South Africa DG Set Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024-2030)

South Africa DG Set Market Trends & Drivers

Rapid Growth in Telecom Sector Is Driving Market

• South Africa's telecom sector is rapidly growing with time. Telkom, Liquid Intelligence Technologies, Broadband InfraCo, and municipal providers have all made significant investments to improve their network capabilities.
• Moreover, MTN South Africa aims to cover 60% of the South African population with 5G infrastructure by 2025. In addition, the company currently has 1,000 5G mobile sites.
• Furthermore, in November 2021, Vodacom South Africa agreed to acquire a co-controlling interest in all of Community Investment Ventures Holdings (CIVH)’s current material assets, such as Dark Fibre Africa and Vumatel. Once the transaction completes, Vodacom will hold an equity interest of approximately 30% in a new entity, known as InfraCo, which will own these assets, along with certain fiber assets that Vodacom will bring to InfraCo. This shows a potentially high demand for diesel generators in telecom towers to deal with power outages, the frequency of which is rather high. Due to this factor, the South African diesel generator market is expected to witness considerable progress in the forthcoming years.

Government Initiatives for Infrastructure Development also Drives Market

• The advance in the country can be attributed to the rising demand for electricity, which is, in part, owing to government initiatives such as the National Transport Master Plan 2050, Vision 2025, and National Development Plan (NDP) 2030. The NDP is aimed at reducing poverty and minimizing inequality by 2030.
• Moreover, South Africa's economic position is strengthened by its well-developed legal, financial, communications, and transportation sectors, as well as an open trade policy and a relatively strong domestic market. South Africa performs well in terms of trade facilitation and logistics and transportation infrastructure.
• Due to the COVID-19 crisis, a clear focus on targeted infrastructure investment and implementation that contributes to economic growth and recovery in the short, medium, and long terms is required. This has been considered the primary means of bringing the country out of its deep recession.
• For instance, in August 2021, the Department of Public Works and Infrastructure (DPWI) implemented the National Infrastructure Plan 2050 (NIP), which mainly focuses on eradicating poverty and minimizing inequality by developing different sectors, to achieve a broader economy. Therefore, the rapid increase in the establishment of business hubs, industries, and healthcare infrastructure is the major driver for the diesel genset market in the country.

Harmful Effects of Diesel Gensets Restrain Market Growth to Certain Extent

• A diesel genset releases harmful pollutants, which can cause serious health issues, including cancer and cardiovascular and respiratory health effects. Diesel exhaust contains more than 40 toxic air contaminants, including nitrogen oxide, which is the most-important ozone-depleting gas. As per the World Health Organization (WHO), a total of 108,608 cancer cases were recorded in 2020 in South Africa. Moreover, respiratory tract infections, rhinosinusitis, asthma, and chronic obstructive pulmonary disease (COPD) can be caused by GHG emissions.
• Therefore, numerous emission standards have been implemented here in response to the rising pollution levels and related disease incidence. For instance, South Africa’s annual GHG emissions are targeted to be limited to 398–440 million tons of CO2 equivalent by 2030, as per the draft plan implemented to abide by the Paris Agreement targets. This will reduce the emissions by 28% as compared to its 2015 pledge, which set annual emissions at 614 Mt CO2.
• It is mandatory to strictly adhere to such emission standards, which may require modifications in gensets, thereby making them more expensive for the masses. This creates challenges for the market players in South Africa, where a vast chunk of the population still lives below or close to the poverty line; therefore, cannot afford expensive stuff.

South Africa DG Set Industry Overview

Power Rating Insights

• The 15–75 kVA category will hold the largest market share, of 40%, during 2024–2030. This is primarily due to the surging use of 15–75 kVA DG sets in residential societies and commercial areas, including telecom towers, small commercial offices, and retail outlets.
• Moreover, the significant losses of energy from the grid and improper distribution channels often cause power failure in the country. In order to counter this, households, retail shops, and commercial offices are using diesel gensets with a power rating of 15–75 kVA.
• The 76–375 kVA category is expected to witness the fastest growth during the forecast period, advancing at a CAGR of 4.7%. This can be mainly due to the high demand for these variants in small telecom towers, commercial complexes, industries, restaurants, and hotels.

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

• 15–75 kVA (Largest Category)
• 76–375 kVA (Fastest-Growing Category)
• 376–750 kVA
• Above 750 kVA

Application Analysis

• In terms of value, the commercial category will continue to hold the largest share till 2030. The high-volume demand for diesel gensets in this category is attributed to the rapid development of residential establishments, transportation (rail and road) infrastructure, retail outlets, hospitals, restaurants, malls, and telecom towers in the country.
• Moreover, the industrial category is expected to witness the fastest growth, of 4.7%, during the forecast period. This can be ascribed to the high requirement for DG sets as a prime or a backup power source in the manufacturing, oil and gas, construction, and mining sectors.

Below are the major applications that play an important role in the South Africa DG set market:

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

Competitive Analysis

The market is consolidated with a few major players. The major trend observed in the market is partnerships and collaborations by companies in order to stay ahead of their competitors. For instance, in December 2020, YANMAR announced its partnership with Vert Energy Group of Johannesburg, South Africa, to make the latter its official distributor for YANMAR industrial engines in South Africa and neighboring countries, in succession to Prodist.

Furthermore, in November 2021, Vodacom South Africa agreed to acquire all material assets possessed by Community Investment Ventures Holdings (CIVH), including Vumatel and Dark Fibre Africa. Under this agreement, Vodacom holds an approximately 30% equity interest in a newly designed entity, InfraCo, along with certain fiber assets that Vodacom would bring to InfraCo. Due to these factors, the telecom sector will flourish in the country, which, in turn, will propel the South African DG set market in the upcoming years.

South Africa DG Set Market Companies News

• In February 2022, Volvo Penta strengthened its portfolio of generation engines with the launch ofTAD1346GE 500 kVA. This fuel-efficient and reliable compact engine in the new D13 power node gives full power rapidly, making it ideal for emergency/stand-by operations.
• In October 2021, Generac Mobile launched two new large mobile diesel gensets— MDE570 and MDE330—which are simple to operate and maintain. The machines have wide, removable doors, which allow technicians to reach all service points easily. Moreover, the construction and rugged steel design enable operation in a variety of applications, regardless of weather conditions.
• In January 2021, Atlas Copco AB expanded its QES portable generator range up to 500 kVA with four new models for work sites. These latest models in the range are the QES 250, QES 325, QES 400, and QES 500, all of which are Stage 3A emission-compliant and available in 50-Hz and 60-Hz versions.