Diesel Gensets Market in GCC to Grow by USD 310.45 Million (2024-2028), Boosted by Low Operating Costs and AI-Driven Market Transformation – Technavio

NEW YORK, Dec. 10, 2024 /PRNewswire/ — Report with the AI impact on market trends – The diesel gensets market in GCC size is estimated to grow by USD 310.45 million from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of over 5.56%  during the forecast period. Low operating costs of diesel gensets is driving market growth, with a trend towards incorporation of remote monitoring systems in diesel gensets. However, growing demand for alternative backup power equipment  poses a challenge. Key market players include Atlas Copco AB, Briggs and Stratton LLC, Caterpillar Inc., Cummins Inc., Deere and Co., Generac Holdings Inc., HD Hyundai Co. Ltd., J C Bamford Excavators Ltd., Jubaili Bros, Kirloskar Oil Engines Ltd., Kohler Co., Mahindra and Mahindra Ltd., Mitsubishi Heavy Industries Ltd., Rolls Royce Holdings Plc, Siemens AG, Wacker Neuson SE, and Yanmar Holdings Co. Ltd..

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Market Driver

The Diesel Gensets market in the GCC region is witnessing significant growth due to the unreliable grid power and extreme climatic conditions. Industrial sectors, data centers, hospitals, construction sites, and remote areas are major consumers of generator sets, which convert mechanical energy from a diesel engine into electrical energy. Diesel fuel is the primary choice for these gensets due to its availability and energy density. Power outages and voltage fluctuations are common issues, making backup power sources essential for businesses and critical infrastructure. The market caters to various sectors including commercial establishments, oil reserves, petrochemical industries, and military and defense. Durability, fuel efficiency, and consistent power supply are key considerations for buyers. Sandstorms and supply chain disruptions pose challenges, making backup power solutions a strategic priority. Emissions regulations, fuel prices, and environmental issues are also influencing the market, with alternative power sources like natural gas, renewable energy, and hybrid systems gaining popularity. Digital technologies, such as the Internet of Things, are also transforming the industry. The peak load and industrial segments are major contributors, with renewable energy projects and stricter emissions standards driving innovation. 

The Diesel Gensets market in the GCC region is witnessing significant growth due to the increasing demand for reliable power solutions. Vendors are focusing on advanced technologies, such as remote asset monitoring, to enhance the performance and efficiency of gensets. Leveraging the Internet of Things (IoT), these monitoring systems collect real-time data on fuel consumption, performance metrics, operating conditions, and maintenance requirements. Caterpillar Inc. Recently announced the inclusion of Cat Connect Remote Asset Monitoring (RAM) on small- and medium-sized diesel generator sets at no extra cost to customers, demonstrating the industry’s commitment to innovation and customer value. 

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 Market Challenges

•         The Diesel Gensets market in the GCC region faces several challenges in industrial sectors due to unreliable grid power and extreme climatic conditions. Generator sets, consisting of a diesel engine and alternator, convert mechanical energy into electrical energy, serving as crucial backup power sources for various sectors. These include data centers, hospitals, construction sites, and remote areas, where consistent power supply is essential. Power outages and voltage fluctuations impact businesses, particularly in the telecommunications industry, commercial establishments such as shopping malls, hotels, and office complexes, and critical sectors like healthcare and finance. The strategic importance of reliable power backup is further emphasized in sectors like military and defense. Diesel gensets must be durable and fuel-efficient to withstand sandstorms and harsh desert conditions. They must also handle heavy loads and have high energy density. However, diesel fuel supply and price fluctuations pose challenges. Environmental issues, including air pollution and greenhouse gas emissions, necessitate stricter emissions standards. Alternative power sources like natural gas, renewable energy, and hybrid systems are gaining popularity. Digital technologies like the Internet of Things and 5G connectivity are also transforming power generation and consumption. The Peak Load and Industrial segments are significant markets for diesel gensets, with renewable energy projects and stricter emissions standards driving the demand for hybrid solutions. Residential, commercial, and industrial buildings, retail stores, office spaces, manufacturing, power generation, gas stations, commercial buildings, shops, healthcare facilities, hospitality units, construction companies, hyperscale cloud providers, edge computing, and e-commerce are key sectors for diesel gensets.

