The growth of decentralised renewable energy and the increased dependency on battery storage are the two new challenges the diesel gensets manufactures are facing at present.
The energy landscape of India has taken a leap in the last five years. Though the availability of power has increased in the recent past, India still depends on diesel generators, primarily as power backup. As power shortage was looming around the country, until recently, India had a buoyant diesel gensets market. However, with the advent of the decentralised renewable energy installations, the country has witnessed the scaling down of dependency on diesel generators. Standalone wind and solar-based power generation, they say, are posing a growing concern for diesel gensets. Until the power conditions in India improved, a sizeable number of people who faced power cuts and supply shortages were left with no option but to look at diesel generators as the primary source of energy during the long hours of load-shedding.
Global and domestic scenario
Mordor Intelligence released a report at the beginning of the current year titled, Global diesel generator market-Growth, Trends and Forecast (2018-2023). The report puts a very positive outlook for the diesel gensets. "The massive increase in power consumption in the developing countries, such as China and India, with inadequate power generation capacity and grid infrastructure, is likely to make the steady power supply a serious challenge."
While commercial or residential buildings use diesel gensets as backup power, for a large number of the country's installed telecom towers, it is the primary energy source. In a research study by RNCOS titled, India Diesel Genset Market Outlook 2018 which was released a couple of years ago, anticipated the Indian diesel generator market (up to 100 KVA) to grow at a CAGR of around 11 per cent during 2014-2018. However, the diesel gensets market matrix has changed in the past five years. The market experts reiterate that the demand for high capacity (250 kVA) diesel gensets are on the rise in the wake of large capacity commercial buildings. Interestingly, some of the existing manufacturers have realigned their product portfolio to cater to this segment which appears to be growing faster than the lower capacity generators segment.
Research and Markets in its report India Diesel Genset Market (2018-2023) states that the India diesel genset market is projected to grow at a CAGR of 4.5 per cent during 2018-2023. This is a moderate growth in comparison to the double digit growth registered by the segment till the year 2015.
The Indian gensets market is broadly classified into small, medium and high capacity generators. The sub 100 kVA market (small) was the fastest growing segment till recently. According to TechSci as of 2018, the diesel gensets market in India was majorly dominated by the low and medium voltage diesel gensets, owing to ease off the availability, low cost and increasing adoption of these gensets in a wide range of applications across the country.
A large number of these low capacity generators are used by the telecom operators in the country which accounts for almost 55 per cent of the total market. To curb the carbon foot print, the Telecom Regulatory Authority of India (TRAI) has mandated telecommunications companies to switch from diesel gensets to renewables sources to meet its power requirements. If the switch happens, then it is estimated that the saving would amount to nearly 2 billion litre of diesel per year.
The TRAI also has mandated the telecom companies to increase the proportion of the hybrid powered tower sites to 75 per cent in rural and 33 per cent in urban areas by 2020. Even after such a strict directive from the TRAI, the industry believes that the diesel gensets will continue to be the preferred choice to power the telecom towers.
Owing to the spike in massive construction, smart cities and large size data centres, the large capacity generators that are above 700 kVA segment have also started gaining traction. It is estimated that the size of the gensets above 250 kVA capacity is worth Rs 7 billion and experts believe that this segment will witness an exponential growth in the near future. The most matured technology we see is in the sub-82.5 kVA segment. This segment has registered a growth rate of 5 per cent in the last year. On an average, the diesel gensets segment as a whole grew at 10 per cent in the previous year.
Ramesh Pasarija, former Chairman, Technical Committee, Indian Diesel Engine Manufacturers Association said, "The demand has more or less been stabilised. However, we expect the market to expand as a number of new buildings are being construed with lifts, and there would be a need for power backup. Currently, as different capacity diesel gensets are available in the market, it is still the best backup solution."
Pasarija continued that most of the gensets sold today are purely for emergency purposes. It is also true that the number of hour requirement of the diesel generators have come down. "Instead of the earlier 20,000 hours requirement, the demand now has reduced to 5,000 hours. As a result, the power output per hour is increasing. From a 6 litre genset, the earlier one may have been drawing 125 kVA, but now it gives 175-200 kVA. As a result, generators are becoming smaller, compact and more economical."
According to a research report released by TechSci Research, India Diesel Gensets Market By Rating, By End User, Competition Forecast & Opportunities, 2013-2024 states that the Indian diesel gensets market will surpass USD 1.53 billion by 2024. The report suggests that the growing demand for backup power from manufacturing, residential and commercial sectors, in addition to the rising construction activities due to the increasing number of government-sponsored projects such as AMRUT, 100 smart cities, freight corridors and national highways are expected to be the primary market drivers in the coming years. IndiaÆs electricity consumption registered a year-on-year growth of 5.55 per cent in 2016, while its construction sector is expected to reach USD 1,000 billion by 2025 and emerge as the third largest construction market across the globe.
The two significant obstacles the market experts see are: a) the shift toward gas generators and b) the growth of renewable energy with battery storage. The stringent emission regulations put in by the Central Government as a part of its commitment to mitigate climate change and curb greenhouse gas emissions, the above two definitely are seen as hurdles for the growth of the Indian diesel generator market.
It is more or less clear that the growth in the diesel generator segment is gifting gears from a small capacity to a large capacity product. However, the existing concerns on the shelf life of batteries, the recurring capital cost of replacements every five years or so appears to be positive for the diesel generator markets.
If one goes with the market projections, the diesel generator segment is predicted to expand over 6 per cent by 2024. From slow, to negative and now stabilised or marginally growing, the diesel generators market is experiencing a whirlwind.
- Renjini Varghese
I wish to start pvc / pp electric wire unit in Delhi. What kind of information I can get if I subscribe for your magazine
Pls invite me all auction in gujarat
we are doing business developing for solar power ,thermal power , customer supporting and we have 45 mw splar power on hand needs investors.....
pls call +910842559230