Europe

2024 European Market 7.5 - 1500 kVA

At ratings between 7.5 and 1500 kVA, 2023 had been an exceptional year in Europe for suppliers of diesel generator sets.  Across the region, shortages of natural gas led to fears of electricity outages and drove many businesses and government facilities to buy generator sets.  

And the result was a spike in demand in otherwise mature market sectors, particularly at ratings below 1500 kVA.  This was seen most strongly in central Europe and especially in Germany where some utilities had previously been heavily reliant on natural gas from Russia.  

There was further demand from Ukraine as diesel generator sets were bought to offset damage to the electricity grid.  

2024 was the year when things adjusted back to something near normal.  Overall, the market saw a 12% decline in value (16% excluding price inflation) but the decline was felt most in countries where the growth spike had been strongest in 2023.  Germany and much of central Europe declined around 30%.  

Demand from Ukraine remained strong in 2024, growing again into Q3 and from Q1 - Q3 data we estimate around $250 million with almost all of the market at ratings below 1500 kVA and two thirds below 250 kVA.  It points to a strategy of building resilience through widely distributed power generation, with smaller, more mobile generator sets that are easily moved and concealed.  

2024 European Market > 1500 kVA

Above 1,500 kVA, our 2024 market forecast has around 20% growth, rising to almost 50% at ratings between 2000 and 4000 kVA, where most demand is from data centers.  

This is ahead of the growth rate for new data center construction in Europe, which was around 20% in 2024, and suggests continuing pre-ordering and stockpiling of generator sets by data center operators.  

At ratings between 2000 and 4000 kVA, the European market is 2.5 times larger than in 2019, with an annual growth CAGR of more than 20%.

The market is heavily concentrated in a handful of countries, all of them with strong data center activity:

• More than 50% of the market is accounted for by Germany, UK, Irish Republic, France and Netherlands.

• And in total, the top 10 markets account for more than 80% of the market.

2025 and the Future

In early 2025, forecasting the European market is an unenviable task.  We'll make a first detailed forecast for 2025 around May when there's a firm view of 2024 and also take a longer 5 - 10 year view. 

But for now, our view of the overall Europe market is a flat 2025, with a good possibility of a low single digit decline.  Strong growth at higher power ratings is likely to offset a softening market at lower power ratings.  

From 7.5 - 1500 kVA

At ratings between 7.5 and 1500 kVA, the market decline seen in 2024 was an adjustment back towards more normal levels.  

But in our view, this leaves the European market still at levels well above the historical trendline.  With this in mind, and with some European economies in a fragile state, some further readjustment is likely in 2025.  This may be as much as a double digit decline and focused especially on the countries which saw the most substantial increases in 2023.  

Data Centers

The data center sector continues to grow strongly in Europe and there's every sign of this continuing for the foreseeable future.  We believe it now accounts for around 70% of the market at higher power ratings.  

In 2024, based on Q1 - Q3 data, we believe the market for diesel generator sets between 2000 and 4000 kVA grew by around 50%.  And as we work our way through Q4 market data, we've seen nothing that leads us to believe it will be less than this.  

With a CAGR of more than 20% in the key power bands from 2000 - 4000 kVA, we believe at least 25 - 30% growth is likely in 2025, limited more than anything only by supplier capacity.  

Ukraine

For the foreseeable future, Ukraine is likely to remain a major market for diesel generator sets.  

The electricity grid has suffered severe damage which will require significant investment and time to repair.  Looking more widely, the country will need a rebuilding effort on a scale not seen in Europe since 1945.  And this will unleash massive demand for power generation.