Rising Installation of Data Centers Creating High Demand for Diesel Gensets

The consumption and creation of data these days has risen significantly. This can be ascribed to the growing focus towards digitalization, increasing use of cloud solutions, rising penetration of internet and social media, and surging adoption of smartphones. In addition to this, the increasing adoption of advanced technologies, including IoT, intelligent personal assistants, and digital currencies, is also leading to the high consumption and generation of data, which needs to be stored efficiently.

Attributed to this, the demand for data centers for analyzing, collating, and supplying services has increased considerably all over the world. This, in turn, is resulting in the growth of the global diesel genset market. These devices fulfill prime and auxiliary energy needs at facilities such as data centers. A diesel generator set comprises a diesel engine that works in conjunction with an electric generators for producing electricity. As the name suggests, diesel is used as fuel in these machines, and the energy generated can serve as both backup and prime power.

Diesel gensets are also being widely used in African countries, including Ghana and Nigeria, where the electricity and power ecosystem are underdeveloped. The nations face substantial volume of power transmission losses and high-value base power deficit, thereby creating the need for alternate power sources, including diesel gensets. Since these machines will serve as off-grid solutions, they can lessen the gap between demand and supply. The load on electricity grids will also be lessened if diesel gensets are incorporated in the power ecosystem.

The diesel genset market is predicted to generate a revenue of $17,821.3 million by 2024, rising from $12,656.2 million in 2018, progressing at a 5.8% CAGR during the forecast period (2019–2024). On the basis of application, the market is categorized into residential, commercial, and industrial, out of which, the commercial category held the major share of the market in the past, both in terms of value and volume. The category is further predicted to advance at the fastest pace during the forecast period.

Diesel gensets are being used extensively in data centers and commercial buildings for both prime and backup power needs. The swift urbanization in emerging economies, increasing number of smart city projects, and rising installation of data centers are driving the demand for diesel gensets. The category is further divided into hotels, telecom towers, retail establishments, hospitals, commercial offices, and others, among which, commercial offices accounted for significant share of the market in 2018.

When power rating is taken into consideration, the diesel genset market is divided into 5 kVA–75 kVA, 76 kVA–375 kVA, 376 kVA–750 kVA, and Above 750 kVA. Among these, the 5 kVA–75 kVA division dominated the market in the past, as these gensets are used widely in applications areas that have low-power requirements. These demand for these machines is being driven by the absence of proper power infrastructure in emerging economies.

Hence, the market is registering growth due to the rising consumption and creation of data and incompetent power ecosystem in African countries.