•         The diesel gensets market in the GCC is experiencing competition from alternative backup power equipment. These new solutions, consisting of large batteries with in-built inverters, are gaining traction. While they have been in the market for some time, their recent popularity is threatening the growth of the diesel gensets market, particularly portable ones. Advanced battery technology allows for compact, powerful units that generate sufficient AC voltage for household appliances. The emergence of these alternatives is a development that market players must closely monitor.

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Segment Overview 

This diesel gensets market in gcc report extensively covers market segmentation by  

1. Product 
• 1.1 Stationery diesel gensets
• 1.2 Portable diesel gensets
2. Application 
• 2.1 Residential
• 2.2 Commercial
• 2.3 Industrial
3. Geography 

1.1 Stationery diesel gensets-  The Stationary Diesel Gensets market in the GCC is segmented into three categories based on output power capacity: below 300 kW, 301 kW to 1 MW, and above 1 MW. Low-capacity stationary diesel gensets are popular in residential apartments, commercial spaces, and small-scale industries due to their affordability and suitability for short-term power requirements. These gensets are less expensive but require more space. On the other hand, high-capacity stationary diesel gensets are ideal for utility, construction, mining, agriculture, oil and gas, petrochemical, data centers, telecommunication, manufacturing, mining, automotive, and other industries. These gensets are rugged and reliable, making them suitable for standby power sources. The GCC’s rapid industrial and infrastructure development makes it a significant market for stationary diesel gensets. With abundant oil reserves, GCC countries present a lucrative opportunity for genset vendors. Currently, the stationary diesel gensets segment dominates the diesel gensets market in the GCC. Factors like the expanding IT/ITeS and automotive manufacturing sectors, and public infrastructure development, are positively influencing market growth. Among the six GCC countries, Saudi Arabia leads the stationary diesel gensets market. While the current demand is primarily for gensets below 300 kW, it is projected to shift towards gensets with a capacity of above 1 MW as the region evolves into a dynamic industrial and commercial hub. Therefore, the stationary diesel gensets segment is expected to witness moderate growth during the forecast period.

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Research Analysis

The Diesel Gensets market in the GCC region is witnessing significant growth due to the unreliable grid power and extreme climatic conditions. Generator sets, comprising of a diesel engine, alternator, and mechanical energy conversion system, provide reliable backup power sources for various industrial sectors, data centers, telecommunications industry, commercial buildings, shops, hospitality units, construction companies, and hyperscale cloud providers. Diesel gensets are essential for powering heavy machinery and ensuring uninterrupted electricity supply during voltage fluctuations. The agriculture sector and rural electrification projects also benefit from diesel gensets. With the increasing demand for reliable power supply, the market is expected to grow further, driven by the expansion of the telecommunications industry, e-commerce, edge computing, and the rollout of 5G connectivity.

Market Research Overview

The Diesel Gensets Market in the GCC region is driven by the industrial sectors’ need for reliable power sources due to unreliable grid power and extreme climatic conditions. Generator sets, comprising a diesel engine and an alternator, convert mechanical energy into electrical energy, serving as backup power sources for various sectors. These include data centers, hospitals, construction sites, remote areas, and emergency backup systems. Power outages are common in the region, making diesel gensets strategically important for uninterrupted services in commercial establishments like shopping malls, hotels, and office complexes. The durability and fuel efficiency of diesel gensets make them a preferred choice in the region’s harsh conditions. The market caters to various segments, including industrial, peak load, and residential, with stationary and portable options available. Factors like voltage fluctuations, heavy machinery usage, and the importance of telecommunications and agriculture sectors further boost the market. However, environmental issues, such as air pollution and greenhouse gas emissions, and fuel prices are challenges that the market must address through stricter emissions standards, alternative power sources like natural gas and renewable energy, and hybrid solutions. Digital technologies like the Internet of Things and 5G connectivity are also transforming the market.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Product

• Stationery Diesel Gensets
• Portable Diesel Gensets

• Residential
• Commercial
• Industrial

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio