The Data Center Generator Market is expected to grow at a CAGR of 7.5% over the forecast period 2022 to 2027. The rise of edge computing and the growing focus on allowing high availability services and fixing power reliability concerns are adding to the growth of the data center generator market. Heightened investments from cloud service and colocation providers are among the significant contributors to the growth of the market.
- The market is seeing the procurement of renewable energy among Tier I and Tier II colocation providers, with most hyperscale facilities expected to operate with renewable energy resources by 2023. For instance, according to the Solar Energy Industries Association in 2018, renewable electricity capacity accounted for some 20.5% of total U.S. generating capacity.
- Generators are installed across facilities to ensure that it operates at 100% availability irrespectively of incoming power from utility grids in the global market. The increase in innovations and adoption of fuel cell technology will reduce the demand for generator systems in the global market over the next several years.
- Many colocation service providers have raised data centers' production due to the growing demand for edge data centers worldwide. For example, in 2019, Google invested USD 3.3 billion to develop its data center presence in Europe, including an added 600 million euros investment in the Hamina data center in Finland, taking the whole investment in the site to EUR 2 billion.
- Moreover, the growing construction of hyperscale facilities and the increasing adoption of Diesel Rotary Uninterruptible Power Supply (DRUPS) is anticipated to encourage the market. Growing electricity prices and electricity taxes is also prompting operators to choose countries where government firms are lessening electricity costs and supporting the use of renewable energy sources to power facilities.
- Nevertheless, rising power cost is predicted to have an adverse impact on the market. Accelerating the trend of utilizing fuel cells as a power backup due to huge costs of generators might also cause restraint in the market growth. For Instance, in 2019, the Adani Group stated the investment of USD 9.8 billion to install solar-powered data parks in India for the next 20 years.
- While the global economies are falling under the unprecedented destruction caused by the outbreak of COVID-19 pandemic, the data center generator market is affected to a formal extent with many data center infrastructure that has been requested to stop manufacturing and production projects globally.
Key Market Trends
DRUPS Systems to Dominate the Market
- The growing use of DRUPS systems excludes the use of separate data center UPS and generator systems and enhances the overall effectiveness of the facilities and, hence, the fastest-growing segment of the market. These systems utilize flywheel UPS technology overcoming the problems caught for using VRLA batteries in UPS systems in the market.
- Running multiple DRUPS systems in 2N redundant configuration will be critical for the successful operations of these systems. The leading vendors focus on continuous innovations in methods to create a perfect alternative to UPS and generators. The four prominent vendors offering DRUPS systems in the global data center generator market are Piller Group, Hitzinger, Euro-Diesel, and Hitech Power Protection.
- The most commonly available generators in the market are diesel generators, and bi-fuel generators and diesel generators contribute to over 90% of the total revenue in the market. The vendors invest in the development of systems that can be installed facilities that operate high-performance computing (HPC) infrastructure in the global data center generator market.
APAC to Have Major Share of the Market
- The increasing investments by global and regional facility operators and the rising adoption of public cloud and hybrid cloud services are the primary factors attributing to the growth of the Data Center Generator Market in the APAC region.
- AWS, Google, Baidu, Alibaba, Microsoft, and Apple are the largest investors in the APAC market. The deployment of edge computing locations across many nations, particularly India and China, will support APAC's growth during the forecast period.
- The presence of influential companies, such as Caterpillar Inc. and Cummins, Inc., among others, has positively influenced the growth of the regional market. Determinants, such as advanced technology advancement and information about the same, are also anticipated to have a positive influence on the market.
- The expanding investment in renewable projects, hydroelectric, namely solar and wind farms to power facilities operations, will lead to data center construction in the APAC region over the next several years. Power dependability is amongst the principal challenges in the APAC market, where the requirement for the generator will be a strong driving force for market revenue growth.
The Data Center Generator Market is concentrated and consists of a few significant players. Big players strive to adapt their product offerings in terms of increased quality and technological advancements, such as the inclusion of bi-fuel technology and smart digital controls in generators. Caterpillar Inc., Cummins Inc., Generac Holdings Inc., Kinolt (Euro-Diesel SA), and Hitec Power Protection BV, among others, are some of the major firms of the market. With a prominent share in the market, these major players are focusing on expanding their customer base across foreign countries. These businesses are leveraging strategic collaborative initiatives to expand their market share and improve their profitability.
- June 2022 - HITEC has successfully secured the contract to supply a large number of PowerPRO2700 units to a major new high-spec data center industrial facility in the US. In addition to the units, Hitec will also provide their associated auxiliary equipment and Medium Voltage Switchgear. When complete the HITEC system will deliver continuously and stabilized power to support the entire production process.
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1.1 Study Assumptions_ and Market Definition_
1.2 Scope of the Study_
2 RESEARCH METHODOLOGY_
3 EXECUTIVE SUMMARY_
4 MARKET DYNAMICS
4.1 Market Overview_
4.2 Market Drivers
4.2.1 Increasing Construction of Data Centers by Colocation Service Providers
4.2.2 Growing Construction of Hyperscale Data Centers
4.3 Market Restraints
4.3.1 Lessening Generator Adoption in Areas with Reliable Power Grid
4.3.2 Growing Carbon Emissions from Data Centers
4.4 Industry Attractiveness - Porter's Five Forces Analysis_
4.4.1 Bargaining Power of Suppliers
4.4.2 Bargaining Power of Consumers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitutes
4.4.5 Intensity of Competitive Rivalry
4.5 Assessment of Impact of Covid-19 on the Industry
4.6 Industry Value Chain Analysis
5 MARKET SEGMENTATION
5.1 By Systems
5.2 Generator Capacities**
5.2.1 Less than 1MW
5.2.3 Greater than 2MW
5.3 Tier Standards**
5.3.1 Tier I &II
5.3.2 Tier III
5.3.3 Tier IV
5.4.1 North America
5.4.3 Asia Pacific
5.4.4 Rest of the World
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles*
6.1.1 Caterpillar Inc.
6.1.2 Cummins Inc.
6.1.3 Generac Holdings Inc.
6.1.4 Kinolt (Euro-Diesel SA)
6.1.5 Hitec Power Protection BV
6.1.6 KOHLER (SDMO)
6.1.7 Yanmar Holdings Co., Ltd.
6.1.8 MTU Onsite Energy GmbH
6.1.9 Ausonia S.r.l.
6.1.10 Aggreko PLC
6.1.11 Atlas Copco AB
6.1.12 Deutz AG
6.1.13 Detroit Diesel Corporation
6.1.14 HITZINGER GmbH
6.1.15 Inmesol gensets, S.L.U.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
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REPORT WRITING/ PRESENTATION
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