Generator Rental Market – Snapshot
Having a credible source of power is extremely important for a large number of industries, from oil and gas to food and beverage to dairy industries to others. Industrial equipment cannot run or do any task without constant flow of power supply. The growing significance of power is likely to propel the expansion of the global generator rental market in the years to come.
Maintenance and obtaining of generators is often a reason for worry for those who are into the business of building infrastructure or emergency repairs in the developing nations. Though the ownership of one’s own unit comes with its share of benefits, however, there are situations when rental services of generators become a feasible option.
Augmented Demand from the Construction Industry to Shoot up Demand
The global generator rental market is driven by the demand for an efficient and cost effective generator services in various industries, particularly in oil and gas industries. Oil and gas industry is predicted to exert dominance over the global generator rental market in terms of end user. Huge investment made by several organizations in setting up rental generators at their facilities is likely to drive the demand of the generator rental services.
The benefits of generator rental services are that they are
- Reliable
- Sturdy
- Robust
In addition, expansion of the construction industry needs the services of generators substantially, which is likely to add to the growth of the global generator rental market. These generators need to be extremely powerful to keep the machines up and running for a prolonged period of time. In an attempt to keep the operating cost under control and within the budget, construction industry players are leveraging the benefits of rental services of generators. As such, this will help businesses to spend the excess finances to be spent on other developments.
Power-on-Demand Systems Hold High Value for Stakeholders in Oil & Gas Industry
Stakeholders in the oil & gas industry are pervasively adopting cost reduction strategies to effectively manage their finances. Vendors in the generator rental market are making the most of this shift, and offering rental services for power generation. Since renting equipment is cheaper than outright purchasing, companies in the generator rental space are increasing the availability of power generation and temperature control systems in the oil & gas industry. As such, the oil and gas industry is envisioned for aggressive growth in the generator rental market, with a predicted value of ~US$ 1.3 billion by the end of 2027.
Reduction and control on operating costs is essentially important in the oil & gas industry. Hence, companies in the generator rental market are increasing the efficacy of their power automation systems. For instance, Aggreko – a leader in rent diesel and gas generators, has gained prominence in offering ‘power-on-demand’ systems to cater to these needs of stakeholders in the oil & gas industry.
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High-performance Diesel Generators Prevent Losses during Extensive Power Outages
Innovations in diesel generators are powering growth for the generator rental market. Companies are making progress in the remote monitoring of diesel generators that are integrated with microprocessor-based control panels. By themselves, diesel generators account for the highest revenue in the generator rental market, with an estimated value of ~US$ 3.6 billion by 2027. Hence, vendors are offering diesel generators in various power ratings to cater to the specific needs of stakeholders in factories, data centers, and other end-use industries.
Apart from delivering high-performance generators, companies are increasingly fulfilling end user demand for efficient technical services. They are investing in training programs for employees to make them qualified in handling power crisis situations.
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Fast mobilization and flexibility are a part and parcel of any manufacturing facility. Hence, vendors in the generator rental landscape are increasing the efficacy of generators that offer seamless grid paneling. With all these attributes of advanced generators, end users can prevent any losses on account of power outages by hiring high-performance generators.
Trade Fairs help Manufacturers Provide Tailored Solutions to New Customers
Manufacturers in the generator rental market are participating in trade fairs to position their companies on a global level. For instance, JCB – a British multinational manufacturer of industrial equipment, participated in the Middle East Electricity (MEE) exhibition, to publicise its power generator products.
The Middle East & Africa is projected to dominate the global generator rental market with the highest revenue throughout the forecast period, with an estimated value of ~US$ 1.7 billion by 2027.
There is growing demand for power generators throughout the Middle East. Genset manufacturers are working closely with large contractors and rental companies to provide rental solutions to end users in this high-profit region. Manufacturers in the generator rental landscape are showcasing a broad portfolio of products at trade fairs to strategically position their companies in the global market landscape. They are supplying a variety of engines with generators to suit individual customer requirements. Trade fairs are becoming increasingly popular in the generator rental space, since stakeholders in the landscape get the opportunity to meet new customers and provide tailored solutions to them.
Manufacturers Targeting Profitable Opportunities in Middle East’s Oil & Gas Industry
The generator rental market is consolidated, with only three major players accounting for ~50% of the total market share. This makes it challenging for emerging players to gain market share in the landscape.
Due to various reasons, the global generator rental market is projected to progress at a modest CAGR of ~5% over the period of forecast. For example, power customers in Ketchikan – an Alaskan city, were told by the city’s power utility to reduce their electrical usage. Moreover, the city’s air quality permit prohibits the grouping of too many generators for prolonged hours. Hence, manufacturers in the generator rental ecosystem are tapping into opportunities in the Middle East where the oil & gas industry has created urgent need for high-performance generators.
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Analyst’s Viewpoint
Asia Pacific has the potential for high growth in the global generator rental market. Likewise, unreliable power supply in India has created high need for generator rental services in the region. Manufacturers are developing diesel generators that provide fuel efficiency in a chosen range of operating loads.
