Power Rental Market Benefits from Global Increase in Consumption

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--According to Globaldata, revenue in the global power rental market is expected to increase from $4 billion in 2012 to $8.5 billion in 2020, at a compound annual growth rate (CAGR) of 10.2%. This growth will be driven by an increase in electricity demand worldwide.

Currently, the U.S. has the highest market share in the sector at 19%, followed by China and Saudi Arabia with 18% and 16%, respectively. By 2020, China is expected to take the lead with a market share of 17% and an increase in revenue from $720 million in 2013 to $1.4 billion, representing a CAGR of 10.7%. Over the same period, the U.S. will experience a drop in market share to 14%.

"The substantial growth that we expect to see in the power rental market over the coming years will be due primarily to an increase in power consumption, which will almost double from 13,044 terawatt-hours (TWh) in 2000 to 27,496 TWh in 2030," said power analyst Sayani Roy.

"Furthermore, the poor transmission and distribution (T&D) network in many countries, as in China's case, will provide a substantial boost for the market, as the low availability of power will result in the greater dependence of end consumers on rental power."

There are still a number of barriers that hinder growth in the market, such as a lack of consumer awareness about the benefits of renting equipment, as opposed to purchasing it, and the significant financial backing companies need to enter the power rental business.

Emission regulations also could pose a significant challenge to the power rental market, which is dominated mainly by diesel-powered generators.

"However, since rental companies have started offering gas-powered equipment, which boast very low emissions and are currently a preferred source of electricity generation, the impact of this restraint is expected to remain medium to low during the forecast period," Roy said.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.