UAE Diesel Generator Market Research Report: Forecast (2023-2028)
Market Insights & Analysis: UAE Diesel Generator Market (2023-28)
The UAE Diesel Generator market is projected to grow at a CAGR of around 8.08% during the forecast period, i.e., 2023-28. A diesel generator is the combination of a diesel engine with an electric generator to generate electrical energy. The main components of diesel generators include a diesel engine, an AC alternator, a fuel tank, a control panel, and a radiator. These generators are used either as a power backup system or as a prime electricity source. This is owing to the growing deployment of diesel generators in various sectors, such as oil & gas, hospitality, healthcare, industrial, residential, etc., to provide unhindered power flow in the case of a power outage. The growth in these allied industries of diesel generators is due to the surging foreign direct investment (FDI) in the country.
|Study Period||Historical Data: 2018-21|
|Base Year: 2022|
|Forecast Period: 2023-28|
|Region Covered||Dubai, Abu Dhabi & Al Ain, Sharjah & Northern Emirates|
|Key Companies Profiled||Caterpillar Inc., Cummins Middle East FZE, FG Wilson Engineering FZE, PR Middle East FZE, Rolls Royce Solution Middle East FZE, Himoinsa Middle East FZE, Atlas Copco Middle East FZE, MHI Engine Solution Middle East FZE, Saudi Diesel Equipment Co. Ltd., JCB and Others|
|Unit Denominations||USD Million/Billion|
The real estate construction, manufacturing industries, mining & quarry exploitation, and establishment of IT companies are some of the major recipients of the FDI in the UAE. Along with this, based on Federal Decree-Law No. 26 of 2020, the government has allowed 100% ownership for foreign companies in the establishment & operation of manufacturing & services industries in the country. Moreover, the UAE continues to be a popular destination for mining owing to the availability of rich resources like copper, gypsum, aluminum, limestone, etc., contributing significantly to the country’s economic development. For instance:
Thus, the ongoing mining activities & the government's future expansion plans would propel the demand for these generators during the forecast period for the operation of equipment & machinery at the mining sites. Additionally, the presence of extensive crude oil reserves in the country is one of the driving factors boosting the deployment of these generators in the UAE. Diesel generators are deployed at various locations of the offshore, onshore, and refining sites to ensure the continuous power supply for operating the machinery. Further, the ongoing process of increasing the crude oil & natural gas production in the country is anticipated to boost the market during the forecast period.
UAE Diesel Generator Market Key Driver:
Growing Expansion of Data Centers to Augment the Demand - The surging need to manage & back up large amounts of data & information by small, medium, and large businesses across the UAE is mounting the adoption of cloud-based technologies, thereby augmenting the demand for data centers. The constant need for electricity to power HVAC equipment, servers, and routers in the data centers resulted in a heightened demand for generators. Further, the growth of internet-based companies like E-commerce & OTT in the UAE has also driven the demand for cloud services to host data. These internet-based industries relying on data centers cannot afford to lose business due to power outages. Thus, the immense need for constant power to operate data centers efficiently drives the demand for these generators in the country.
Moreover, the ongoing digital transformation in government & public offices has notably contributed to the need for localized data centers to maintain the privacy of government data. This has led to the expansion of companies like Microsoft, Oracle, etc., to set up data centers to cater to the cloud service needs of the government & enterprises present within the UAE. Thus, this notably boosted the requirement for these generators in the data center to power HVAC, servers, and other electric equipment. Therefore, the digital transformation & changing technological landscape in the UAE is estimated to escalate the demand for diesel generators in data centers as a constant power backup source during the coming period.
UAE Diesel Generator Market Possible Restraint:
Vulnerability to Supply Chain Disruptions to Impede the Market - The diesel generator industry of the UAE is highly dependent on imports owing to the low presence of OEMs of gensets & their sub-components in the country, which has made the nation reliant on the supply from other nations. This has made the UAE market vulnerable to supply chain disruptions caused by pandemics, wars, etc. Thus, the occurrence of the COVID-19 pandemic, as well as restrictions imposed by the government largely disrupted the supply chain across the UAE, resulting in a dip in the market for diesel generators. The demand-supply gap has further been aggravated by the rising demand for generators from the ongoing & new construction projects announced after the pandemic. The long lead time in the delivery of the generators to the end consumers is still prevalent in the market and is expected to prevail till the end of 2023. Furthermore, the UAE economy being highly reliant on immigrants for skilled labor work makes the industrial sector involving the diesel generator industry vulnerable to a shortage of labor workforce, further hampering the growth of the diesel generator market in the UAE.
UAE Diesel Generator Market Growth Opportunity:
Expansion of SMEs (Small & Medium Enterprises) in the UAE - SMEs have always played a vital role in enhancing the demand for diesel generators in the UAE. Initiatives of the UAE government, like the Mohammed Bin Rashid Establishment for SME Development and Khalifa Fund, have continuously brought new schemes that supported SME growth in the country. The growth of SMEs & other industrial units in the country has boosted the demand for these generators as these industries require diesel generators for power backups. The UAE receives constant government support accounting for approximately 350,000 small & medium enterprises (SMEs), which jointly raised the requirement for these generators for improved power backups in these SME facilities. Since SMEs have acted as a crucial part of the country’s commercial sector growth, the government is introducing new policies to boost the commercial sector, further expanding the funding & incentives for manufacturers to flourish in the UAE.
