2024 H1

An Exceptional Year...

At face value, 2024 has been an exceptional year for the diesel generator sets industry, with the market edging towards $5 billion in Q2.  

But this masks differing trends and some volatility across regions and power bands.  

We'll look at some of these below. 

... But a Two-Speed Market

The market for diesel generator sets has always had a demarcation point, somewhere around 1,500 - 2,000 kVA.

At ratings below this level, there has always been a multitude of producers, with independent packagers and low cost country producers accounting for around two thirds of the global market, and more at the lowest power ratings.  

At ratings above the demarcation, there's a complete switch-around in the competitive structure of the industry.  Premium global vertically-integrated players account for around three quarters of the market at these higher ratings.   

And in 2024, that demarcation point has defined what feels like two completely separate markets.  One growing very rapidly and the other more patchy, even declining substantially in some regions.  

2024 Around the Regions

Driven by a very strong data center sector, North America remains the fastest growing region across the global industry, up around 30% on 2024 H1.  

The data center sector has also played a big part in growth across China and the rest of Asia, up 22% overall.

Worldwide, the fastest growing power bands have been in the 2,000 - 4,000 kVA range.  Compared with the same period in 2023, 2024 H1 growth has been:

• 35% from 2,001 - 3,000 kVA

• Around 50% from 3,001 - 4,000 kVA

Europe, which had a very strong 2023, has declined around 12% in 2024 H1. And behind this are two very different growth stories:

• A decline of 30% below 1,500 kVA, and greater than this at the lower power ratings.

• An increase of more than 50% from 2,001 - 3000 kVA

• An increase of almost 40% from 3,001 - 4,000 kVA

Below we'll look at these in more depth.

North America

North America continues to be the standout region, driven by strong data center sector growth.  In  2024 H1, the region has seen overall industry growth of around 30% compared with the same period in 2023.  Growth has been especially strong at higher ratings:

• 40% from 2,001 - 3,000 kVA

• More than 50% from 3,001 - 4,000 kVA.  

And there's no sign of this abating in the foreseeable future. 

In 2024, North America market activity has been more muted at lower power ratings, particularly below 750 kVA and may see a single digit % decline in 2024.  

But the longer term trend in North America at lower power ratings has been for growth well above the global average.  

Compared with most other global regions, North America has a relatively robust economy, the utility grid infrastructure is aging and the region is subject to occurrences of extreme weather.  All of these combine to create a favorable long term market environment for diesel generator sets.  

Europe

The European market above and below around 1,500 kVA looks like two different worlds in 2024.  

Overall, in 2024 H1, the market declined 12% compared with 2023 H1, but in reality:

• Below 1,500 kVA, the market declined 30% in 2024 H1 (higher at the very lowest power bands, for example -45% from 76 - 250 kVA)

• Above 1,500 kVA, the market grew by 25%, around 50% from 2001 - 3000 kVA and around 40% from 3001 - 4000 kVA.

Sub-1,500 kVA Europe Market

2023 had been an exceptional year for the sub-1,500 kVA part of the industry.  Across the region, there were widespread fears of utility power outages, particularly in the winter of 2023, due to gas shortages.  Many businesses and government facilities bought or rented generator sets and the result was a spike in demand in otherwise mature market sectors.  

At the same time, large quantities of generator sets were shipped to Ukraine to cover for damage to the supply grid.  In 2023, Ukraine was among the top 10 markets in the world with a value of around $300 million.  

Across the wider Europe region, unless the grid faces another risk of severe outages, it's difficult to see the sub-1,500 kVA industry returning to 2023 levels.  The market at these power ratings is likely to level off at around half the 2023 peak and return to the levels of demand typically seen over the last five to ten years.  

In 2024 H1, the Ukraine market has dropped to around $50 million but as winter approaches again, there's now evidence of more market activity.  It's likely the market will reach $150 million by year end, possibly higher.  And at some point in the future, a massive rebuilding program in the country will drive further demand for generator sets over a period of years.    

Asia Pacific

The Asia Pacific region has seen overall growth of 19% in 2024 H1 compared with the same period in 2023.  

Again, strongest growth has been in the higher power bands:

• 34% from 2,001 - 3,000 kVA

• 44% from 3,001 - 4,000 kVA

Although in global terms they are relatively small markets at these power bands, South East Asia and Australia were by far the fastest growing regions in the world.

Below 1,500 kVA the Asia Pacific region has grown 11% in 2024 H1, driven by business fears of utility power shortfalls, particularly in peak summer months.  

2024 Full Year Outlook

Across the entire global diesel generator sets industry, in 2024 we are anticipating growth of around 13% (including annual price inflation of 4%).  

Around 85% of this growth is likely to come from units above 1,500 kVA, most within the 2,001 - 4,000 kVA range.  

Global Market Below 1,500 kVA

At ratings below 1,500 kVA, we're currently expecting the global market to be at best flat with a possibility of a single % digit decline.  

Europe remains a standout region and is likely to decline around 15% across the full year, even with some recovery in the Ukraine market during Q3 and Q4.  North America is likely to see a low single digit decrease.

The rest of the world is likely to be flat with a possibility of a low single digit increase.

Global Market Above 1,500 kVA

Above 1,500 kVA, we are expecting to see full year growth of around 30%, with North America around 40% and Asia Pacific around 35%.  

We're expecting Europe to grow at around 15% (but around 30% in the 2,001 - 4,000 kVA range).