UK

A Strong 2023

The UK is consistently in the top 10 global markets for diesel generator sets and in 2023 it ranked 8th by value at around $300 million.

From 2012 to 2019, the market was in a slow decline, followed by a 15% dip in 2020 during Covid-19 lockdowns.  But since 2020, the market has seen average annual growth of close to 20%.

2023 saw overall growth of 27%.  At lower power ratings, this occurred largely over the winter period.  Diesel generator sets were in high demand due to fears of grid outages from potential gas shortages at utility power stations.  

At higher power ratings, above 2,000 kVA, growth in 2023 was almost 50%, mainly from the data center sector.  

The country has a population of around a quarter of a million diesel generator sets.  Most are installed for standby use and operate for only a handful of hours a year.  

There is a well-developed rental sector and diesel generator sets are also common at construction sites.  

Production in the UK

Forty to fifty years ago, production of diesel generator sets in the UK was widely fragmented across a range of small to mid-sized producers.  

The 1980s and 90s saw major consolidation with some global OEMs developing very substantial manufacturing facilities and reaping the benefits of economies of scale with major component suppliers located in-country.  By 2008, UK production accounted for around a quarter of the world's generator sets below 1,500 kVA.  Today that figure is around 4%, with most production of smaller units moved elsewhere. 

The trigger for this realignment of production was the gradual relocation of major component suppliers away from the UK, particularly to China and also to India.  

The benefits of relocating production of smaller generator sets were less to do with labor costs (which are a relatively small part of production costs), but more to do with logistics.  It made no commercial sense to ship major components like engines and alternators around the world to be packaged into generator sets and then ship finished products back around the world to customers. 

Today, below 1,500 kVA most units produced in the UK are assembled by small to mid-sized packagers.  But UK production of larger and more complex units, particularly above 2,000 kVA, has started to grow again.  Most of these are produced by large global OEMs and many are destined for data center customers in the UK or Europe.  

The Future

Like many European markets, the UK had a strong 2023 when, in the face of potential utility power outages, diesel generator sets again proved their value.  In 2024, that risk has subsided and, for products at lower power ratings, the market is likely to be back at 2021 or 2022 levels.

However, demand for reliable, quality power continues to grow, with zero tolerance of power outages.  The data center industry in the UK, although not as super-charged as the US, is a rapidly growing sector for diesel generator sets.

Co-existing with New Power Generation Technology

The construction and rental sectors where usage hours of diesel generator sets are higher and which account for slightly less than 20% of the market below 1,500 kVA, are now showing more sensitivity to carbon footprints.  

Both have shown interest in alternatives to diesel generator sets.  For very short term rental applications, such as events, energy storage systems are often offered now as an alternative.   For longer term rentals, these can be combined with diesel generator sets, for example at construction sites:  the generator set operates during the day when demand for power is highest, and the energy storage system operates at night or off-peak hours when demand is lower.

However, for the foreseeable future, it's not likely that any commercially viable technology will replace diesel generator sets completely in these sectors or others.  They will co-exist with other renewable power generation technology as part of a balanced solution.  Hybrid generator sets and usage of low emissions fuels like HVO will provide the ability to reduce emissions.  

Growth from Critical Applications

At higher power ratings and where the application is more critical, for the foreseeable future it's likely that diesel generator sets will continue to grow almost undisturbed at least through the rest of the 2020s and probably well into the 2030s.