the corporation has distribution, manufacturing, and other facilities. Cummins is based in Columbus, Indiana, in the United States.

Caterpillar Inc (Caterpillar) is a construction, transportation, and energy equipment producer. Construction and mining equipment, industrial gas turbines, forestry equipment, diesel-electric locomotives, and diesel and natural gas engines are all designed, manufactured, marketed, and sold by the company. The company offers asphalt pavers, backhoe loaders, compactors, draglines, integrated systems, reciprocating engines, and other products. Customers and dealers can now get retail and wholesale financing for Caterpillar goods from Caterpillar. Through its subsidiaries and dealers, the company markets and distributes its products across North and South America, Asia-Pacific, Africa, the Middle East, and Europe.