Power rental refers to the renting of temporary power generation equipment, such as generators, transformers, and load banks, to meet the temporary power needs of various industries & sectors. The temporary power solutions are primarily used to provide backup power in emergencies, supplement power during peak demand periods, and support construction projects, industrial operations, events, and other activities that require a reliable & uninterrupted power supply. The market of the GCC energy industry provides flexible & cost-effective solutions for temporary power needs while reducing the capital expenditure & operational risks associated with owning & maintaining power generation equipment.
Market Insights & Analysis: GCC Power Rental Market (2023-28)
The GCC Power Rental market is projected to grow at a CAGR of around 13.67% during the forecast period, i.e., 2023-28. The market growth imputes to the rising demand for temporary power solutions in various industries such as construction, oil & gas, etc. Also, during the summers & the peak season, the non-availability of the national grid puts pressure on the grids in the major countries of the GCC, such as Saudi Arabia & the UAE, among others. Hence, to cater to the rising electricity demand, these energy rental solutions play a major role in the GCC region.
Additionally, real estate is one of the fast-growing sectors in the GCC region, paramount to the overall economic diversification plans of the government of Saudi Arabia, the UAE & Qatar. The government plans for diversification have benefitted various sectors such as hospitality, healthcare, education, commercial businesses, manufacturing, etc. This has created a positive economic outlook for the country & helped to attract Foreign Direct Investment (FDI) & government investment in real estate, thereby resulting in improved demand for them to enhance the operational activities during the construction period. For instance, the Government of Saudi Arabia signed an agreement worth USD2.66 billion in 2022 for setting up an investment fund for tourism, commercial and residential projects. Many of the under-construction real estate projects in Saudi Arabia are expected to promulgate the demand for these solutions in the forecast years.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2023-28|
|Region Covered||The UAE, Saudi Arabia, Qatar, Kuwait, Oman, Bahrain|
|Key Companies Profiled||ENERGIA, Aggreko, Byrne Equipment Rental, Sudhir Rental, Altaaqa Global, Hertz Dayim Equipment Rental, Energy Equipment Rental Co., Atlas Copco Rental, Saudi Diesel Equipment Company (SDEC), Modern Energy Pvt. Ltd., Rental Solutions & Services, and others|
|Unit Denominations||USD Million/Billion|
Moreover, the growing adoption of renewable energy sources is further generating the requirement for power rental solutions to support their integration into the power grid as the GCC countries are facing high pressure to reduce their dependence on fossil fuels. This is driven by various factors, such as rising concerns about climate change, the need to meet growing energy demand, and the desire to reduce reliance on volatile global oil prices. Renewable energy sources, such as solar & wind power, provide an attractive alternative to fossil fuels, as they are abundant, sustainable, and cost-competitive.
Additionally, the GCC governments have launched several initiatives & programs to promote the development of renewable energy sources. For instance, in 2021, Saudi Arabia launched the National Renewable Energy Program, which aims to generate 50% of the country's electricity from renewable energy sources by 2030. Along with this, the UAE has launched the Dubai Clean Energy Strategy, which aims to generate 75% of the city's energy from clean sources by 2050. Henceforth, the burgeoning government initiatives towards the adoption of renewable resource to meet the energy demand is anticipated to escalate the demand for power rental in the forthcoming years.
GCC Power Rental Market Key Driver:
Burgeoning Construction Activities Escalate the Need for Temporary Power Supply - Real estate is one of the rapidly growing sectors in the GCC region that is dominant to the overall economic diversification plans of the government of Saudi Arabia & the UAE, etc. The government of Saudi Arabia, the UAE, etc., is facing several challenges, especially in controlling the fiscal deficit, diversifying revenues, and minimizing dependence on oil. Therefore, to mitigate the dependence, the government is investing & encouraging infrastructure development, such as the construction of hotels, theme parks, art galleries, metro lines, and others.
The development of the hospitality sector is aided by expanded tourism demand, as Saudi Arabia welcomes millions of pilgrims each year. According to the World Tourism Organization, over 18 million tourists traveled to Saudi Arabia in 2022, making it the most visited country in the Gulf region. Therefore, to further aggrandize tourism in the country, the government is largely focusing on building hotels & leisure attractions. Thus, the construction of hotels & various real estate projects is presumed to augment the demand for power rental in the GCC during the forecast years.
GCC Power Rental Market Possible Restraint:
Stringent Government Regulations on Carbon Emission to Impede the Market - Stringent government regulations on carbon emissions have a significant impact on the Diesel Generator Power Rental industry. These regulations are planned to reduce the number of greenhouse gases emitted by power generators, including diesel generators, to mitigate the effects of climate change. As a result of these regulations, diesel generator rental companies, are required to invest in new technologies & equipment to reduce carbon emissions. It could inflate the cost of operation & make diesel generators less competitive compared to other power sources, such as solar or wind. Hence, diesel generator rental companies explore alternative power sources, such as renewable energy, or invest in newer, more efficient diesel generators that meet stricter emissions standards, which would hamper the demand for existing diesel generators, further impeding the market growth in the years ahead.
