diesel genset
A diesel genset from FPT Industrial: the Italian firm predicts “a dominant role” for diesel gensets.
Credit: FPT

The global diesel generator set market is more than holding its own against gas rivals, boosted by demand in emerging countries and technology innovation.

According to a new report, the global diesel genset market will grow and be worth $41 billion by 2018 despite competition from natural gas gensets.

The analysis by Navigant Research of the US found that diesel gensets will remain “one of the least expensive, most reliable technologies available today” for commercial facilities like hospitals and data centres that require “mission-critical power in the event of a grid outage”.

Navigant says in the short term, countries with strong economic and/or population growth rates that increasingly suffer blackouts – such as Nigeria, India, Chile and South Africa – will continue to drive diesel sales.

The report highlights India as an example of a country where industries have become highly dependent on diesel due to power outages spanning as much as 16 hours per day, making them more vulnerable to price volatility. The market for diesel gensets in India is growing at a rapid pace and recent data expects its total revenues to pass $3.3 billion by the end of 2018. Southern India accounts for most diesel genset sales, with Bangaloreand Chennai the foremost users.

Yet Navigant Research warns that diesel’s grip on the market is gradually waning. “Although providers of diesel gensets can expect to see continued growth over the next several years, they face rising competition from natural gas gensets,” says Dexter Gauntlett, a Navigant research analyst.

“Over the next decade, the increase in unconventional gas resources and tightening emissions regulations for stationary generators will favour clean-burning natural gas systems over their diesel counterparts in North America.”

And Navigant says that globally, gas gensets are “poised for rapid growth, particularly in markets where inexpensive natural gas is widely available”. Navigant forecasts that natural gas genset installations will reach 13.2 GW per year by 2018 and produce nearly $45 billion in cumulative revenue between now and then.

Nonetheless the diesel genset market continues to thrive because of the growing energy needs of so many developing countries and the ease of which diesel solutions can address these needs.

On top of that, the diesel genset technology is still evolving apace, as vendors develop next-generation generators in a bid to differentiate their products to get a competitive edge.

The companies that dominate the market include Caterpillar, Cummins and Kohler while other players include Siemens, GE, Mitsubishi Heavy Industries and FPT Industrial.

Some manufacturers are developing generators with comprehensive control and monitoring systems, which can improve the overall efficiency of the equipment, while others are trying to offer user-friendly generators, where end-users can easily operate the generators irrespective of whether or not they possess proper technical knowledge.

The Cummins C1000 D5 genset.<br>Credit: Cummins
The Cummins C1000 D5 genset.
Credit: Cummins

FPT Industrial is the power generation arm of Italy’s FIAT Industrial Group and manufactures a range of gensets. Its diesel products are made in four dedicated power generation facilities: Sete Lagoas in Brazil; Fecamp in France; Pregnana Milanese in Italy and Chongqing in China.

The company agrees that the current hotspots for diesel gensets are in emerging markets. “The bulk of new opportunities are coming from Asian countries, the Middle East and select African countries,” says Douwe Hilarius, FPT’s marketing & communication manager.

“In general, developing and modernising countries will have a significant increase in demand for gensets due to the fact that GDP and infrastructure investments will grow.”

And he sees no sign of the popularity of gensets waning. “Overall, the worldwide market is increasing. Highly developed regions like Japan, North America and Europe are mature markets and they have lower growing rates because of the robustness and capillary of the electricity grid.”

“In the long term, gensets will continue to exist and to play a dominant role in the energy supplying industry.”

Hilarius says geography will also be the key factor in where gas may take over from diesel as the genset of choice.

“Gas gensets are an increasing market where there is high gas availability at low prices – North America, Russia and China have those features and they are expected to grow respectively at 5 per cent, 10 per cent and 20 per cent yearly to 2015.”

However he adds “diesel will continue to play a dominant role in stand-by application due to better performance in terms of load acceptance and lower installation cost.”

Are there any innovations that diesel manufacturers can employ to keep ahead?

“Genset manufacturers have to pursue innovations that allow a reduction in total cost of ownership. Working on energy efficiency and power controls to reduce operating cost will be the key topics within the genset industry,” says Hilarius.

Diesel at heart of innovation

Grand Central Terminal<br>Credit: MTA
Grand Central Terminal

Two recent projects highlight how diesel gensets are still the first choice for key projects in Europe and the US.

Caterpillar Incorporated won a deal to provide equipment for emergency standby power generation at New York City’s historic Grand Central Terminal.

The facility was outfitted with two 2000 kW Cat 3516 diesel gensets and paralleling switchgear to add significantly more backup generating capacity.

The New York Power Authority (NYPA) managed the design, procurement and installation of the two generators and switchgear.

The project for the Metropolitan Transportation Authority was intended to provide an additional level of security to Grand Central Terminal in case of problems on the electric power grid that could affect the transportation hub’s electricity service.

The new backup generators accept ultra low-sulphur fuel, in correlation with MTA’s air-permitting restrictions. Another NYPA provision was that the generators, switchgear and load bank were required to be completely factory tested to ensure all emergency power, load sharing and paralleling capabilities were fully functioning together prior to shipment, to avoid complications that could arise in an underground rail tunnel. All components were transported to Grand Central Terminal on rail cars and then reassembled on site.

Meanwhile, in a $21 million project, Mattala Rajapaksa International Airport in Sri Lanka has installed a pair of Cummins Power Generation diesel gensets to act as standby power provision in the event of outages.

Project contractor China Harbour Engineering Company (CHEC) installed two 939 kVA stand-alone Cummins Power Generation C1000 D5 gensets.

Because the generator set for the airport’s cargo unit had to be installed within the cargo building itself, noise management was a key consideration. Soundproofing the genset to achieve a level of 70 decibels at a distance of 1 metre from the room proved to be an effective solution.

Opened in March 2013, Mattala is the second international airport in Sri Lanka that serves domestic and international flights.

It acts as a hub for air and sea cargo trans-shipments together with Magampura Port and as the airport is located in the rural area of Hambantota, it was crucial for the generators to be installed to ensure continuous supply of power in the event of an emergency.

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