The Europe generator sets market is expected to grow at a CAGR of more than 1% over the period of 2020 - 2025. Factors such as demand for uninterrupted and reliable power supply, backup requirements during power outages, and the longer timeframe required to set up the transmission and distribution infrastructure are expected to drive the generator sets market. However, the higher cost of electricity produced by the generator sets relative to the utility grid is expected to act as a restraint to the market.
- The industrial sector is estimated to be the largest segment of the market in the forecast period owing to the increasing demand for continuous and reliable power supply, reducing the risk of product failure and the rising size of the manufacturing segment.
- The rising popularity of hybrid generators and rising reliability of the hybrid system may be an opportunity for the industry due to its usage of various resources, driving down the cost, and reducing dependence on a single fuel.
- The United Kingdom is expected to be a significant market in the forecast period, with the majority of the demand coming from the industrial sector and rise in commercial office spaces and small-scale enterprises.
Key Market Trends
Industrial Sector to Dominate the Market
- The industrial sector, which includes mining, manufacturing, agriculture, and construction, accounts for a large share of energy consumption of any end-use industry.
- The industrial sector is estimated to account for the largest share of power generation in the diesel and gas generator market. Industrial operations are mainly dependent on electricity generated from generator sets during power outages (to avoid production risks) and in regions where grid access is limited.
- In the European Union, the industrial capacity, such as the manufacturing capacity, has increased significantly by 7.52 % to USD 2.43 Trillion in 2018 from USD 2.259 Trillion in 2017. An increase in the manufacturing sector is expected to increase the requirement of backup generators.
- Europe has been opting for gas as a substitute for coal and oil in the power generation sphere. The strengthening of the gas pipeline infrastructure and storage network across Europe is expected to increase the uptake of gas generators in prime power and backup power applications and dissuade the public and private enterprises from the usage of diesel as the primary backup fuel. Diversifying the fuel is expected to boost the Europe generator sets market.
- Consumption of electricity in the European region increased, by 0.034%, from approximately 2050.0 million tons of oil equivalent (mtoe), in 2017 to nearly 2050.7 mtoe, in 2018. An increase in the rate of consumption is expected to maintain in the forecast period, thereby driving growth in the market.
- Hence, the industrial segment is expected to dominate the Generator sets market in the forecast period due to its extensive usage of the product and the growing size of the sector.
The United Kingdom to be a Significant Market
- The United Kingdom is among the leading generator sets market in the Europe region. This is due to increasing infrastructure projects, expansion of manufacturing facilities across the nation, and rising commercial office spaces. The country benefits from the cost and effectiveness of generators sets, with improvement in the living standards increasing the demand for power backup devices segments.
- United Kingdom’s agriculture sector is vast and covers more than 60% of the country’s total land area. Although the country’s power grid is increasingly becoming dependent on renewable sources, the agriculture industry still relies upon the use of the power back up system. Growth in the agriculture and related industries is expected to positively impact the market.
- Data centers are responsible for between 1-3% of the country’s electricity usage in 2018. The amount of data centers in the United Kingdom is expected to increase in the forecast period, whose backup power generation may be provided by the generator sets and which may act as a driver for the market.
- Consumption of electricity in the United Kingdom decreased, by 0.54%, from approximately 152.7 million tons of oil equivalent (mtoe), in 2017 to nearly 153.5 mtoe, in 2018. An increase in the rate of consumption is expected to maintain in the forecast period, thereby driving growth in the market.
- Gas generators are expected to increase their share of generation capacity in the country due to well established natural gas transmission systems in the country, lower operating costs than diesel generators, and less carbon emission in the atmosphere. An increase in the use of gas generators is expected to aid the market.
- The United Kingdom generator sets market is expected to increase in the forecast period due to the increase in the electricity demand and the rising popularity of gas generators.
The Europe generator sets market is fragmented. Some of the key players in this market include Caterpillar Inc, Mitsubishi Heavy Industries Ltd., Cummins Inc, Yanmar Holdings co. Ltd, and Atlas Copco AB.
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