Going for Growth

2024 is set to be another record year for the diesel generator sets industry.  Our current forecast, based on halfyear data and data available for Q3 is around 13% growth in value terms.  

But as with everything, that growth is not shared equally.  

And here are two examples:

• A mid-market independent packager of diesel generator sets, selling mostly units below 1,500 kVA in Europe will probably experience market growth of less than 2% in 2024.  And if they also sell in Africa and Middle East, the position is more or less the same.  A flat year.

• Meanwhile, a premium global OEM, focusing on diesel generator sets for applications between 1,500 and 4,000 kVA will probably  experience market growth of 32% in 2024.  Some regions will be much higher.

One of the benefits of maintaining an industry database over a long period of time is seeing trends and being able to put numbers to them, often at a very detailed level. In this article, we're sharing some of these at a global level.  

1. How growth is split among OEM types.

2. How growth is split in terms of usage of diesel generator sets.

3. How growth is split across power bands.

Usage: All Power Bands > 7.5 kVA

Globally around half of all diesel generator sets sold in 2024 operate for less than 150 hours a year.  Most of these units barely operate at all and when they do, it's for testing every few months.

These barely-used diesel generator sets account for the majority of market growth.  

Compared with 2018, in 2024, units operating for less than 150 hours a year accounted for two thirds of all growth, almost $4.5 billion with a CAGR of 12%.

Usage: Power Bands from 7.5 - 1500 kVA

From 7.5 - 1,500 kVA, while the overall global industry has grown since 2018, with a 5% CAGR, proportionally, usage has remained fairly constant.  

Over the last 5 - 6 years, the slight increase in the opportunity for units operating for less than 150 hours a year has come mostly from North America and, more recently, from Europe.  

Looking at power bands, there is really only one standout.

From 2018 - 2024, the opportunity from 2001 - 4000 kVA has experienced a CAGR of around 20% and accounts for almost 60% of industry growth when 2024 is compared with 2018.  

At these higher ratings, much of the industry (around 80%) is concentrated on a few premium global OEMs, and focused on premium, critical power sectors.  

Meanwhile, other power bands have experienced a 2018 - 24 CAGR of around 5%.

Summary

In a typical year, around the world there are usually several regional events, created by natural forces and by human activity, which drive demand for generator sets. But by far the strongest and most consistent driver of growth has been increasing electrification and digitalization.  

The story told by these numbers is one of growth where the value proposition of diesel generator sets is strong.

Diesel generator sets are less than ideal where they need to operate almost continuously over a sustained period of time.

But they are without equal when immediate power is needed for a short time.  

They start immediately and accept load quickly.  And this makes them ideal for emergency situations or critical standby power applications like data centers, healthcare or critical manufacturing processes.  And many of these happen to be the fastest growing industry sectors.  

And today that means that the market for diesel generator sets is growing most quickly where:

• The utility grid is relatively reliable.

• Usage of the generator set is very low but it's considered essential to offset even a very small risk of power outages.

• The application is critical.