Demand for Backup Power Strengthens Diesel Genset Market in Central and Eastern Europe, Frost & Sullivan Reports

The mature diesel generator set market in Central and Eastern Europe will see steady growth as most industries in the region continue to rely on diesel gensets for backup power, according to a recent report by Frost & Sullivan. The report, Central and Eastern European Diesel Generator Set Market, finds that market revenues will reach $180.1 million in 2018 from $152.3 million in 2012, an 18.2-percent growth clip.

Poland, the Czech Republic and Romania will account for 73 percent of the total revenues, the report says. Romania especially offers large opportunities because of large infrastructure investments in the country.

“The increasing likelihood of widespread grid instabilities caused by the use of renewable energy sources in the grid will create demand for stand-by power applications and smart grid-compliant generating set technology in commercial and industrial sectors,” said Frost & Sullivan energy and environmental consultant Karsten Deubel. “Therefore, diesel generating sets will become popular as they can balance voltage dips due to their short ramp-up times.”

Conversely, renewable sources such as wind and biomass are cleaner alternatives and are preferred over diesel gensets, the report says. The need to comply with new emissions standards will lead to the construction of new coal- and gas-biomass power plants in Central and Eastern Europe. Nonetheless, the power-supply gap between the closure and erection of new plants will boost the uptake of diesel gensets in the mid-term.

The market faces additional challenges as the economic slowdown has compelled businesses to postpone projects while higher operating and maintenance costs, owing to rising fuel prices, discourage users. The popularity of second-hand gensets, often sold by rental companies, places pricing pressures on suppliers, the report adds. The entry of low-cost manufacturers looking to benefit from price-conscious end users will also lower profits of established vendors.

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