Hybrid power generators are attaining increasing popularity as a sustainable solution in the landscape. However, hydropower generation poses a challenge in regions with low water level. Hence, manufacturers should target hydropower generation in regions such as East Asia and Pacific to capitalize on the environmental-friendly trend. They should also increase production capabilities to manufacture natural gas generators, since these generators are projected for high growth in the coming years.
Global Generator Rental Market: Overview
- Generators can be defined as machines that convert mechanical energy into electric energy.
- The generator rental market is a service market, wherein, generators are available on a rental basis for power generation.
- This is an emerging market in developing as well as underdeveloped countries, where power shortages is a major issue.
- The global generator rental market is projected to expand at a CAGR of ~5% over the period of forecast.
Increasing Number of Events across the Globe Drives Generator Rental Market
- With upcoming events such as the FIFA World Cup, Cricket World Cup, Winter Olympics, and Commonwealth Games, a majority of the host countries are expected to make arrangements to adequately fulfill their power requirements. This is expected to drive the demand for rental generators in these countries during the forecast period.
- An increasing number of entertainment shows with minimal disruptions are primarily dependent on backup power solutions being served by rental generators. A growing number of fairs, festivals, carnivals, and unplanned events require continuous power without disruption, which is effectively supplied by power grids supplemented by rental power generators.
- Thus, the rising number of events and continuous power requirements at these events are anticipated to drive the global generator rental market during the forecast period.
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Rising Incidence of Power Outages Provides Opportunities to Global Generator Rental Market
- Power outages are mostly caused due to natural calamities, failure in transmission/distribution lines, and faults in equipment at a power generation station or substation.
- Old power infrastructure, aging supply lines, and frequent incidence of natural calamities in North America are resulting in power failures in the region. This is likely to drive the generator rental market in the region during the forecast period.
- Incidence of power outage reduces industrial output and leads to loss in revenues. Also, it causes discomfort, malfunctioning, and unproductivity in residential, commercial, government, and other facilities. Hence, most consumers prefer generator sets to reduce power demand during peak hours and safeguard their equipment.
- Thus, rising electricity demand and increasing power outages across the globe are expected to boost the global generator rental market during the forecast period.
Stringent Environmental Regulations Restraining Global Generator Rental Market
- Several environmental agencies such as the U.S. EPA (Environmental Protection Agency) have imposed stringent regulations on emissions from diesel-powered generators.
- In 2011, EU Stage-IIIB standards were developed for engines rated with 56 kW. In 2014, Stage-IV standards were developed for engines rated with 56 kW – 130 kW. Both these standards regulate the reduction of particulates and nitrogen oxides, while also regulate the emissions of hydrocarbons and carbon monoxide.
- Moreover, the level of noise produced by diesel-powered generators is much higher than other types of generators. Thus, growing concerns regarding air pollution and noise pollution are likely to act as a major restraining factor for the global generator rental market during the forecast period.
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Expansions, Acquisitions, and New Contracts in Global Generator Rental Market
- In February 2018, Cummins Inc. introduced its latest Tier-4 Final solution i.e. C100D2RE, a 100-kilowatt (kW) mobile generator set for use in rental applications, at the American Rental Association’s Annual Rental Show.
- In August 2017, United Rentals Inc. expanded its power and HVAC fleet by acquiring power equipment assets, primarily mobile rental generator sets, from Cummins Inc. The company would start serving the former rental customers of Cummins, and it has made its newly-acquired rental equipment available immediately.
- In January 2016, Caterpillar Inc. announced the launch of Cat XQ570, the company’s latest rental diesel generator set, in a series of products engineered to meet Tier-4 Final emissions standards. Rated for prime power at 570 kVA or 625 kVA, this mobile generator set is suitable for all markets, and it is designed for greater portability, lower noise levels, and highly efficient voltage changes.
Middle East & Africa Dominates Global Generator Rental Market
- The Middle East & Africa dominated the global generator rental market in 2018. The generator rental market in the region is expected to expand at a significant pace during the forecast period, owing to increasing number of construction projects, growing utilities sector, extreme weather conditions, post-disaster emergencies, and unavailability of power grids in remote locations in the region.
- The generator rental market in Asia Pacific is estimated to expand at the maximum CAGR during the forecast period. Electricity consumption is on the rise in most countries in Asia, such as India, Indonesia, Malaysia, and South Korea. As per the Global Tracking Framework Regional Assessment Report, more than 421 million people in Asia Pacific did not have access to electricity in 2017.
- In terms of revenue, North America and Europe contributed significantly to the global generator rental market in 2018. The Rest of Europe held a major share of the Europe generator rental market in 2018.
- In Europe, the maximum demand for rental generators comes from Germany, followed by the U.K. These countries have large industrial and commercial sectors, which boosts the generator rental market in these countries.
Highly Competitive Global Generator Rental Market
- The global generator rental market is highly fragmented, with the presence of a large number of local, regional, and global players
- Key players operating in the global generator rental market are
- Caterpillar Inc.
- Cummins Inc.
- Generac Holdings Inc.
- Himoinsa S.L.
- AKSA Power Generation
- KOEL Green
- Atlas Copco AB
- Aggreko PLC
- Kohler Co.
- United Rentals, Inc.
- APR Energy
- AGCO Corporation
- Herc Rentals Inc.
- Ashtead Group plc
- Wartsila
- Cooper Equipment Rentals.
