18 October 2019

Generators & Engines

Power pushers

 

With a lot of projects set for takeoff in 2016 the mood in the Indian engines and generator market remains gung ho for business, says SHRIKANT RAO  

 

In a fast growing world in which the availability of power supply is never sufficient engines and generators will always continue to have space. That is a position which gives a lot of confidence to manufacturers in the $12 billion global power generator market. India is one market which is seeing continues to see a growing demand growing.

 

 

Such is the business opportunity here that Andrey Semyonov, a Russian scientist intends to tap into the multi-billion dollar small engine generator market with his lightweight powerful engine originally designed for unmanned aerial vehicles. The strength of Semyonov’s product is that it is roughly 12 times lighter and 5 times cheaper than other devices of comparable power. It is reported that the machine will have an artificially-limited operating life and users will need to buy additional engine hours using an app.

 

With more than 50 million petrol power generators in existence across the world presently ranging from 0.5 to 15 kW in output it is the weight advantage which works in Semyonov’s favour – the machine weight, which averages 20 kg per 1 kW, continues to be a major drawback.

 

 

 

CONTINUING DEMAND

 

However, in a different sense, private power generators carry great weight – to be read as demand – in several places across India with no stable electricity access. The demand for electrical power is on the rise and experts anticipate a global consumption in the range of 36 to 82 PWh by the year 2050. What is encouraging about this trend of power deficiency for existing engine and generator manufacturers is that the market is expected to grow by 5.4 percent each year till 2020.

 

 

In their latest research study, "India Diesel Genset Market Outlook 2018", RNCOS analysts have identified growth in the diesel generator market on the strength of the rising demand for power back-up systems in the country. In 2013, the Indian diesel generator market grew 9.5 per cent compared to the previous year. Further, as per the assessment the Indian diesel generator market (from 5 to 100 KVA) is anticipated to grow at a CAGR of around 11 per cent in value terms during 2014-2018. The Indian diesel generator market has largely been occupied by medium range (20 to 62.5 KVA), accounting for nearly half of the total diesel generator market. With rising power cuts and supply shortages the huge growth witnessed in the Indian diesel generator market has remained a constant. Gensets still remain the main source of power for housing, construction projects and as backup demand from IT companies, data centres, cinema halls, multiplexes and malls continues to grow. Naturally therefore, the demand for diesel generators is expected to grow in the coming years.

 

With the industry's immense growth potential, huge opportunities are anticipated for both existing and new market players like Kirloskar Oil Engines, Cummins India, Mahindra Powerol, Birla Power Solutions, Ashok Leyland's Power Solution, Greaves Cotton, Kohler Power Systems and Cooper Corporation.

 

 

THE MARKET DRIVERS

 

It is easy to gathering oomph in the market. With infrastructure and construction projects, information technology firms, banks and other financial institutions requiring consistent power supply – data loss is more expensive than the capital expenditure required for backup power equipment – demand for diesel generators is expected to grow in the coming years. While it would be rude to say that manufacturers are laughing their way to the bank it is fair to say that the market continues to bank on the power generators. In the recent past the telecom sector has been a key growth driver for the small diesel generator set market. While the 15-75 kVA diesel generator set market saw a slight climbdown due to saturation in certain areas which led several tower infrastructure firms to put their tower addition plans on hold, since the advent of 3G spectrum services in 2010, the small diesel generator market has seen a growth revival. There has been a fresh wave of demand for diesel generators in the range of 15-30 kVA with major telecom firms making huge investment in acquiring frequencies across major urban regions.

 

 

 

GLOBAL STANDARDS

 

Most of the major suppliers of diesel generators sets in India have been continuously upgrading the design of their products to conform to new emission standards currently in vogue in the European Union. This has entailed substantial investments and technology transfer agreements with global engine suppliers. With projects now gathering frenetic pace the degree of competition in 15 – 75 kVA and 75.1 – 375 kVA segments is expected to increase considerably with several new players – domestic and international – venturing into the market.

 

Assuredly these are busy times for the participants in this engines and generators space. In such a scenario product positioning and service strategies which offer additional value can help secure business advantage. It would be instructive to know what some of the major players in the business are doing.

