Variable speed generators have proven to be beneficial for alternate energy sources like wind and hydro turbines where the power supply is constantly varying. The speed of the generators can be then adjusted to certain limits in order to provide constant voltage. Variable speed generators are majorly used in industries such as renewable power generation, hydroelectric power generation, mining and oil & gas, marine, and commercial and residential. Looking at the advantages of using variable speed generators, the global market is expected to grow at a significant rate in the coming years.
Market overview
The global variable speed generator market that was estimated to be worth USD 5.79 Billion in 2017 is projected to reach a value of USD 8.36 Billion by 2022, growing at a CAGR of 7.63% during the forecast period from 2017 to 2022.
Based on type, the permanent magnet synchronous generator (PMSG) segment is projected to grow at the highest CAGR over the forecast period, owing to the increasing adoption of PMSG technology for wind power generation as well as diesel-electric gensets.
Among end-users, the commercial and residential segment is expected to witness the highest growth in the coming years, mainly driven by the demand for variable speed standby gensets for commercial and residential applications, especially in Europe, Asia Pacific, and North America.
On the basis of prime mover, the IC engines segment is expected to grow at the highest CAGR during 2017-2022, mainly due to the increasing implementation of variable speed generators for aerospace and marine applications.
Based on power rating, the 1 MVA- 25 MVA segment is likely to witness the highest growth from 2017-2022, owing to the increased capacity addition in offshore wind projects and commercialization of high power rated permanent magnet synchronous generators, thus creating new revenue pockets.
How is the market progressing, geographically?
Among regions, the market for variable speed generator in Asia Pacific held the largest market share in 2017, and is also projected to dominate the market over the forecast period. Increased power consumption, government mandates on energy efficiency, rising influx of renewable sources in the energy mix, and renovation, modernization, and upgradation of aging hydropower plants are the factors driving the market towards growth. Moreover, increasing urbanization and industrialization in this region has also led to the higher demand for power. However, Europe is expected to be the fastest-growing market for variable speed generators over the forecast period. This growth is because of the countries in this region that are mainly focusing on the upgradation their aging electrical infrastructure. Moreover, the rising number of alternative energy programs, along with the European Union’s proposed stage V emission standards is expected to further tighten emission norms for non-road engines, thus boosting the growth of the global market for variable speed generators for wind power and diesel and gas-based variable speed gensets.
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What are the factors driving and hampering the market growth?
The growth of the worldwide market for variable speed generators is being primarily influenced by the following factors:
- Growing focus on alternative energy production across the world
- Increased government mandates over energy efficiency
- Growing industrialization and urbanization
In addition, strong growth in HVAC systems, increased applications in hybrid energy systems, and renovation, modernization, and uprating of outdated power infrastructure are the factors expected to further offer ample growth opportunities for the market.
However, high capital investment and limited re-investment are the major factors that are likely to hinder the growth of this market. Moreover, decreasing Greenfield investments in mining and oil & gas industry is the key challenge to be overcome by the leading players in this market.
Major companies and strategies adopted by them
The key players operating in the global market for variable speed generators include ABB (Switzerland), GE (US), Siemens (Germany), Wartsila (Finland), Cummins (US), and Rolls Royce (UK). Among all the strategies adopted, contracts & agreements was the most common strategy adopted by these companies, followed by new product launches, expansions and investments, and mergers & acquisitions. These strategies have helped companies to sustain in the market as well as increase their market shares.
