How Diesel Generator Sets are Used
A world of difference
October 2023
If you’re a producer or distributor of generator sets, insight into operating hours is important, with the answer strongly influencing how products are designed and supported.
At Parkinson Associates, we’ve taken a close look at usage of diesel generator sets around the world, with some interesting findings.
A Global View of Generator Set Usage
The term “standby” is often applied to diesel generator sets, but it’s a vague descriptor. One person’s idea of standby usage might be 50 hours or less a year while someone else in another part of the world might see it as two or three hours a day, adding to 1,000 hours a year or more.
If you’re a producer or distributor of generator sets, it’s an important question, with the answer strongly influencing how products are designed and supported.
Globally around 60% of generator sets fall within a standard definition of 500 hours. However, a different picture emerges across the regions.
The graphic below splits the world into countries which are predominantly either lower or higher hours standby usage.
Annual Usage of Diesel Generator Sets Globally (hours)
Generator Set Usage
Global Population of Diesel Generator Sets
Low Hours Standby Regions
Low hours standby regions, where annual usage is predominantly below 500 hours, together account for around 70% of the total global population of diesel generator sets, just under 6 million units from a total global population of slightly more than 8 million.
Among these regions where typical annual usage is lowest, North America, Europe and China account for two thirds of the population of diesel generator sets.
Despite some severe publicized outages in China during 2021 and 22, resulting in a booming market for diesel generator sets, at its core, China remains a low hours standby market.
In low hours standby regions, many generator sets operate for little more than test hours and it's common for units to see annual operating hours of less than 25 hours. The purchase of a generator set is often driven by legislation or to avoid costs or risks associated with power outages. Many generator sets are bought for risk mitigation, “just in case”, with a possibility that they will see valuable use at some point.
Healthcare, banking, data centers and critical production processes are key sectors.
In cases where there is higher usage in these regions, it's usually in rental and construction sectors and also power-intensive industries such as mining or oil & gas exploration in remote regions, where generator sets often operate for prime power.
Annual Usage of Diesel Generator Sets in Low Hours Standby Regions (Hours)
Chart represents usage in low hours standby regions only
In low hours standby regions, critical applications such as data centers are key market sectors
High Hours Standby Regions
High hours standby regions, where annual usage is predominantly more than 500 hours, account for around 30% of the global population of diesel generator sets and most (75%) of this is found in India and Africa.
A common denominator across these regions is demand for electricity far outstripping supply, often combined with long-term underinvestment in grid generation and transmission & distribution.
Lagos, Nigeria: 70% of businesses in Nigeria own a diesel generator set and typical annual outages in the country are more than 4,000 hours.
In many of these regions, particularly in parts of Africa or the Middle East, it's not unusual for generator sets to operate two or three hours a day every day. In extreme cases, for example in Lebanon, many generator sets operate almost continually.
Brands of both generator sets and engines are often well known. There is a strong and profitable market for parts and service and most major brands have well-established distribution networks to support customers, who are usually businesses.
In most regions, there's a thriving market for will-fit parts, supported by a large number of independent service agents.
Annual Usage of Diesel Generator Sets in High Hours Standby Regions (Hours)
Chart represents usage in high hours standby regions only
What the Future Holds
The way diesel generator sets are used and the commercial environment in which they operate are likely to play a key role in how they are placed in the industry over the next decade and beyond.
Through the 2020s and into the 2030s, diesel generator sets are likely to continue to co-exist with emerging power generation and energy storage technology and we see the global industry growing healthily at just under 4% a year (excluding inflation) to the end of the decade, with highest growth in power bands above 1,500 kVA.
Towards the end of the decade, the outlook is more mixed. As the cost of energy storage falls, in low hours standby markets, where generator set usage is very light and infrequent, expect to see commercially viable alternatives emerging, particularly at lower power ratings.
Legislation and public opinion are also likely to play a role. In high hours standby markets, particularly example in regions where there are regular outages or three or four hours a day, for the rest of the 2020s and well into the 2030s and perhaps beyond, diesel generator sets are likely to continue playing a strong role.
Diesel generator sets are likely to continue to co-exist with emerging power generation and energy storage technology
Insights on Opportunity for Producers of Diesel Generator Sets
To find out more about this study, contact us at at enquiries@parkinsonassociates.com
Parkinson Associates publish an opportunity database, Genstat, available quarterly and annually, for diesel generator sets, split by 12 power bands for every country. Click here to find out more.
To find out more about our research in the diesel generator set industry, click here
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Usage Oct 23.pdf