PALO ALTO, Calif., March 1, 2004 — The North American large generator set market showed signs of revival in late 2003 and this is likely to translate into a growth spurt in 2004. Participants are keen to cash in on this interim surge by increasing awareness among existing and potential end users about the benefits of on-site power generation.
New analysis from Frost & Sullivan (www.energy.frost.com), North American Large Generator Set Market, reveals that this market generated $1.35 billion as revenue in 2002 and is likely to reach $1.89 billion by 2011.
Several original equipment manufacturers of gensets have reported an increase in orders following the partial economic recovery in the third and fourth quarters of 2003. Projects that were earlier put on hold are being revived, giving further momentum to this short-term market growth.
“The resurgence of usually expensive and large natural-gas fueled unit sales is one of the seminal developments stemming from this renewed market activity,” says Frost & Sullivan Industry Manager Roberta Gamble.
Natural-gas fueled gensets are expected to outpace the sales of diesel gensets once again, reminiscent of the early 1990s trend that was stalled by the onset of economic recession in 2001.
The development of dual-fuel natural gas engines capable of cogeneration and peak shaving, along with their higher efficiency, low fuel costs, and smaller footprints (relative to natural gas-only engines) is also fueling growth.
“Having recognized the advantages of long-running units — for instance, quick ROI — end users are increasingly opting for such gensets,” says Gamble. “This, in turn, is likely to boost revenue flow for genset manufacturers by way of additional services generally required for long-running engines.”
While the industrial end-user segment is showing signs of saturation, the commercial segment — with a mandatory requirement for back-up power to ensure 24×7 availability of information and services — is expected to emerge as the key end-user group for large gensets.
“Growing interest toward combined heat and power (CHP) and power security among commercial end users has helped participants to penetrate this segment, which is showing signs of extensive growth opportunities,” notes the analyst.
Genset manufacturers are also buoyed by the recovery symptoms of the recently deflated telecommunications industry and Internet-related businesses — two of the major commercial sub-segments.
Additionally, the adverse impact on power lines due to the recent earthquake in Central California and the harsh Northeast winter weather, coupled with mounting concerns over homeland security have raised the significance of on-site power among end users. These developments are expected to sustain the demand for large gensets.
“Another round of insufficient grid power supply is likely as early as 2005, boosting short-term sales despite concerns about long-term market prospects,” says Gamble. “In the meantime, the economic revival in progress can only drive genset sales further — probably until 2006 — before reining it into a more moderate growth pace,” she concludes.
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The North American Large Generator Set Market, part of the Energy subscription, examines positive growth trends besides providing unit and revenue forecasts for large generator sets (250 kW to 5 MW). The research also offers insightful analyses on fuel trends, applications, and end-user groups (industrial, commercial, institutional, and residential) for the same category of generators. Summaries and interviews are available to the press.
Frost & Sullivan, an international growth consultancy, has been supporting clients’ expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes customized strategic consulting, market intelligence, and management training. Our mission is to forge partnerships with our clients’ management teams to deliver market insights, create value, and drive growth through innovative approaches. Frost & Sullivan’s network of consultants, industry experts, corporate trainers, and support staff spans the globe with offices in every major country. North American Large Generator Set Market A495