Diesel generators thrive on rising demand from APAC data centers

By : |November 6, 2013 0

SINGAPORE: The Asia-Pacific diesel generator sets market will see steady growth as demand from the rapidly expanding data center industry increases, particularly in Singapore, Malaysia, Philippines, Thailand and Australia.

Data centers typically require diesel generator sets with a capacity of up to 20 megawatts for stand-by power applications and hence, the adoption of large diesel generator sets – falling in the power output capacity segment between 1 MW and 3 MW of the study – is on the rise in the region.

According to new analysis from Frost & Sullivan, Asia-Pacific diesel generator sets market revenues are estimated to grow from $592.4 million in 2012 to reach $801.0 million in 2017. The developing economies of Indonesia, the Philippines and Vietnam will continue to be key markets for diesel generator sets in the region.

Frost & Sullivan Energy and Environmental Research analyst Subha Krishnan said: “Diesel generator sets are predominantly used for back-up purposes in Asia-Pacific, since most countries have well-developed power infrastructure and offer low-cost electricity from the utility grid.”

“Uptake will remain steady as energy-intensive industries such as oil and gas, electronics, semiconductors, textiles, food processing units, automotive, industrial machinery, and petrochemicals, as well as high-rise buildings such as data centers, offices, shopping malls, and condominiums turn to diesel generators to deal with unexpected power outages.”

Although the competitive landscape is unlikely to change significantly during the forecast period, reputed companies might lose their market share to low-cost Chinese brands in the 20-60 kilowatts power output capacity segment of the Asia-Pacific market.

Moreover, the preference for gas generator sets over diesel units in prime and peaking applications may eat into the sale volumes of diesel generator vendors. The easy availability of gas, along with the emphasis on emission reduction in Australia will further promote the use of gas generators over diesel.

“Diesel generator suppliers must offer cost-effective, locally-packaged generator sets with well-known, branded engines to reduce prices and boost sales in the Asia-Pacific diesel generator market. As such, diesel generator sets will continue to enjoy steady demand in the market due to their affordability, ease-of-use and maintenance, as well as the lack of import restrictions on engines,” added Krishnan.

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