GAS GENERATOR MARKET - GROWTH TRENDS & FORECASTS 2023 - 2030
A gas generator, often known as a gensets, is a reliable and sustainable source of energy that converts fuel into electricity. Gas generators are used to provide electrical power during blackouts, brownouts, and other power outages. The most popular type of generator is a gas generator, which is built for maximum electrical output while maintaining high reliability, availability, and low operating and service costs. Shale gas, biogas, natural gas, sewage gas, and landfill are all examples of gases that can be used to power gas generators. The gas generator is used in many end-user industries like Industrial, commercial, and equipment.
WITH THE FALLING COST OF NATURAL GAS, THE USE OF NATURAL GAS ACROSS THE RESIDENTIAL SECTOR IS EXPECTED TO DRIVE THE GAS GENERATORS MARKET IN THE DOMICILE SECTOR.
The gas generator market is segmented by capacity rating (less than 75 kVA, 75-375 kVA, and above 375 kVA), End User (Industrial, Commercial, and Residential), and also by geography (North America, Europe, Asia-Pacific, South America, and Middle East & Africa), explains, by a key market analyst.
The gas generator market is expected to register a CAGR of more than 4.2% during 2022-2027. The COVID-19 pandemic had a negative impact on the gas generator market across the world due to the reduction in power demand, mainly from customers in the industrial and commercial sector, as many manufacturing plants and retail businesses were closed during the Covid lockdown. Factors such as increasing awareness regarding natural gas as a clean and reliable fuel, increased concerns over diesel maintenance and refuelling issues, decreasing natural gas fuel prices, and the general desire to be more environmentally-responsible have supplemented the demand for gas generators in recent years.
Moreover, to counter the high-pollution emission risk, several countries have been implementing stricter emission norms pertaining to diesel generator emissions and are promoting the usage of eco-friendly gas generators. However, the lack of gas grid connectivity via pipeline, resulting in hindered fuel supply, is expected to act as a challenging factor to overcome the gas generators market in the coming years. Below 75 kVA capacity generators are estimated to have the largest market share during the forecast period, supported by the increase in demand from telecom, retail, and other commercial buildings and residential sectors. The commercial and industrial sectors of the emerging economies, the residential sector of developed economies, and the increasing need for power in defense operations are expected to create significant opportunities for market participants in the near future. North America is expected to be the largest market during the forecast period for gas generators, with the majority of the demand expected to come from the United States and Canada. Less than or equal to 75 kVA gas generators are used in the telecommunication sector, commercial complexes, small restaurants, small-scale industries, and petrol stations, primarily as backup power in grid-connected areas and as the main power source in off-grid areas.
Power To Gas Market Analysis
The Power-to-Gas market size is estimated at about USD 36.2 million by the end of this year, registering a CAGR of more than 50% during the forecast period.
COVID-19 negatively impacted the market in 2020. Presently, the market has reached pre-pandemic levels.
- 1. Over the long term, the major driving factors of the market were increasing decarbonization to reduce the impact of greenhouse gases on the climate and reduction in the cost of electricity with the advent of renewable energy sources.
- 2. On the flip side, high initial costs to set up power-to-gas plants and the need for additional transportation pipeline infrastructure in underdeveloped and developed economies for methane or hydrogen is expected to slow down the market growth.
- 3. Increasing initiatives in developing the infrastructure of green hydrogen in the emerging markets are expected to create vital opportunities for the power-to-gas market players soon.
- 4. Europe is expected to dominate the power to gas market, with most of the demand coming from countries like Germany, France, and Spain.
Power To Gas Industry Segmentation
Power-to-Gas (P2G or PtG) is a technology that enables the conversion of electricity to gas (hydrogen or methane) through the process of electrolysis. The report also covers the market size and forecasts for the power-to-gas market across major regions. The report offers the market size and forecasts in revenue (USD Million) for all the above segments.
- 1. The Power-to-Gas Market is Segmented by Technology - (Power-to-Hydrogen, and Power-to-Methane),
- 2. Capacity - (More than 1000 KW, 100 to 1000 KW, and Less than 100 KW),
- 3. End-User - (Utilities, Industrial, and Commercial),
- 4. Geography - (North America, Europe, Asia-Pacific, South America, and Middle East and Africa).
