Faster growth in industrialisation and commercialisation coupled with power demand-supply gap is fuelling the growth of global gas genset market. Ravi Bhandari elaborates on the market trend...

The global gas genset market is experiencing a steady growth owing to electricity demand supply gap, need to generate power from cleaner source of energy, infrastructure development and a much faster growth in industrialisation and commercialisation sector. The instability in the present power infrastructure throughout the world, including advanced economies such as the US and Europe along with developing economies such as China and India are fostering the growth for global gas genset market.

Global gas gensets market revenues were $3.8 billion by 2015 and further the market revenues are projected to grow at a CAGR of 9.53 per cent during 2016-22. Low prices of natural gas in comparison to crude oil would encourage end users to opt for natural gas gensets over diesel or gasoline gensets in the years to come. Amongst all the regions, APAC regions accounts for the highest revenue share followed by North America and Europe.

Growing concern over energy deficit is becoming clearly evident in several countries across the world. Surge in natural gas production owing to discovery of new oil and gas fields along with boom in shale gas due to technological advancement has resulted into reduced natural gas prices.

In North America, freely available natural gas from oil and gas fields is consumed for running gas gensets, for producing power, which eliminates the fuel cost required for running gensets. High rate of commercialisation and industrialisation has resulted into increased electricity demand supply gap globally. With the expansion of gas pipeline infrastructure, independent power producers are opting for gas-based gensets to cater the electricity demand supply gap.

Globally, Asia-Pacific has the largest gas genset market accounting for 41.5 per cent revenue share in 2015. China and India are the largest markets for gas gensets in Asia Pacific region. Gas genset market is registering robust growth in China, Bangladesh, South Korea, Myanmar, Thailand and Malaysia due to poor grid infrastructure. Government regulations to limit emission of harmful elements caused by diesel gensets have also contributed to the growth of gas genset market in Asia Pacific region. Large manufacturing base of China and high industrialisation growth in India are prime factors responsible for such high demand for gas gensets amongst power producers.

Poor grid infrastructure and the need for uninterrupted power supply in remote areas are two key reasons for the growth of gas gensets globally. Increasing electricity consumption across various industries, which on one hand is leading to a shortage of energy and on the other, giving rise to the need for uninterrupted power supply. Global gas genset market is currently experiencing steady growth owing to growing demand for power across several verticals. Population growth and urbanisation has led to power deficit in many countries. Hence, power producers are adopting gas gensets to ensure uninterrupted supply of power. The increasing demand for power from developing countries such as MEA region, APAC region and Eastern Europe is fostering high demand for gas gensets. Moreover, rising environmental concern over increasing level of pollution and implementation of stringent emission standards are strong market drivers.

The author is Analyst of Power and Energy at 6Wresearch.