Indonesia Diesel Genset Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Indonesia Diesel Genset Market Analysis

The Indonesian diesel genset market generated revenue of USD 382.7 million in 2023, which is expected to witness a CAGR of 4.9% during 2024–2030, to reach USD 530.0 million by 2030. This is primarily due to the growth in the industrial and construction sectors, high incidence of power outages, and boom of the telecom sector.

Further, the Government of Indonesia is investing approximately USD 412 billion in infrastructure. For the Jakarta Propertindo project, 10 hectares of land will be acquired, and residential units will be constructed in 68% of this area, under the National Medium-Term Development Plan (2020–2024).

Moreover, due to the growing industrial sector, the market for diesel gensets in Indonesia would showcase promising growth during the forecast period (2024–2030). The government’s infrastructure drive and Making Indonesia 4.0 plan are having a positive influence on the industry in terms of the input demand for steel projects.

Further, according to the Indonesian Iron and Steel Industry Association, domestic steel consumption is projected to reach 22.7 million tons in 2024, which marks an increase of more than 50% over 2018. This indicates that the installation of diesel gensets at iron and steel plants will elevate to meet the rising domestic and international demand for steel in the coming years.

Indonesia Diesel Genset Market Trends & Drivers

Rise in Demand for High-Power-Rating Diesel Gensets

• In Indonesia, the high-power-rating diesel genset market is projected to grow steadily in the foreseeable future on account of the expansion of the industrial sector, rising number of small and medium-sized businesses (SMEs), as well as the development of social infrastructure in various regions.
• For instance, according to the Ministry of Finance of the Republic of Indonesia (Kementerian Keuangan Republik Indonesia), in January 2021, the manufacturing sector of the country grew by nearly 4% from the previous year.
• Moreover, according to the World Economic Forum, in 2021, there were over 62 million SMEs in the country, which equals one for every five Indonesians. Of these, 98.75% (61.5 million) were micro-enterprises.
• Additionally, the rising population has been one of the major reasons for the growing demand for these gensets, due to which the major players are launching higher-power-rating variants.
• For instance, in June 2021, KOHLER Co. introduced the KOHLER eFRAME industrial generator enclosures for data centers. The eFRAME walk-in enclosure, which houses the KOHLER KD series of industrial generators rated at 2,000 kW and above, is available in three configurations: V12 (2,000 kW–2,500 kW), V16 (2,800 kW–3,250 kW), and V20 (3,500 kW–4,000 kW).

Growth in Telecom Sector is a Major Driving Force for Market

• The Government of Indonesia has taken significant steps to speed up 5G rollout, including 5G infrastructure development and open-partnership opportunities with the private sector. Under the strategic plan for 2022–2024, the Ministry of Communication and Informatics (MCI) is focusing on 5G infrastructure development in six provincial capitals on Java Island, five tourist destinations (in Nusa Tenggara, North Sumatera, North Sulawesi, and Central Java provinces), the new capital city of Indonesia, and the manufacturing industry. Such projects aim at eliminating the issues experienced with 4G networks. The project would eventually provide flexible technology to develop more radiofrequency spectra, to facilitate faster connectivity.
• Moreover, according to the World Bank, 319.43 million people in the country had mobile cellular subscriptions in 2018, and this number increased to 365.87 million in 2021. By 2025, Indonesia is projected to be the largest digital economy in Southeast Asia, with a transaction value of USD 130 billion. E-commerce transactions in Indonesia amounted to USD 30.5 billion in 2022, a hike of 62% year on year (YoY). Further, due to the growing number of SMEs with an online presence, the telecom industry of the country is poised for rapid growth.
• Further, telecom companies are focusing on penetrating the rural areas of the country. Telecom tower operators widely use diesel generators to deal with power outages, the frequency of which is rather high in the country, due to which the diesel generator market is expected to grow considerably in the forthcoming years.

