Indonesian Diesel Generator Market Research Report: Forecast (2025-2030)

Market Insights & Analysis: Indonesia Diesel Generator Market (2025-30):

The Indonesian Diesel Generator Market size was valued at around USD 486.43 million in 2024 and is expected to reach USD 1,055.28 million by 2030. Along with this, the market is estimated to grow at a CAGR of around 13.70% during the forecast period, i.e., 2025-30. The major factors behind the growth of the DG market in Indonesia include the high frequency of power outages and blackouts in the country, and the government initiatives, such as diesel blending programs to achieve sustainability, which increase the affordability of diesel generators among the population and thus contribute to the growth of the market. Indonesia, the largest palm oil producer, offers this as a simultaneous fuel with diesel to be blended as a combined fuel to achieve the goal of biodiesel blending in the country. Encouragement towards adopting biodiesel through the government’s support also enhances market growth.

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Moreover, the subsidies provided by the government on fuels, including diesel, have contributed to the growth of diesel generators. For instance, a fixed per-liter subsidy on diesel is provided by the Indonesian government to cover the gap between the cost of supply and the administered retail price. Various trends in this market involve the technical innovations that have led to the combination of diesel generators with the photovoltaic system. Such a type of hybrid approach uplifts the diesel generator market due to the eco-friendlier option.

The rapid increase in tourism influx leads to a rising number of infrastructure developments in the country. The requirement of a continuous power supply to maintain the continuity of the developmental projects increases the demand for DGs. Thus, these types of diesel generators, which are the prime source of electrical supply, are leading the market growth. Also, the sale of standby and peak-shaving types of DGs is limited to small-scale sectors, such as residential or small shops. However, the rising fuel prices and high operational costs of diesel generators may pose a deterrent to the growth.   

Thus, unreliable grid power, increasing developmental projects, government support, and high demand for reliable power solutions have all contributed to the growth of the DG market in the country, and this growth is poised to continue in the forecast period as well.

Indonesia Diesel Generator Market Driver:

Blackouts & Frequent Power Outages Drive Market Growth – The growth of the market is driven by the repeated power outages in the country. The long-lasting blackouts are due to natural calamities and underdeveloped power systems in most regions of Indonesia. Also, the catastrophic events occur due to the third-largest coastline of Indonesia, which is about 80,000 km, increasing the risks of cyclones, hurricanes, and floods. Thus, the residents are highly dependent on fuel-based generators, providing them with an affordable and cheaper option for power backup plans during frequent power outages. Also, the unreachable zones in the rural population lead to a limited power supply in the villages of the country. For instance, as per a UN report (2021), millions of citizens receive only 12 hours of electricity per day, residing in semi-urban areas of Indonesia, and account for more than 40% of the total population. Thus, uneven power supply in semi-urban areas and frequent disruptions in electricity are driving high demand for diesel gensets in the country, and this demand shall continue in the forecast period as well.

Indonesia Diesel Generator Market Opportunity:

Encouragement of Biodiesel Via Government Initiatives – The government support for mandating biodiesel blending offers significant growth in the Indonesian Diesel Generator market. The highest global mandatory biodiesel blending rate, B35, was achieved by Indonesia in 2024, with more than USD1.5 billion invested by the government. Also, the testing for biodiesel blending B40 for 2025 has already started in 2024 in Indonesia. B40, blended diesel with biofuels, consists of 60% diesel and 40% palm oil, for different purposes, including electricity production using generators. Encouragement by the Indonesian government to further extend the plan by achieving a 50% blended rate by 2028 has contributed to the rising demand for diesel generators.

This blending project aims to reduce the environmental hazards caused by carbon emissions after burning fuels. Also, the initiative aims to decrease diesel imports from other countries. This, in turn, will generate demand for gensets based on biofuels, especially biodiesel, and hence will serve as an opportunity in the forecast period for the diesel generator market to grow.

Indonesia Diesel Generator Market Challenge:

High Initial & Operational Costs Hinder the Market Growth – Fluctuations in fuel prices have increased the costs of diesel in the country. For instance, as per the Global Petrol & Diesel Prices (2025), diesel currently costs about USD0.86 per liter, approx. 117% more than in 2022. It created an obstacle to the growth of the DG market. Also, the government has started reducing the subsidized rates on fuels, including diesel.

As per the World Bank report (2024), the subsidies on diesel have been set to be reduced by 50% in 2020. Ultimately, diesel prices have risen, and this has led to high operational costs for diesel generators. The maintenance costs of DGs and increased spare parts prices have also contributed to the hindrance of the market.

