Friday, February 26, 2021

Generators & Engines


Call it a demand-supply conundrum or a renewed thrust on the construction and infrastructure activities post pandemic, India is up for a huge infrastructure rebound in the next few years. Added to it are the supportive government policies, which are further pushing the growth envelope with a view to achieve the fastest GDP growth in the near future… such impetus has driven the growth of sub-segments as well, including gensets and diesel engines. Buoyed by the rapid growth in the construction activities across the country, this segment is set to the POWER PERFORMER going ahead, writes Prerna Sharma


A recent report on capital goods by Motilal Oswal highlighted three major growth areas of construction activity encompassing railways, metro rail and roads. All these require generators to supply power and this augurs well for the generator industry. The demand for generators at construction sites is a function of the growth in the construction industry. The building and construction industry in India is poised to grow steadily as predicted by KPMG in a report where it highlighted that 9 crore houses needed to be built in India at an estimated investment of US$ 2 trillion to accomplish the “Housing for all by 2022” vision. This would also involve the investment of another US$ 1.5 trillion in supporting infrastructure comprising commercial real estate and urban infrastructure. Such figures indicate greater future and the enhanced demand for the power generator industry, especially the gensets and diesel engines segment.

The Indian gensets market has witnessed a slump in its growth rate during the COVID-19 crisis, as a result of the nationwide lockdown implemented to stop the virus from spreading. Subsequently, a large number of manufacturing plants and commercial complexes got shut down, while construction activities stopped due to laborers heading back home. Even the Indian Railways suspended its passenger services, which has further led to a reduced demand for gensets.

Historically, the above-15 kVA category has held the largest share in the Indian gensets market, based on power rating. Commercial complexes, residential facilities, restaurants, small industrial units, and telecom towers widely deploy these gensets to meet their auxiliary electricity demands. As the number of residential societies and commercial complexes increases in the country, so will the demand for above-15 kVA gensets.

In the years to come, the commercial category will dominate the Indian gensets market, under segmentation by application. The installation rate of gensets is rising rapidly in restaurants, telecom towers, hospitals, hotels, malls, and various other commercial settings. With the growth of the telecom, healthcare, retail, and hospitality sectors, an increasing number of gensets will be installed.

The highest value CAGR in the Indian gensets market, of 14%, is predicted to be seen by gensets with an above-400 cc engine capacity. The commercial and industrial sectors, where the electricity requirement is always high, require gensets with a higher engine capacity, for reliable operations. Moreover, if the power load increases suddenly, higher-engine-capacity gensets are able to respond quickly.


The drivers

Several major manufacturers in the country offer diesel generators with power rating starting from 2.5 KVA going all the way up to 3750 KVA. Each of them has carved out a niche for themselves operating in the specific power rating segment they are proficient in. With the implementation of GST, these manufacturers see a higher role for themselves and are taking steps to cater to the increasing demand expected from huge investments in infrastructure in the future.Although solar-powered generators along with hybrid generators are posing a challenge, diesel generators will be the real backbone of the building and construction industry as diesel generator manufacturers are in a position to quickly scale up their production and launch diverse products that can cater to the expected high demand. What is more, these generator manufacturers have a wide network of dealers and service points manned by highly qualified and well-trained technicians. They have utilized the marvels of digital technology to offer customer services at the doorstep of the user.


Growth trends

The high-volume adoption of 5 kVA–75 kVA gensets in commercial applications, including telecom towers, retail outlets, offices, malls, and hotels, is projected to drive their usage. Domestic and cross-border investments, along with the digitization projects undertaken by the government and revival in the commercial real estate sector, are expected to result in the establishment of single- and multi-tenant data centers, thereby propelling the installation of 5 kVA–75 kVA diesel generator (DG) sets.

The demand for gensets and engines is driven by a variety of segments – residential, commercial, industrial, railways, marine, building and construction, telecom and data centres. While high power deficit was a key factor driving the uptake of DG sets in the past, the need for quality and sustainable supply continues to drive demand.

