Europe Diesel Generator Market - Growth, Trends and Forecasts (2023 - 2028)

The Europe Diesel Generator Market is expected to grow at a CAGR of more than 4% over the period.

COVID-19 negatively impacted the market in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the medium term, the demand for diesel generators in standby applications, which are necessary for many sectors such as industrial, construction and medical, and off-grid applications, is expected to drive the market during the forecast period.
• On the other hand, the increasing deployment of renewables as an alternative power source in both on-grid and off-grid applications is expected to restrain the market growth during the forecast period.
• Nevertheless, with the increasing shift towards renewable energy sources, European consumers are looking for efficient and environmentally safe options such as hybrid diesel gensets incorporating renewable sources like solar. This, in turn, is expected to create a significant amount of opportunity for the players involved in the market in the near future.
• The United Kingdom dominates the market and is also likely to witness the highest CAGR during the forecast period. This growth is attributed to the increasing demand across the nation and rising commercial office spaces and small-scale vendors.

Europe Diesel Generator Market Trends

Industrial Sector to Dominate the Market

• The industrial sector, which includes mining, manufacturing, agriculture, and construction, accounts for the largest share of energy consumption, accounting for more than 50% during the forecast period.
• The industrial sector, which includes mining, manufacturing, agriculture, and construction, accounts for the largest share of energy consumption of any end user. Therefore, the increasing demand for continuous and reliable power supply from these industries, especially from healthcare facilities, pharmaceutical industries, and manufacturing facilities, is expected to escalate the demand for diesel generators.
• Therefore, the increasing demand for continuous and reliable power supply in industries like pharmaceutical and manufacturing facilities is expected to escalate the demand for diesel generators.​ Industrial operations mainly depend on electricity generated from diesel generators during power outages (to avoid operation downtime) and in regions with limited grid access.
• As of 2021, Europe is the second largest producer of steel in the world after China. In 2021, its output was over 308.5 million tonnes of steel annually, accounting for 16.3% of global output and mostly coming from Germany at 40.1 Metric tons. The steel industry is a major consumer of power and requires a large amount of reliable energy for steel manufacturing. Many countries like Germany still use diesel generators for the steel industry, which act as a backbone for the country's development work.
• The United Kingdom and Russia are expected to witness industrial growth in the coming years because of the sharp increase in manufacturing sectors, which is expected to drive the demand for diesel generators in the industrial sector.
• Furthermore, government initiatives to expand the industrial sector, especially in the United Kingdom and Turkey, are expected to propel the demand for diesel generators over the forecast period.

The United Kingdom to Dominate the Market

• The United Kingdom is one of the most developed countries in the world. It is also one of the most industrialized countries among the European region with ever increasing demand for energy. With increasing demand for energy, there is also an increasing need for uninterrupted power supply among various sectors of the economy.​
• The United Kingdom's national grid requires power back up source that can be used when there is a peak demand. The National Grid Electricity Transmission (NGET) has been using Diesel generators (DG) sets to accommodate this peak demand and provide backup power to substations for key activities such as cooling fans, pumps, and lighting, enabling it to continue to perform its crucial role in the electricity transmission system.​
• Backup generators are used at over 250 NGET sites across England and Wales, the majority of which are diesel powered. These systems provide NGET with the resilience to recover from a loss of power supply event.
• The country benefits from the cost and effectiveness of diesel generators, with improved living standards increasing the demand for power back-up devices segments. There are various sectors such as agriculture, telecommunication, construction etc., within the United Kingdom that have generators being utilized on a regular basis.
• The construction activity around the country has been increasing in the past few months. The construction output increased by 1.1% in volume terms in January 2022 and is at its highest level since September 2019; this follows an increase of 2.0% in December 2021 and is the third consecutive monthly growth greater than 1.0%.
• United Kingdom's agriculture sector is large and covers more than 60% of the country's total land area. Although the country's power grid is increasingly becoming dependent on renewable sources, the agriculture industry is more interested in the power back up system. It is becoming more dependent on diesel generator systems and driving the market.
• Around 40 to 50% of the data centers in Europe are present in the United kingdom and consume a significant amount of power. Datacenter uses the diesel generator to meet electricity demand during a power cut.
• The country is expected to witness more data centres in the coming years increasing the demand for the diesel generator.

Europe Diesel Generator Market Competitor Analysis

The Europe Diesel Generator Market is moderately fragmented in nature. Some of the major players in the market (not in particular order) include Caterpillar Inc, Mitsubishi Heavy Industries Engine & Turbocharger Ltd., FG Wilson Engineering (Dublin) Ltd, Cummins Inc, and Yanmar Holdings co. Ltd.

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