Power Generation

Caterpillar ... one of the major players in Saudi Arabia's diesel genset market.

Caterpillar ... one of the major players in Saudi Arabia's diesel genset market.

Saudi genset market to ‘surpass $700m’

September 2015

Buoyed by the surge in the projects sector, the Saudi genset market has seen remarkable growth with a 13.55 per cent annual increase forecast for 2015-21.

The market for diesel gensets in Saudi Arabia recorded healthy growth during 2010-14 and is expected to witness an upward trend over the next six years amidst a booming construction sector, according to two research reports.

Global management consulting firm TechSci Research’s report, ‘Saudi Arabia Diesel Gensets Market Forecast and Opportunities, 2020’, indicates that the market for diesel gensets in Saudi Arabia is forecast to surpass $700 million by 2020.

“With the country anticipated to witness a robust increase in infrastructure expansion and development projects in the residential, commercial and manufacturing sectors in the coming years, there is a need for a consistent and reliable source of electricity. This, along with the increasing government focus on reducing dependence on oil through investments in non-oil sectors, is forecast to propel demand for diesel gensets in the country from various end-user sectors over the next five years,” the report says.

It further says that the increasing urgency to meet the surging demand for reliable and seamless electricity supply is expected to propel growth in the country’s diesel gensets market through 2020.

“The highest demand for diesel gensets in the country is forecast to emanate from the Eastern and Northern and Central regions, due to the large number of major residential, commercial and manufacturing facilities in these regions.”

In 2014, these areas of Saudi Arabia accounted for around three-fourths of the overall demand for diesel gensets.

The residential sector, which accounted for the lion’s share of the country’s diesel gensets market in 2014, has been growing consistently in Riyadh and Jeddah.

“Saudi Arabia’s diesel gensets market is projected to witness moderate growth on account of the steadily rising demand from end-use sectors.

“In addition, the implementation of stringent environmental regulations is expected to increase the demand for environment-friendly diesel gensets in Saudi Arabia through 2020,” says Karan Chechi, research director with TechSci Research.

A similar projection has been made by 6Wresearch in its report Saudi Arabia Diesel Genset Market (2015-2021) which forecasts the kingdom’s diesel genset market will grow at a compounded annual growth rate (CAGR) of 13.55 per cent during 2015-21.

“The demand for diesel gensets is expected to thrive on account of growing public infrastructure, industrial base, retail and hospitality sectors, and supplying power in remote areas,” it says.

The report cites energy and utilities as a contributing application in Saudi Arabia’s diesel genset market, where these are required to provide auxiliary or back-up power.

Unavailability of grid power in remote locations has resulted into an increased demand for diesel gensets, it adds.

Avishrant Mani, senior research analyst, Research and Consulting at 6Wresearch, points out that there is a growing trend in the Saudi market to lease diesel gensets. “Real estate companies deploy gensets on a rental basis at the construction sites to reduce the burden of high purchasing cost,” he says.

The major companies in Saudi Arabia’s diesel genset market include Saudi Diesel Equipment, Cummins, Caterpillar, Himoinsa Power, Atlas Copco, and Kirloskar.

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