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Power Rental Market Overview
The global power rental market is estimated to value $9,167.6 million in 2017 and is projected to witness a CAGR of 10.3% during the forecast period. Rising GDP and population of the world and increasing demand for power from emerging economies are some of the factors driving the market growth. Rental power is defined as temporary power generated by rental systems for meeting power requirements. They are generally used in industries that are often located remotely, without any access to permanent electricity. These power systems or generators are also used in situations of grid failure, power blackout, and disaster emergency.
Global Power Rental Market, BY fuel type, $M (2013-2023)
Based on fuel type, the power rental market has been categorized into diesel generators, gas generators, and others, where the “others” category includes gasoline/petrol and solar fuel-based generators. Diesel generators held the largest share in the market during the historical period and are estimated to contribute more than 75.0% share to the market in 2017. The availability of diesel is the prime factor driving the demand for diesel generators in the market. Also, increasing demand for these generators in different end-use areas such as construction, manufacturing, and residential and commercial buildings is supporting their market growth.
On the basis of application, the power rental market has been categorized into prime power, standby power, and continuous power. Continuous power was the largest application area of power rentals during the historical period and is estimated to account for more than 45.0% share in the global market in 2017. The capacity of continuous power generators to provide electricity at constant loads for an unlimited time period encourages their penetration and wide usage in different industries.
Based on end user, the power rental market has been categorized into utilities, oil and gas, industrial, construction, events, mining, and others. Other end users include shipping, manufacturing, residential and commercial buildings, and military. The utilities category is estimated to contribute more than 45.0% share to the market in 2017. This can be attributed to the aging fleet of thermal power plants in different regions, which is resulting in their decommissioning or conversion into natural gas-fueled plants. Thus, to fill the power supply–demand gap during conversion, maintenance, or shut down of power plants, utility companies are renting power generators of different ratings.
The power rental market has also been categorized into three power ratings: up to 50 kW, 51 kW–500 kW, and 501 kW–2,500 kW. Generators of power rating 51 kW–500 kW are estimated to contribute more than 45.0% share in the market in 2017. This can be attributed to their large-scale utilization in several residential and commercial applications.
The Middle East & Africa (MEA) region has been the largest power rental market globally and is also anticipated to be the fastest-growing market in the coming years. Increasing demand for rental power in the oil and gas, events, construction, and mining sectors is driving the market growth in the region.
Power Rental Market Dynamics
The major trend identified in the power rental market is the growing popularity of gas and hybrid generators, globally. Besides, the growing power demand from emerging economies is a key factor driving the market growth.
Gas-based generators are considered environment- and pocket-friendly, as they release less emissions and create negligible noise besides being more affordable as compared to traditional fuel-based generators. They are clean, reasonable, easily available, and sustainable. The aforementioned factors clearly indicate the growing popularity of gas and hybrid generators as sustainable sources of electricity for facilities devoid of power supply. Thus, companies and consumers are increasingly preferring hybrid generators over diesel generators.
Emerging countries such as China, India, South Korea, Brazil, Turkey, Thailand, and Qatar are undergoing rapid transformation in terms of technological advancements, industrialization, and acceptance of mixed economy or free market. Furthermore, major power rental companies from North America and Europe are establishing their footprints in emerging economies, thus encouraging urbanization and economic growth. In addition, continuously increasing infrastructure and construction-related activities in emerging economies are supporting their economic development. All these developmental activities require electricity for smooth operations. Altogether, these factors are indicating the growing demand for electricity from emerging economies, which, in turn, is supporting the growth of the power rental market.
Diesel and gas generator emissions are regulated by federal or state organizations. For instance, in the U.S., the Environmental Protection Agency (EPA) has made the Clean Air Act (CAA) for regulating air emissions from stationary or mobile sources. In India, the Ministry of Environment, Forest and Climate Change has made rules to regulate emissions from diesel engines. Diesel-based generators are a prominent source of air and noise pollution. Thus, stringent environmental regulations associated with diesel-based generators are expected to restrain the power rental market growth during the forecast period.
Power Rental Market Competitive Landscape
Some of the major players operating in the global power rental market are Aggreko PLC, APR Energy, Caterpillar Inc., United Rentals Inc., Cummins Inc., Herc Holdings Inc., Atlas Copco AB, Ashtead Group PLC, Al Faris Group, and Quippo Infrastructure Equipment Limited.