Moreover, the UAE government is planning to further advance the growth of new SMEs in the country, with the launch of new initiatives such as ‘Make it in the Emirates’ & the ‘Competitive Knowledge Economy Vision 2021’. According to the Ministry of Economy, the Entrepreneurial Nation 2.0 initiative aims to develop more than 8,000 SMEs & start-ups by 2030. The government’s plan to boost SMEs in the UAE is driving the growth of new enterprises. Hence, with the rising expansion, the need for these generators is anticipated to supplement, owing to the imperative requirement for continuous power backup to ensure efficient business operation.
UAE Diesel Generator Market Key Trend:
Adoption of Diesel Generator with Liquid Cooling System - With the advent of advanced engine alterations, improved fuel treatment systems, and digital controls, smart diesel generators have become increasingly popular among UAE customers. The digital control panel in these generators helps the operators to precisely monitor the operations, due to which consumers get better performance & low maintenance cost. Along with this, the digital representation of fuel levels, coolant levels, and engine oil levels in the control panel of these generators provides a better user interface, leading to increased adoption of these advanced diesel generators in the UAE.
The trend of adopting smart generators has risen in recent years due to the inclination of customers towards digitally connected & IoT-enabled generators for better productivity & outcome. Many manufacturers are partnering with smart solution providers to cater to the emerging demand. For instance, in 2021, Trinetra, a smart service provider, collaborated with a generator manufacturer in the UAE to automate their process & reduce manual intervention to a minimum.
Hence, the demand for these smart monitoring-enabled diesel generators is boosting in the UAE due to the convenient control system it provides for monitoring & managing these generators via mobile phones. Further, consumers in the country are considering smart monitoring system-enabled generators as they are more energy efficient than conventional ones due to their automation process. Hence, the growing digital inclination of consumers would notably carry forward the trend of adopting smart generators in the upcoming years.
UAE Diesel Generator Market (2023-28): Segmentation Analysis
The UAE Diesel Generator Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028 at the national levels. Based on the Type, and End Users the market has been further classified as:
Based on Type:
Among these, Standby diesel generators are witnessing notable market growth in the UAE Diesel Generator market due to its role of providing automatic power supply during power outages in the industrial & commercial sectors. Thus, diesel generators of this type are widely used in healthcare, utilities, manufacturing, rental, telecommunications, government, and transportation sectors, where any disruption of power supply is not acceptable.
In response to the growing demand for standby diesel generators by industrial and commercial sectors, leading manufacturers of diesel generators, including Cummins, Caterpillar, Mitsubishi, etc., are increasingly developing cost-effective & efficient standby diesel generators for smooth operations. Thus, the growing demand for standby uninterrupted power supply to the various sectors is anticipated to increase the sales of standby diesel generator models in the forecast years.
Based on End Users:
Of these, the Commercial segment is becoming a major source of demand for diesel generators in the UAE owing to the rapid construction of commercial buildings such as corporate offices, hypermarkets & supermarkets, shopping malls, etc., which require these generators for an optimum power supply. These sectors are majorly benefitting from the surging government initiatives to strengthen the non-oil economic sectors, such as tourism, e-commerce, IT industries, manufacturing facilities, etc.
Additionally, the launch of government initiatives like Abu Dhabi Economic Vision 2030, which aims to increase the tourist influx in the country, are leading to growth in the commercial sector. The surge in the construction of malls, resorts, and other tourist attractions places in the country has also contributed to the GDP through the tourism sector. Hence, the market is projected to grow steadily during the forecast period due to the surging expansion of the commercial sector in the UAE.
UAE Diesel Generator Industry Recent Developments:
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Frequently Asked Questions
A. The UAE Diesel Generator Market is expected to grow at a CAGR of around 8.08% during 2023-28.
A. The growing expansion of data centers is expected to drive the UAE Diesel Generator Market during the forecast period.
A. Caterpillar Inc., Cummins Middle East FZE, FG Wilson Engineering FZE, PR Middle East FZE, Rolls Royce Solution Middle East FZE, Himoinsa Middle East FZE, Atlas Copco Middle East FZE, MHI Engine Solution Middle East FZE, Saudi Diesel Equipment Co. Ltd., and JCB are the top players in the UAE Diesel Generator Market.
A. The commercial sector is the leading end-user in the UAE Diesel Generator Market during 2023-2028.
A. The adoption of diesel generators with liquid cooling systems is the key trend shaping the growth of the UAE Diesel Generator Market
A. Residential, Commercial, Healthcare, Government & Transport, Oil & Gas, Industrial, and Equipment Rental Companies are the industry's potential end-users.
A. The expansion of SMEs (Small & Medium Enterprises) is the growth opportunity driving the UAE Diesel Generator Market through 2028.
UAE Diesel Generator Market Research Report (2023-2028) - Table of Contents