GCC Power Rental Market Growth Opportunity:
Positioning of GCC Region as an Event Hub to Promote the Market - GCC countries, such as Saudi Arabia, the UAE, and Qatar, have long been a global hub for hosting & organizing major international events. With the rise of the UAE & Qatar as event hubs, the number of power rental companies such as Hertz Dayim Equipment Rental, Saudi Diesel Equipment Company (SDEC), and others have augmented. The rental power providers can offer a cost-effective solution to meet this growing demand, especially during peak usage periods or in remote locations. Major sporting events, such as football matches & motorsports events, require a reliable power supply for broadcasting, lighting, and other purposes. This equipment can provide the necessary backup or supplemental power to ensure uninterrupted broadcasting & event operations.
Moreover, the upcoming large number of events represents a great opportunity for power rental companies & to capitalize on these opportunities, as well as the UAE government is pushing its capabilities to boost the number of events held in the country each year. For instance, the DBE (Dubai Business Events) captured around 120 events in 2021 and now plans to capture over 400 global events in 2025. Hence, the GCC government's ambitious targets would present a lucrative opportunity for the providers & encourage market growth in the future.
GCC Power Rental Market Key Trend:
Escalating Government Investment in Renewable Energy - In recent years, the rising government initiatives to increase renewable energy capacity to reduce dependence on fossil fuels. This has led to a rise in the demand for rental power solutions to bridge the gap between the intermittent nature of renewable energy sources & the constant requirement for electricity. The construction of renewable energy infrastructure requires significant investment, and power rental solutions are used throughout the construction phase to provide temporary power until the permanent infrastructure is completed.
Furthermore, renewable energy sources can cause fluctuations in the grid due to their intermittent nature, which can affect the stability of the grid. Moreover, these solutions are mainly used to provide additional power during periods of high demand & help stabilize the grid. Hence, the rising government initiatives toward the construction of renewable plants are further anticipated to propel the demand for power rental solutions in the forecast periods.
GCC Power Rental Market (2023-28): Segmentation Analysis
The GCC Power Rental Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028 at the regional, and national levels. Based on the Equipment Type, and End Users the market has been further classified as:
Based on Equipment Type:
The Generator segment held a noticeable share of the GCC Power Rental market in 2022 due to the increased demand for generators for power generation across a large number of industries, including manufacturing, oil & gas, construction, government sector, etc. Furthermore, the higher power efficiency provided due to the elevated compression ratio in engines by the respective diesel generators over their gas counterparts is expected to upgrade the demand graph of the market in the coming years. However, with the stringent regulations concerning carbon emissions by diesel generators, many of the project developers have started shifting towards gas generators to reduce their carbon footprint. Hence, it is presumed that the generator segment would contribute to influencing the market growth during 2023-28 due to the high emergence of gas generators.
Based on End Users:
Oil & Gas sector has a crucial relevance in the GCC economy due to its high share in government revenue. With the growing demand for crude oil across the globe, the government of Saudi Arabia & the UAE has emphasized the need to explore new oil & gas fields as well as enhance the existing crude oil extraction & purification capacity. Furthermore, with the increased international prices of crude oil & gas, the fossil fuel sector has immensely benefitted in 2021 & 2022. According to the Organization of Petroleum Exporting Countries (OPEC), crude oil prices increased from 2020 to 2023 from USD41.47 to USD81.85.
Also, oil & gas exploration & production often take place in remote locations with limited or no access to the grid. Hence, generating the requirement for off-grid power solutions, such as diesel generators, to power the operations, as power rental companies provide temporary power solutions for these remote locations. Along with this, the UAE, Kuwait, etc., has discovered untapped new oil & gas reserves in recent years, which has positively impacted the demand for these solutions. Hence, the ongoing research & developments related to the discovery of new oil wells in the region would lead to market growth during the forecast period.
GCC Power Rental Market Regional Projection
Geographically, the market expands across:
Of all the countries, Saudi Arabia is projected to attain a significant market share during 2023-28. Apart from many factors supporting the market growth in the past years, the absence of one single national grid supplying power to the whole country in Saudi Arabia is the most prominent one. In the summer season, the non-availability of the national grid puts pressure on the grid manufacturers during peak electricity demand in the major regions of the kingdom.
Also, real estate is another rapidly growing industry in Saudi Arabia, as the government, under its Saudi Vision 2030, announced to boost in the share of residential home ownership. According to the government, the homeownership rate in Saudi rose from 47% in 2017 to 60% in 2020. Some other projects are also under construction, which would further promote residential construction, subsequently promulgating the demand for power rental among the various construction developers to ensure operational efficiency in the forthcoming years.
GCC Power Rental Industry Recent Developments
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Frequently Asked Questions
A. The GCC Power Rental Market is expected to grow at a CAGR of around 13.67% during 2023-28.
A. Oil & Gas is the dominating end-user in the GCC Power Rental Market.
A. The burgeoning construction activities to drive the GCC Power Rental Market during 2023-28.
A. The top players in the GCC Power Rental Market are ENERGIA, Aggreko, Byrne Equipment Rental, Sudhir Rental, Altaaqa Global, Hertz Dayim Equipment Rental, Energy Equipment Rental Co., Atlas Copco Rental, Saudi Diesel Equipment Company (SDEC), Modern Energy Pvt. Ltd., Rental Solutions & Services, and others.
A. The escalating government investment in renewable energy is the key trend in the GCC Power Rental Market.
A. The stringent government regulations on carbon emission to impede the GCC Power Rental Market.
GCC Power Rental Market Research Report (2023-2028) - Table of Contents