Power To Gas Market Trends
Power-to-hydrogen includes a range of technologies that utilize electricity to perform electrolysis and split water into hydrogen and oxygen. When hydrogen is manufactured using renewable energy, it is called green hydrogen and can be used to store, transport, and utilize renewable energy. This helps minimize variable renewable energy curtailment from sources such as wind and solar, provides long-term storage and grid-balancing services via electrolyzed, and uses existing gas transmission infrastructure for transporting energy in the form of green hydrogen over long distances.
Additionally, nearly 350 projects with an aggregate capacity of 54 GW are currently under development and expected to come online by 2030; 40 other projects accounting for almost 35 GW capacity are in the early stages of development. If all planned projects are commissioned within time, it is expected that by 2030, the global green hydrogen supply from electrolyzed could reach 8 million tons per year.
The green hydrogen produced by electrolyzed can also be used directly as a fuel for transport, replacing oil in light vehicles, railways, and marine applications, or as a feedstock for industrial applications. Green hydrogen fuel cells can also be used for energy storage.
The technology offers advantages over current energy storage technologies, such as higher power storage capacity and longer discharge times. Hydrogen can also be injected directly into natural gas grids. However, due to safety and technical concerns, hydrogen injection is subject to regulations and varies from country to country. For instance, the limit of hydrogen in natural gas grids in the United Kingdom is 0.1%, while it is 12% in the Netherlands.
Due to the falling costs of renewable energy technologies like solar and wind, energy storage technologies like power-to-gas (PtG) technology are becoming increasingly attractive. The installed capacity of commercial electrolyzed systems has been growing steadily over the past few years. There are only a few commercially viable water electrolysis technologies, and the two most widely used technologies are alkaline water electrolysis (AWE) and proton exchange membrane (PEM) electrolysis.
Therefore, owing to the above factors, the power-to-hydrogen segment is expected to be the fastest-growing segment over the forecast period
Europe to Dominate the Market
As of 2021, Europe was one of the largest regions in the power-to-gas market. Increasing investments and funding grants by governments in the region are driving the market.
In 2021, according to the European Commission, the refinery sector accounted for 48% of the hydrogen consumption, followed by the fertilizers and chemical sectors.
Germany is one of the major countries in the European power-to-gas market. As of 2020, Germany was home to around 40 small power-to-gas pilot projects that harnessed surplus green power, mainly from wind and solar projects, to carry out electrolysis by splitting water into oxygen and hydrogen to produce zero-carbon fuel.
According to Deutscher Verein des Gas- und Wasserfaches (DVGW), Germany is planning to build a power-to-gas capacity of 5 GW by 2023 and 40 GW by 2050 as it seeks to develop zero-carbon fuels for homes, factories, and vehicles. Thus, such government targets are likely to boost the power-to-gas market in the region during the forecast period.
In January 2022, ThyssenKrupp Uhde Chlorine Engineers signed a supply contract with Shell for the large-scale project Hydrogen Holland I in Rotterdam, Netherlands port. Under the agreement, ThyssenKrupp Uhde will engineer, procure, and fabricate a 200 MW electrolysis plant based on their large-scale 20 MW alkaline water electrolysis module. The first construction work for the electrolysers that has begun with Shell’s final investment decision (FID) to build the project is expected at the end of 2022, after which the intended start of production will be in 2024.
After the commencement of the Russian-Ukraine war, as a part of the passed in May 2022, the EU aims to reduce overreliance on Russian gas imports by increasing renewable energy generation. One of the primary tenets of the plan is the 'hydrogen accelerator' strategy, which aims to produce 10 million tonnes and import 10 million tonnes of renewable hydrogen into the EU by 2030. As green hydrogen is renewable, the plan aims to support the EU's energy transition and help in the decarbonisation of many heavy industries.
SImilarly, in May 2022, the EU set up a target with European electrolyzed manufacturers and set up an industry-wide target of increasing Europe's electrolyser manufacturing capacity from 1.75 GW/year to nearly ten times to 17.5 GW per year by 2025.
