Is India prepared to lead the development of the Diesel Generator rental & leasing market?
India-diesel-generator-rental-and-leasing-market
May 10, 2023
Indian Diesel Generator Market is currently at the growth stage and the market is increasing at a double-digit CAGR owing to the demand for cost efficiency, personal attention, and upgradation in technology. But, are these factors strong enough for India to lead the development of India’s Diesel Generator Rental and Leasing Market? Let’s find out.
1. Advancement of manufacturing industry and rising demand for power for construction projects has augmented the demand for the Diesel Generator rental and leasing market in India
Source: Interviews with Industry Experts, Industry Articles and Ken Research Analysis
4. Indian government has approved a USD 3.53 billion PLI for the automotive sector as of September 2021
Growth Driver in India diesel generator rental & leasing market
Power Outrage During Natural Calamities
- With the population growth in India, people are starting to move to areas prone to natural disasters such as earthquakes, landslides, floods, heavy rains, storms and heavy snow.
- These crises are increasing due to problems such as power outages due to delays in power transmission and distribution. To overcome this situation, people prefer to use a rental diesel generator set.
- Also, government officials and energy companies are concerned about power outages at infrastructure facilities such as hospitals and power plants after disasters, etc., facing serious problems. Therefore, various companies and industries are likely to adopt rental diesel gensets to ensure uninterrupted power supply, driving the diesel genset rental market in India.
Increased Government Initiatives in Manufacturing Sector
- Government of India has continuously taken various initiatives to promote healthy growth of manufacturing sector in the country, such as: Make in India with the aim of building the best manufacturing infrastructure in India and encouraging investors and manufacturers to invest and build in India.
- Disruptions in global supply chains are opening up a wide range of opportunities for the manufacturing sector in India. Additionally, government policy initiatives such as Production Linked Incentives (PLI) aim to boost domestic manufacturing. As of September 2021, the Indian government has approved a USD 3.53 billion PLI for the automotive sector.
- Moreover, the contribution of Micro, Small and Medium Enterprises (MSMEs) to key public and private sector industries covers the growing domestic demand. Meanwhile, export growth continues to gain momentum domestically. Many manufacturing companies prefer to rent diesel generators and want to avoid the initial cost of diesel generators due to the high maintenance and operating costs.Hence, significant growth in the manufacturing and MSME sector is likely to boost the Indian diesel generator rental market.
Source: Interviews with Industry Experts, Industry Articles and Ken Research Analysis
5. Owing to the growth in power outages & advancement in the manufacturing industry, India’s Diesel Genset sector is stipulated to project robust growth during the forthcoming years
Trends & Development in India diesel generator rental & leasing market
- The Indian diesel generator rental market incorporates portable generators with built-in sensors to offer automatic triggering of loads and technological improvements in portable fuel generators to lessen the risk of carbon monoxide (CO) poisoning.
- Suppliers have been growing portfolio of various generator sizes, as well as adaptable rental packages.
- These are designed to meet the customer's budgetary and time-sensitive power and fuel requirements.
- The India Diesel Genset Market is expected to experience rapid expansion in the years because of Mahindra & Mahindra Ltd.'s dedication to a greener world.
- It has developed India's first gas generator that is low maintenance, quiet, and requires no fuel handling.
- The demand for an effective power supply is being accelerated by growing power failures, especially in rural regions.
Source: Interviews with Industry Experts, Industry Articles and Ken Research Analysis
6. The country is prepared to lead DG rental & leasing development due to the adoption of glow plugs and heating elements & the durability feature it possess
STRENGTH
- Low Maintenance: This is because, unlike a gas engine, a generator's engine requires fewer components to start, so there will be no need to bother about replacing spark plugs or rebuilding carburetors.
- Durability: Diesel engines can withstand heavy wear and tear in a variety of environmental situations since they are highly durable in the workplace.
- Safe Storage: Diesel is still flammable, although it is significantly less likely to catch fire than other fuels like gasoline.
WEAKNESS
- Price of diesel: Due to regulations, diesel prices will keep rising.
- Cost of Installation: Although inexpensive in price, the process of installation additionally takes extra time and can be extra costly.
- Noise Pollution: Diesel Generators may be very noisy, so they’re regularly located far from work areas
OPPORTUNITY
- Light Batteries, quick recharge and Longevity: Batteries are a ways too heavy for plenty applications, discharge quick and feature lengthy recharging times. Light batteries with quick recharge and longevity could help in boosting the market.
- Adoption of Glow Plugs & Heating element: In cold weather, starting the generator can be problematic. It can be overcome by the application of glow plugs and other heating elements which warm up the engine including the incoming air. But this comes at an additional cost.
Source: Interviews with Industry Experts, Industry Articles and Ken Research Analysis
7. However, there still remain some road blocks like strict environmental regulations, and increasing penetration of power grids & others in India diesel generator rental & leasing Market
Bottlenecks & Challenges in India diesel generator rental & leasing market
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Government Regulations
- Strict environmental regulations by government agencies such as, emission and noise limits and other requirements for genset and the impact of oil price fluctuations on oil-dependent sectors are expected to hamper the growth of the global electricity rental industry.
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Controlling Emissions
- Increasing penetration of power grids and increasing implementation of laws and regulations aimed at controlling emissions to the environment are expected to impede the growth of the Indian diesel generator market in the near future.
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Environmental Impact
- In recent years, Indian regulators have imposed strict regulations on diesel generator sets due to the harmful environmental impact and carcinogenicity of these generator sets. This shift to off-grid power generation has reduced the traditional dependence on diesel generators in several regions of the country, thereby restraining the growth of the Indian diesel generator market.
Source: Interviews with Industry Experts, Industry Articles and Ken Research Analysis
8. But, Policies to limit emissions and growing foreign investments with technological advancement act as catalysts in driving the Indian diesel generator market and securing the future of the industry
Growth Driver in India diesel generator rental & leasing market
Policies and Norms to Limit the Emission from Fuel Engines
- With increasing urbanization, concerns about pollution are also increasing due to the daily increase in industrial emissions, burning of fossil fuels, and increased transportation.
- Therefore, various government guidelines and standards have been adopted to limit emissions, including: Bharat Stage VI Emission Standards.
- This standard only allows 50 ppm sulfur content. Additionally, the Ministry of Environment, Forestry and Climate Change (MoEF&CC) has proposed some universal emission standards for diesel generators running on all types of fuel. As a result, all these rules and guidelines are expected to benefit the Indian diesel generator rental market.
Growing Foreign Investments & Technological Advancements
- Diesel fuel rental market share is complemented by increasing foreign investment and continued technological development, including high reliability and performance.
- Frequent power cuts and blackouts, as well as aging transmission and distribution lines, will have a positive impact on the outlook for the sector.
- Without additional equipment, rental units can be set up quickly and then dismantled to support other projects once demand is met.
Source: Interviews with Industry Experts, Industry Articles and Ken Research Analysis