Indonesia Diesel Generator Market Trend:

Hybrid Diesel Technology Transforming the Market – The combination of diesel and photovoltaic cells approach is trending in the DG generator industry in Indonesia. The focus of the companies is on reducing reliance on pure diesel-based generators, which has facilitated the trend of a hybrid approach in the market, due to the eco-friendliness that it offers.

The growth is also driven by the cost-effectiveness and reduction in carbon emission rates by using the hybrid technique in diesel generators, which combines renewable energy sources, such as solar energy, battery storage systems, and diesel generators. For instance, as per the IOP Science Organization (2020), there was a reduction in the cost of energy after using the hybrid approach.

For example, the cost of using a hybrid diesel-photovoltaic power system was around USD0.15 per kWh, and that of a traditional one was about USD0.19 per kWh. Hence, the hybrid approach is the new trend that is slowly penetrating the DG market, and the demand for hybrid technology-based generators shall continue in the forecast period too.

Indonesia Diesel Generator Market (2025-30): Segmentation Analysis

The Indonesia Diesel Generator Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2025–2030 at the national level. Based on the analysis, the market has been further classified as:

Based on End Users:

• Residential
• Commercial
• Healthcare
• Government & Transport
• Industrial
• Equipment rental companies
• Construction
• Mining
• Oil & Gas

Out of these, the commercial segment holds the largest share of the market, which is about 28%. The rising growth of DGs is led by the surging expansion in the commercial sector of the country. In 2024, Indonesia witnessed high growth in its commercial construction with the development of modern retail spaces in Jakarta, Bandung, and Surabaya. In Jakarta, there are almost 7,00,000 sqm of offices under construction, which determines high demand for substantial units of DG. In Bandung, an e-fishery office was developed in 2023 with more than 14,700 square feet of area. To provide a continuous power backup supply in such spaces, DGs are required. As per AMA energy, 750.1 kVA to 1,000 kVA DGs are employed in commercial settings like malls, hotels, and hospitals, and a 2,000 kVA – 2,500 kVA diesel generator is ideal for huge office complexes and Skyscrapers as a consistent backup power supply source.

 Additionally, expansion in the Indonesian healthcare sector leads to a high demand for Diesel Generators. For instance, as per the Organization of Centre for Social and Economic Process (2022), there was a significant increase in the number of inpatient beds over the past decade, from 0.6 beds per 1,000 patients in the year 2000 to nearly 1.4 beds per 1,000 people in 2022. As per the World Construction Network (2023), there were almost five big under-construction hospital projects in the country. Several medical equipment, such as ventilators, heart monitors, and imaging equipment, require a continuous supply of power for efficient patient care, specifically in countries like Indonesia, where power disruption is a major challenge, thus determining the dominance of this segment in the DG market.

Based on the kVA Rating:

• Up to 20 kVA
• 20.1 kVA to 75 kVA
• 75.1 kVA to 375 kVA
• 375.1 kVA to 750 kVA
• 750.1 kVA to 1,000 kVA
• Above 1,000 kVA

Among these, the 75.1 kVA to 375 kVA segment leads the market with a share of around 35%. The growth is powered by the high demand for continuous power supply for the smooth functioning of industries and commercial establishments in the country, which have been in expansion mode for the past few years. The government is investing in the development of the infrastructure sector in the country. For instance, the Golden Vision 2045 aims to enhance the economy of the country. This vision shall further boost the power infrastructure and backup solutions in the country.

The rubber manufacturing industry is widely expanding in Indonesia, especially in Sumatra. As per Indonesia Investments (2024), the rubber production rate has increased from 1 million tons in the past decade and reached more than 2.5 million tons of production capacity per producer annually. Additionally, car manufacturing has also expanded and witnessed more than 30% growth from 2021, with 1,121,967 units, to 2022, with about 1,470,000 units. These manufacturing industries require a continuous power supply for processing and production, operate assembly lines, especially in areas with an unreliable power grid. Also, the high growth in commercial infrastructural development like retail spaces, hospitals, etc., due to increased government investment and support in these sectors, is contributing to the usage of high-range DGs.

The 4.0 Plan also includes the development of 100 Smart cities, which will require a highly rated common power backup source in the residential areas. Further, an increase in small-scale and medium enterprises in the country is also raising the demand for Diesel generators. Thus, these factors are determining the high dominance of this segment in diesel generators in the country, and this dominance is expected to further increase in the forecast years due to major commercial and residential under-construction projects ongoing in the country.

Indonesia Diesel Generator Industry Recent Development:

• 2024: Cummins Inc. launched two new diesel generators called C1750D6E and C2000D6E to offer more sustainability and efficient power generation, having QSK50 as the latest engine.
• 2024: YANMAR Marine International launched the new HGY series Generators, which aim to achieve net-zero carbon emissions and high specific power densities for environmental safety.

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