Growing Demand for Generators Based on Alternative Fuels

• A significant number of people in eastern Indonesia do not have a grid-based power supply; therefore, they keep gensets in their homes. As a result, diesel generators are widely popular in households, construction sites, and office buildings.
• Diesel gensets release harmful gases in the air, which harms health. Due to this, people prefer to use natural gas as a fuel in these machines.
• As per the WHO, air pollution shortens the average Indonesian’s life expectancy by two years. Moreover, 91% of Indonesia’s 268 million people live in areas where the annual average PM level exceeds the WHO limit.
• Thus, in recent years, generators running on alternative fuels have gained widespread popularity due to the strong focus on curbing the air pollution caused by diesel generators. Generators that work with the help of alternative fuels do not lead to such harmful effects, such as cancer and lung diseases.
• Diesel gensets are reliable and inexpensive, but noisy and messy. Whereas, natural gas variants are expensive, but quieter and cleaner. Due to these factors, individuals are switching to this fuel from diesel, which is hindering the market growth. One of the biggest advantages of natural gas is that it burns more cleanly than diesel. In addition, the shortened engine life from wet stacking, inadequate maintenance, and other common DG issues can negatively impact the reduction of emissions even more.

In-Depth Segmentation Analysis

Power Rating Insights

• The market for above-750kVA diesel gensets is expected to progress with more than around 5.3% CAGR during the forecast period, in terms of revenue. This will be majorly due to the increasing demand for them for heavy-duty applications across different industries, such as oil & gas, mining, manufacturing, and construction.
• The 5 kVA–75 kVA category dominated the market during the historical period (2017–2023), in terms of volume. Further, it is expected to retain its dominance during the forecast period. This can be mainly attributed to the low price of these gensets and their high demand in residential facilities, telecom towers, small industries, commercial complexes, restaurants, and hotels.
• Furthermore, telecom towers account for a significant share in the net volume demand for these gensets in Indonesia. Diesel gensets are widely deployed in telecom towers to serve prime and auxiliary power requirements.

During the study, we have analyzed the following power ratings in the report:

• 5 kVA–75 kVA
• 76 kVA–375 kVA (Largest Category in terms of Revenue)
• 376 kVA–750 kVA
• Above 750 kVA (Fastest-Growing Category in terms of Revenue)

Application Analysis

• In terms of value, the residential sector held around 50% share in the market in 2023. This was majorly due to the high incidence of power outages and growing number of housing complexes in the country. The frequent earthquakes, volcanic eruptions, and widespread flooding lead to power outages countrywide, which, in turn, drives the demand for diesel generator sets in the residential sector. Thus, in order to cope with power outages, people living in Indonesia strongly depend on diesel gensets.
• The industrial category is projected to witness the highest CAGR, of over 5,3%, during 2024–2030 in the market, both in terms of volume and value. This will majorly be due to the rising number of government initiatives for the growth of the industrial sector. For instance, Indonesia’s Ministry of Industry has designed the ‘Making Indonesia 4.0’ initiative as an integrated roadmap to advance manufacturing practices and make the country a global industrial hub attracting overseas companies to set up their factories here.

Below are the major applications in which diesel gensets play an important role:

• Commercial
• Industrial (Fastest-Growing Category)
• Residential (Largest Category)

Market Nature - Consolidated

The market is consolidated as there are few key players. Some of the major players with a significant market share are Caterpillar Inc., Mitsubishi Heavy Industries Ltd., KOHLER Co. and Cummins Inc.

Players in the industry have been involved in product launches to remain competitive. For instance, in December 2021, Cummins Inc. announced the approval to its entire line of diesel generator sets for use with paraffinic fuels (EN15940), including hydrotreated vegetable oil (HVO), for standby applications. These generator sets enable decarbonization and advance the company’s current technology.

Indonesia Diesel Genset Industry News

• In January 2022, Cummins Inc. announced the launch of C550D5 (50 Hz) and C500D6 (60 Hz) series diesel generator sets for prime and standby power applications. This series is engineered to deliver a higher density of power than 15- and 16-liter variants that offer 42 kVA for every liter of displacement, with the help of the Cummins QSZ13 engine with a 13-liter displacement. The QSZ13 engine has XPI fuel injection and three-stage fuel filtration, protecting the system from fuels of a low quality.
• In September 2021, Cummins Inc. unveiled the NEW EC-AGS+ wireless control system for diesel and gas generator sets of the Onan brand at the 52nd Annual America’s Largest RV Show in Hershey, Pennsylvania. This system allows users to control their generator utilizing a mobile app. The wireless control enables automatic, manual, and voice activation to start the generator set, offers maintenance reminders via Bluetooth, and allows for climate monitoring.
• Mitsubishi Heavy Industries Engine & Turbocharger Ltd. (MHIET), a part of Mitsubishi Heavy Industries (MHI) Group, has developed a 2,000-kVA diesel generator for factories, hospitals, office buildings, and data centers.