 

 

 

PLAYER PUSH

 

Market leaders like Kirloskar Oil Engines Ltd have gone aggressive in keeping with the government's emphasis on clean energy gensets launching as many as five new fuel-efficient products catering to small and medium businesses. The company also rebranded itself as KOEL Green, and with a revamped motto of 'Efficiency Integrated' introduced gensets ranging from 2 kw to 5 kw in both petrol and diesel versions which are 5 per cent more fuel-efficient. The company has a 34 percent share of the 200,000-genset worth Rs.7,000 crore annual market and expects substantial growth this year on the back of strong market demand in areas of power deficit. Kirloskar Oil Engines Ltd (KOEL) plans on selling its power generation sets in the US, the world’s largest market, and Indonesia amongst new geographies, in the bid to more than double exports by 2018. The Pune-based engines and gen-sets maker having recently invested `75 crore to help transition to CPCB 11 norms is now in a position to take its products to developed markets with more stringent emission norms. KOEL is having international markets on its radar and is planning to set up offices in the US and Indonesia during 2016.
Part of the $17 billion Cummins Inc., Cummins Generator Technologies India Limited which is a leading manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets and produces a range of AC generator brands like MARKON, STAMFORD and AvK – is also looking at prospects in segments such as rail, mining and marine. The company makes generator sets for power backup systems used by banks, restaurants and factories. Cummins India Industrial Business Unit manufactures a variety of engines operating on diesel, natural gas and dual fuel. The Industrial Business Unit of Cummins India caters to almost the entire gamut of diesel engine requirement for the industrial sector. Starting from 65 HP spanning up to 3500 HP, the offerings are meant to power the following markets segments - Construction, Mining, Compressors, Marine, Rail, Pumps, Gas Compression, Oilfields, Defence and Re-power. Cummins Industrial Business Unit has the unique advantage of in-house facility to design value package systems for various applications.

 

 

Mahindra & Mahindra Ltd, the tractor and utility vehicle major which entered the field of power generation in 2002 today produces engines under the brand name Mahindra Powerol. The company has sold over 270,000 diesel generators and industrial engines since then. Mahindra Powerol has made rapid strides in the Indian genset industry in a very short span of time powering diesel generating sets from rating 5kVA to 500 kVA. Mahindra Powerol DG sets are the first choice of telecom majors like Airtel, Tata Tele, Vodafone, Nokia, BSNL and MTNL who use the same to support their communication networks across India. Besides telecom, Mahindra Powerol Diesel Generators and Industrial engines are attracting customers from a diverse cross-section of industries like banks, building and construction, public sector units, hospitals, hotels and manufacturing units among others. The company has recently launched B100 bio diesel generator sets for the Indian market.

 

 

Meanwhile with conditions improving in the market over previous years diesel generator manufacturer Sterling Generators, a Shapporji Pallonji company is looking to expand its footprint in the domestic market through its range of 10kva- 500 kva sets for small and medium enterprises, commercial establishments, offices and engineering facilities. Sterling which recorded revenue of `700 crore in the last financial year – it manufactures gensets at its Silvassa unit with an annual capacity of 10, 000 gensets and expects to see a topline of `900 crore for FY'16. The company exports to markets like Middle East, South East Asia, Australia and Africa.

 

 

Cooper Corporation has rapidly evolved into a globally acclaimed source of primary and standby electrical power gensets with incredibly advanced, yet economic solutions to the world’s demands for electric power. Decades of in-house research and strategic alliances with global partners such as Ricardo, UK, have culminated in the launch of Cooper Corp's ECOPACK series - a truly stand-apart genre of power generators which meet current and emerging emission norms. Powered alternately by diesel, LPG or CNG, these rugged, ready-to-go-on-demand masterpieces roar into life in seconds thereby enabling an instantaneous switch-over from regular to standby power mode. Available in gas as well as diesel variants with HPs ranging from 26 to 340, the engines find application worldwide in areas as diverse as gensets, agriculture, construction equipment, marine and automobiles. Cooper Corporation’s more recent tie up with Caterpillar, characterized by the former’s Chairman and Managing Director Farrokh Cooper as a ‘marriage with a Mughal’ which requires it to supply around 20000 gensets per year to the latter, has virtually catapulted the Satara based manufacturer into the big league of power generators.

 

Assuredly with the government looking to fast track projects the times ahead are expected to be busy for the power generators.

 

 

ENGINE INFO 
  • The Indian market can be divided into three segments namely the small diesel generators (15 – 75 kVA), medium diesel generators (75.1 – 375 kVA), and large diesel generators (375.1 – 2000 kVA).
  • Chronic power shortages and prolific growth in industries, infrastructure, telecommunication, information technology (IT), and IT enabled services has triggered growth in the market.
  • The total market in India is of 200,000 generators valued at `7000 crore.



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