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11/13/2014 | Natural Gas and Diesel Generator Markets to Experience Robust Growth

Earlier this year, Pike Research debuted a report that indicated the market for natural gas generators was going to increase substantially between now and 2018—to as much as $10 billion. “Until recently, the natural gas genset market has experienced steady growth, but a boom in unconventional gas resources and tightening regulations limiting stationary generator emissions point to accelerating growth over the next decade,” said Pike Research Senior Research Analyst Mackinnon Lawrence at the announcement. More recently, research firm IHS published more conservative but still impressive statistics, indicating that the natural gas genset market would experience an 11.9% compound annual growth rate (CAGR) between now and 2018, from $3.1 billion in revenues (2013) to approximately $5.4 billion by 2018.

IHS also made predictions about the diesel generator market, noting that diesel generator sets would experience a more modest growth rate—6.2% CAGR—over the same period. This still leaves diesel generators being the dominant player in the market, with a 71.1% market share of revenue in 2018, as opposed to 75.6% in 2013. In other words, while natural gas generators will make inroads on diesel, they will continue to represent a fraction of the total generator set market, which IHS predicts will grow from just under $16 billion in revenue in 2013 to nearly $23 billion by 2018.

That’s a lot of generators!

Of course, the surveys didn’t break revenues or unit sales down into sub-sets such as portable natural gas generators, portable diesel generators, commercial backup generators, industrial backup generators, or any other power generation category. As a result, it’s difficult for us to say with 100% certainty where all this growth will occur.

With that said, we do know that the oil and gas industry and the emergency backup generator (e.g. standby generators) markets are doing brisk business for generators. We are also seeing a considerable increase in the number of rental companies that are purchasing generators and adding them to their inventories. We predict that in environmentally sensitive areas, urban settings and in oilfields where well-head gas can be recaptured, natural gas generators will experience strong growth. In other environments, for industrial and commercial use, the longer lifespan and reputation of diesel generators will continue to propel their dominance.

On a final note, a third company, TechNavio, published a generator growth report recently, but theirs also touched on what they call “hybrid generators,” what we at HIPOWER call bi-fuel generators. In the press release for the report, Vice President of TechNavio Faisal Ghaus noted, “Hybrid generators offer more cost- and fuel-efficiency than conventional generators, and provide environmental sustainability through minimal greenhouse gas emissions and energy consumption compared with conventionally fueled generators, which will lead to increased uptake of this technology across commercial, industrial and residential sectors in the U.S. over the projected period.”

We sell all three types of generators to a wide variety of customers, and our expert sales team has all the information purchasers need to make the right choice of fuel source, as well as power rating and other important variables. Please call us to discuss your requirements at 913-495-5557 or browse the equipment on our site. While you are there, sign up for myHIPOWER to gain access to extended site benefits.

 

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