In recent times, Indian Railways (IR) has emerged as a major demand segment for DG sets owing to its modernization and refurbishment initiatives. Each power car has two DG sets. The annual industry volumes of DG sets stand at 500 units, with an expected market size of `2 billion - `2.5 billion in this segment. Further, with IR’s focus on electrification, the demand for diesel electric tower cars, which are used for installation and maintenance of overhead electric equipment, is also expected to increase.

Metro rail is also a key emerging demand segment for DG sets with the government likely to sanction metro projects for all town/cities with a population of over 1 million. Each metro station will need DG sets as backup in case of a power failure. The typical DG sets used in a metro station are in the 500-1,000 kVA range.

The building and construction segment also relies considerably on DG sets to supply power for various activities such as excavations for foundations, land levelling, road construction, bridge construction, concrete mixing, crane operation, bore well digging, on-site pre-stressed concrete production and welding operations. In addition, the commercial realty segment is expected to drive demand for DG sets as the need for office spaces and commercial establishments continues to increase, though residential demand may decline owing to improvement in grid power supply.

The mining segment is another key consumer of diesel engines and DG sets, which are used to run high tonnage equipment. With the Central Government’s target to increase coal production to 1 billion tonnes by 2024, the demand for diesel engines is also expected to increase. Further, the demand for propulsion engines and gensets in the marine segment is likely to grow with the commencement of cargo movement on inland waterway routes and the growth of traffic on commercial marine routes.


Technology potential

The diesel engine and DG set market has undergone a significant technology transition over the past few years due to the tightening of emission norms and customer requirements. For instance, mechanical controls have been replaced with electronically controlled technology for better fuel efficiency. Besides, generator manufacturers are producing gensets compliant with the central government regulations. The maximum permissible sound pressure level for gensets with a rated capacity of up to 800 kW was set at 75 dB(A) at a distance of 1 metre from the enclosure surface. The gensets should be provided with integral acoustic enclosures at the manufacturing stage itself. The noise norms came into effect on January 1, 2017. Further, the Central Pollution Control Board-II (CPCB-II) norms, which came into effect on April 1, 2014, have tightened emission limits for DG sets of up to 800 kW.

IoT-based smart/digital DG sets are being preferred by consumers owing to features such as remote monitoring of key parameters such as fuel level, fuel consumption, coolant level, engine temperature, abnormal noise level, power generated, capacity utilization and running hours. Another growing trend is the deployment of containerized DG sets that offer benefits such as silent operation as per the strict acoustical standards, high temperature and weather resistance, and ease of maintenance.

Further, DG set manufacturers are investing in research and development (R&D) to make products that can run on alternative fuels such as biodiesel, biogas and methanol to curb pollution caused by diesel combustion. In addition, hybrid gensets that can run on a combination of resources such as wind, solar, biomass, small/micro hydro and fossil fuels are being commercialized. These hybrid gensets are typically equipped with batteries. With the cost of lithium-ion batteries reducing rapidly, their adoption is expected to increase. Hybrid generators are particularly useful in places where access to fuels such as diesel and gas is difficult. Also, these generators are typically light and compact and offer ease of transportation.


Towards a cleaner future

Building and construction account for approximately 38% of global greenhouse gas emissions, with construction equipment amounting to substantial amounts of these emissions. For this to truly happen, many conventional ways of thinking will need to change. The biggest single shift will be that clean electrification is required. This is already happening with many cities banning diesel combustion engines from inner-city zones, and the growing trend for construction equipment OEMs moving their drive train technologies to electrified vehicles.

Diesel generators are a massive source of emissions in the form of CO2, sulphur dioxide and particulate material that are not only detrimental to the environment, but also to our health. The hybridization of diesel generators is one of our main focuses. The principle is two-fold, first the load curve is stabilized, and secondly, the diesel generator is automatically switched off and the consumers are powered by the on-board batteries. Both of these features amount to massive emission saving, as well as bonus cost savings for the diesel generator operation.

The Construction Site of the Future will also see the XPB being used as a Smart Hub, that will monitor electrical consumer operation transmit this data to controllers who will then have the ability of increasing productivity, performance as well as setting up predictive preventative maintenance schedule.


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