The surge in electricity consumption in China is likely to trigger the demand for Chinese generator set market in the country over the years. The expansion of service, agriculture and industrial sectors are primarily responsible for increasing power use and demand for gen-set.
According to National Energy Administration (NEA) of the country, China consumed a total of 4.7 trillion-kilowatt hours electricity in past nine months of this fiscal year—up almost by 7% year-on-year.
Of the total electricity consumed, the use of power in service and agriculture sectors surged by 10.5% and slightly less than 8% respectively, during the period. Industrial sector, on the other hand, witnessed an increase of 6% in the same time frame.
Besides rise in demand for electricity, unpredictable power outages and stringent clean energy policies are also driving the demand for generator sets in the country. At a Compound Annual Growth Rate (CAGR) of 8.5%, it (Chinese generator set market) is expected to reach US $8.3 billion from over US $5.5 billion by the end of 2021.
The power outage is predicted to be high throughout the period leading up to 2021—whereas power demand is estimated to be high till mid-term that is 2020.
Both of these factors—power outage and power demand—will push the demand for diesel generator sets in the country. This is reinforced by:
- The downward spiraling price trend of fuel, diesel
- The limitation in the availability of natural gas due to which costumers are diverted towards diesel backup set than generators operating on natural gas
- Investment in diesel generators is more reliable for data centers and telecommunication service providers as it (diesel generators) ensures strong backup power at the time of natural disasters and China is prone to different types of natural disasters like flood, tremor, etc.
However, Chinese government’s strong initiation to lower emission and its agenda on increasing the use of natural gas in the energy mix will significantly accelerate the market of gas generators, too.
Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at firstname.lastname@example.org
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at email@example.com | +603 6204 5830