Market: Diesel Genset business set for 7.63% CAGR

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Metro rail projects are a key opportunity for DG sets in the coming years

India’s Diesel Genset Market is project for a growth of 7.63% CAGR during 2018-2028F, driven by demand from growing manufacturing industry and demand for power in construction projects, according to an industry report released 5 Oct 2022.

It was valued at US$905.03 million in 2022, added the report “India Diesel Genset Market, By Rating, By Application, By End User, By Region, Competition, Forecast and Opportunities, 2018- 2028F”.

The Union government, in collaboration with state governments, recently announced a new plan for the Diesel Genset market, it noted.

According to a new initiative presented by the Tamil Nadu government, small and medium-sized enterprises (SMEs) might earn a subsidy of US$6,500 on the entire cost of a 320 KVA power generator. Previously, people who used 125KVA gensets were entitled to this level of subsidy, which was equal to 25% of the total cost of the generator.

The power grid is used to produce electrical power using coal and to distribute electricity to the end-user. However, the grid is being impacted by a coal scarcity, as seen in the year 2021, as well as growing demand from end-users.

The diesel generator is used in highways, metros, trains, and many other infrastructure projects to ensure a constant supply of electricity and uninterrupted operations. For example, DG sets are used in remote area road constructions to provide continuous energy and complete the project on time.

Also, the Indian Railways are planning to install diesel generators to power air conditioners in trains in the coming years.

In addition, metro rail projects are a key opportunity for DG sets in the coming years, with a new metro rail policy on the horizon and every major city in India planning to build a metro rail network. In the event of a power failure, each metro station would require DG sets as a backup.

The requirement for a constant and reliable source of electricity, as well as increased urbanization and industrialization, are propelling the Indian diesel generator market forward, said the report.

However, strict government regulations aimed at decreasing greenhouse gas emissions from diesel generators, as well as the rapid expansion of the renewable energy sector, are impeding the market’s growth and harming the environment, as well as driving up maintenance and operating costs.

On the other hand, firms are now focusing on increasing technological advances in diesel generators, as well as rising energy demand from various end-use sectors, which are likely to provide excellent growth opportunities for leading corporations in the next years.

Companies leading the sector:

Powerica Ltd

Kirloskar Oil Engines Limited

Cummins India Limited

Mahindra Powerol

Jackson Genset

Sudhir Group Ltd.

Ashok Leyland Ltd.

Pioneer Power Service Pvt Ltd

Power Mak Industries LLP

Perfect Generator Technologies Private Limited

Tafe Motors and Tractors Limited