High power deficit coupled with significant economic growth potential will drive the growth of portable power market.
Portable energy solution plays a major role in verticals such as construction, mining, exploration and oil and gas. Most of the OEMs have launched new range of solutions with breakthrough technology with a focus on fuel efficiency, adaptability to specific application needs of the market; optimising operation and maintenance (O&M) cost, serviceability, and safety.
The portable energy sector has been passing through tough times due to various factors such as mining closures, slow infrastructure growth, inflation, interest rates, and global slowdown. However, the latest turnaround in industry trends like opening up of mines and reviving infrastructure activities have given renewed hopes to the industry.
In India, unlike globally, generators have no specific differentiation in terms of portable and stationary and hence it would be difficult to give any idea on the numbers on portable generators.
Going forward, the construction market is expected to grow with a CAGR of 5-6 per cent for 2015, while mining would not see much improvement based on the current market conditions. Expectancy would be around 2-3 per cent on mining for 2015. Though there is a positive trend in mining activities the real action will take some time. Reports indicate that the diesel generator (DG) capacity is growing at a rate of 5,000 MW to 8,000 MW every year. That is higher than the cumulative nuclear and solar capacities being added year-on-year in the country.
According to the report ´India Diesel Genset Market Forecast & Opportunities, 2019´, the market for diesel gensets in India is forecast to grow at a CAGR of around 10 per cent during 2014-19. The very high power rating and medium power rating diesel gensets are expected to contribute significantly towards boosting the market revenues over the next five years. The southern region of the country accounts for the largest share of diesel gensets demand on the back of high power deficit and inadequate power infrastructure.
Product and technology trends
As far as the products and technology trends are concerned, over the years, this industry has matured and now besides the initial investments, end-users do consider all other options. Also, in terms of generators, India is one of the few countries which have implemented the CPCB 2 norms with effect from July 2014 which translates into very stringent noise pollution policies. The gaps have really reduced and most of the companies have understood the need to go global and hence all good companies have adapted similar global designs suiting Indian requirements.
Customers are looking for cost and fuel efficiency in the product range. In line with the customer demand, DG manufacturers are adding new features to their product lines. For eg, DG sets from Kirloskar Oil Engines come with 3-10 per cent better fuel efficiency compared to competition, according to Sanjeev Nimkar, Vice President and Business Head, Power, Industrial and Service, KOEL.
Atlas Copco has introduced cost-effective products in the market to attract the customers. Elaborating on this, Ajit Kumar, Marketing Manager - Portable Energy, Atlas Copco Construction Technique, says, ¨We have introduced productive and cost-effective products in the market and we also worked on filling the product portfolio gaps to be able to meet the demands of more niche segments.¨
In India, diesel gensets with rating 5 KVA-75 KVA accounted for majority of the market share due to ease of availability, low cost and usage of these gensets in wide range of applications. This range is expected to maintain its market dominance through 2015-21, according to a research Report by Research & Markets. According to the report, India´s diesel market is highly consolidated, where top four players´ accounts for more than 65 per cent of the overall market share. In the forecast period, the trend is most likely to remain the same; however, higher competition in small rating segment is expected due to increasing number of unorganised players in the country.
With the global economy opening up and new initiatives from the Central Government, there is hope to see a positive impact not only on the Indian market growth but also the export market opportunities. Ajit Kumar is hopeful on the new government as he says, ¨With an expected stable government, we foresee all pending projects to get fast clearances which will increase the demand of air compressors.¨
Portable power equipment have specific applications in construction and mining sector.¨ In In the construction and mining sectors, portable power equipment is used for specific applications. In mining, the portable power is used for lighting equipment. When the construction work goes on at the sites where there is no power in the evening, portable power is used to light up the site. Normally, the project sites need power in two ways; one is to run some of the equipment at the site itself, so they go for bigger power sets of 250 kVA-500 kVA range. There is also the need for a smaller power source to support lighting towers,¨ says Nimkar.
The portable power sector is directly connected with availability of power in the country. ¨In some states we are seeing that the power scenario in the last 2-3 years has been improved but in some other states the scenario is not that good. The major reason for this improvement in power scenario is the slowdown in economy. So the power requirement for the industry was on the lower side. This led to improved power supply situation to the commercial and housing segments,¨ observes Nimkar. According to him, portable power segment is stable and it is not a growing market at the moment. ¨But this year we expect that the economy will turn the tide and it will be a better scenario for construction, road equipment, infrastructure, and manufacturing industries. These segments will start consuming more power and the deficit of power will go back to the normal scenario of 5-7 per cent deficit in the country which will indirectly boost the portable power segment,¨ he adds. Once the industry starts consuming power, there will be power deficit as there is no major addition of power plants in the last 2-3 years. So in the next 10 years, the requirement of portable gensets as well as the mainstream gensets will be good. Speaking on the compressor market, Ajit Kumar says, ¨Mining, construction and quarrying segments have not revived as expected post the formation of the government. But it has shown some revival in pockets. There is continued demand from our existing customers as well.¨
India faces a considerable gap between its power supply and demand, creating attractive markets for diesel genset manufacturers. The market for diesel gensets will considerably improve by 2020. High power deficits, coupled with significant economic growth potential, are expected to be the strongest drivers behind the expansion of this market.
PORTABLE POWER: FACTS
Once the industry starts consuming more power, there will be power deficit. So in the next 10 years, the requirement of portable gensets as well as the mainstream gensets will be good.