Market Trends of North America Diesel Generator Industry
Industrial Sector is to Dominate the Market
- The industrial sector is most likely to dominate the market for diesel generators. During power outages, i.e., to prevent production risks and in places where grid connectivity is limited, industrial operations depend heavily on electricity generated by diesel generators. As of 2021, the primary consumption in North America was about 113.70 exajoules, which was around 4% higher than in 2020 (108.79 exajoules).
- The rapid development of new industries and the increasing number of power outages due to natural calamities like hurricanes are considered significant factors that are driving the North American diesel generator market's growth.
- Various industrial activities, such as mining, oil and gas exploration, and railways, require heavy-duty generators for operation. The growing number of applications in various industries is also expected to drive the market.
- Though diesel is more expensive than gas, it has a higher energy density, so more energy can be extracted from the same fuel. Diesel is less flammable than gas and other fuels, making it safer to store and handle.
- Moreover, diesel generators are more reliable, and the initialization of diesel generator sets is more economical than that of gas generator sets. Due to the ease of transportation and storage of diesel, easy on-site fuel availability has also made diesel generator sets more popular than gas generator sets.
- Due to a sharp rise in manufacturing, the United States and Canada are expected to have a lot of industrial growth in the next few years. This is expected to drive the demand for diesel generators in the industrial sector during the forecast period.
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The United States is Expected to Dominate in the Market
- The United States is the leading generator sets market in the North American region due to the increasing number of infrastructure projects, widening power demand-supply gap, expansion of manufacturing facilities across the nation, and rising commercial office space. The country benefits from the cost and effectiveness of diesel generators, with improved living standards increasing the demand for power backup devices.
- In addition, the rapid growth in various end-use sectors, such as infrastructure, telecommunications, information technology (IT), and IT-enabled services, is expected to spur the demand for generator sets in the United States. For instance, in April 2022, Google announced it would invest around USD 9.5 billion in new offices and data centers in the United States by the end of 2022. Such investments are likely to increase demand for generator sets during the forecast period.
- Moreover, the rising oil and gas exploration activities in the United States are expected to boost the demand for diesel generators as the major oil and gas drilling and production processes are operated in remote areas where little or no power utility is available. Hence, diesel generators are required for proper operations in the oil and gas sector.
- According to the BP Statistical Review of World Energy 2022, oil production in the United States had an annual growth rate of 0.9%. Since the last decade, the country has registered a growth rate of 7.7%. The total amount of crude oil produced in the United States was 16,585 thousand barrels per day in 2021. The United States held an 18.5 percent share in global crude oil production in 2021.
- Furthermore, the use of diesel generators as critical power generation sources has significantly increased in recent years. According to the National Weather Service, the weather pattern in the country has changed in the past few years, contributing to the turbulent hurricanes. Hurricanes produce extremely high and dangerous winds, lightning, hail, and massive flooding. As a result, the demand for backup power diesel generators in the country is increasing.
- Therefore, as per the abovementioned points, the demand for diesel generators is estimated to increase in the United States during the forecasted period.
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