U.S. Data Center Genset Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

U.S. Data Center Genset Market Size

U.S. Data Center Genset Market Trends and Growth Drivers

Rising Advancement in Generator Systems Is a Significant Market Trend

• There is a rise in the pace of technological advancements in data center generators in the U.S.
• Sensors and IoT are among the advanced technologies that are popular among various enterprises.
• Considerable advancement in technology has been made in DG sets with the goal of reducing noise, managing pollutants, and improving power output and efficiency.
• A number of advanced technologies have been developed to make gensets smaller and more capable of withstanding harsh weather.
• Advances in technology in data center generators are improving their efficiency, which leads in lower fuel consumption and operating costs, which is driving the growth of the market.
• In addition, a major trend in the distributed power generation space is the rise of electronic control systems, which enable remote system monitoring for better management and efficiency.
• Moreover, DG set makers are continuously utilizing the newest technologies to release models that comply with the most recent emission requirements in response to changing obstacles.

Growing Demand for Power Management Is Driving the Market

• There is an increase in the demand for efficient power management strategies in the U.S.
• Organizations are expanding and becoming more automated, due to which more data centers are being established in the country for data management.
• Cloud computing is being adopted by a number of U.S. firms to increase their scalability and efficiency and lower their overall production and operating costs. Due to this, there is a rise in the number of hyperscale data centers in the country.
• These mega centers are heavily investing in generators because they require a continuous power supply to offer the necessary processing capacity during blackouts.
• The average age of the large power transformers that supply energy to the majority of data centers, according to the U.S. Department of Energy, is more than 40 years. Due to this, improvements are being made in their power systems to offer the mandated uptime for each tier.

Growing Advancements in Battery Energy Storage Systems are a Challenge to Market Growth

• Advancements in Battery Energy Storage Systems are affecting the growth of data center generators negatively.
• Since lithium-ion batteries have a far higher density, a longer lifespan, a higher cycle life, and are better for multi-hour runtime, they are swiftly replacing the outdated lead-acid type batteries used earlier in BESS systems.
• Furthermore, as these BESS are produced more frequently and with better designs, their costs are coming down.
• In addition, higher manufacturing and improved design and manufacture led to lower costs for BESS components. For owners of data centers, they are now a more appealing investment, which is a challenge for genset.

U.S. Data Center Genset Market Analysis

Fuel Analysis

• Diesel will hold the largest market share, of 55%, in 2024 because diesel-operated generators can handle large loads during power outages.
• In addition, they are reliable engines with higher power density and fast start rates.
• Gas is expected to grow at the highest CAGR, of 8.2%, during the forecast period because it can be used for a long period and is more eco-friendly than diesel as it burns cleanly with low emissions of carbon dioxide and nitrous oxide.
• Moreover, prices of natural gases are highly stable and are less than the diesel-operated generators.

The fuels analyzed in this report are:

• Diesel (Largest Category)
• Gas (Fastest Category)
• Others

Tier Analysis

• The Tier IV category will hold the largest market share, of around 50%, in 2024 and is expected to grow at the highest CAGR, of 8.0%, during the forecast period because these data centers need more reliability and security.
• In addition, the need for fault tolerance at tier-IV data centers is responsible for the rapid growth of this category.
• The places are appropriate for mission-critical activities and businesses that require almost zero downtime because they contain fully redundant systems that guarantee ongoing operation even in the event of a single point of failure.
• In addition, tier-IV facilities offer a yearly uptime of 99.995%, which is comparable to or lower than 26.3 minutes of downtime.

The tiers analyzed in this report are:

• Tier I and II
• Tier III
• Tier IV (Largest and Fastest-Growing Category)

Capacity Analysis

• The less than 1 MW category will hold the largest market share, in 2024 due to the wide usage of edge data centers worldwide.
• The 1–2 MW category is expected to grow at the highest CAGR, during the forecast period due to the growing investment in the construction of mega data centers in the country. They are designed to provide more than 48 hours of runtime.
• In June 2024, the U.S. colocation company DataBank had a dedication ceremony for its newly opened Orangeburg Data Center in the Hudson Valley, New York state.
• The company's first data center on the site, the 30 MW "LGA3" facility, is now under construction and expected to open in early 2025.
• Columbus, Ohio-based Cologix has declared the completion of its fourth data center. COL4 is positioned as the region's first colocation data center with cloud and artificial intelligence capabilities.

The capacities analyzed in this report are:

• Less than 1 MW (Largest Category)
• 1–2 MW (Fastest-Growing Category)
• Greater than 2 MW

Application

• The industrial category will hold the largest market share, in 2024 and is expected to grow at the highest CAGR, of 8.3%, during the forecast period.
• Various large-scale industries in the U.S. are integrating data centers into their operational infrastructure to manage and secure data.
• Additionally, data center generators provide robust backup power solutions, ensuring the uninterrupted flow of energy and strengthening the digital infrastructure of the various industries in the country.

The applications analyzed in this report are:

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

Geographical Analysis

• The Southern region will hold the largest market share, of 45%, in 2024, and it is expected to grow at the highest CAGR, of 8.5%, over the forecast period. This is due to the fact that this area of the U.S. contains the most data centers.
• The southern region is the hub for the data centers due to the abundant electricity to fulfill the intense power demand of data centers and access to fiber connectivity.
• Virginia, located in the southeast region, has the largest number of data centers because it has the best connectivity as well as low power costs, which are favorable for most businesses.
• There are 467 data centers in Virginia, making it the largest number of data centers in the world.

The regions analyzed in this report are:

• Northeast
• Midwest
• West
• South (Largest and Fastest-Growing Region)

U.S. Data Center Genset Market Share

• This market is consolidated in nature due to the presence of large players in the U.S. with the prowess to manufacture high-capacity generators with advanced technologies.
• These players are investing in the research and development of these systems to compete with other large and small and medium-sized enterprises.

U.S. Data Center Genset Market News

• In February 2024, Duke Energy Corp. is in discussions with tech companies, such as Microsoft Corp., about the potential of employing generators placed at their data centers to augment the grid with electricity during moments of high demand.
• In August 2023, Mitsubishi Heavy Industries Engine & Turbocharger Ltd. launched a new model MGS3100R of the MGS-R series to meet high power demands for emergency generator sets.
• In May 2024, EdgeCloudLink delivered the first hydrogen-powered modular data center, with an investment of USD 10 million.