Power rental involves leasing generators, whether diesel or gas-operated, along with fully functional power equipment and various components for power plants. During power outages, rental power systems supply back-up power, keeping operations running. The demand is fuelled by the need for continuous power in the oil, gas and mining industries, and the growing need for electrification and rural power delivery due to ageing electricity infrastructure. Renting a generator offers numerous benefits to industries, manufacturing and commercial establishments. It ensures uninterrupted business operations during power outages caused by bad weather, brownouts, power cuts or blackouts. Industrial and commercial consumers often opt to hire generators for maintaining existing power supply systems, addressing the lack of grid infrastructure and meeting temporary power needs.
Renting allows the user to test a generator before buying, providing insights into its type, power and budget requirements. In addition, the installation is straightforward, with the rental company handling the set-up, thus removing the hassle for the end user. Maintenance is minimal as it is managed by the rental provider, eliminating the need to hire additional staff. Financially, renting is more economical, reducing initial investments and freeing up capital. It also provides flexibility, allowing to choose generators of varying sizes and power outputs tailored to the specific needs, including short-term or long-term projects. Typically, rental power solution contracts require an initial security deposit and a monthly rental fee based on the size of the power package. Buyers can negotiate more flexible long-term rental rates, whereas short-term rates are usually higher. The service provider does not include fuel for the diesel generator sets (gensets), so it must be supplied by the customer. Installation and transportation of rental power solutions may or may not be provided by the service provider.
The diesel segment currently holds the largest revenue share in the power rental market, driven by key players in the oil and gas, mining and manufacturing industries. The growing demand for diesel gensets is attributed to the readily available and cost-effective diesel fuel. As a result, the gas segment is anticipated to see the most significant growth in the coming years. Stricter regulations and environmental policies in various regions are expected to moderately enhance the market potential for gas generators. Broadly, the power rental market is segmented by power rating into four categories: below 75 kVA, 75-375 kVA, 375-750 kVA, and above 750 kVA. The above 750 kVA segment currently leads the market and is expected to maintain its dominance due to the essential need for emergency power in heavy-duty applications. Additionally, the demand for 75-375 kVA generators is growing rapidly, driven by the expansion of small industrial facilities and increasing construction activities, which are expected to boost the segment’s outlook.
The mining industry heavily relies on rental power as mining sites are often off-grid and depend on temporary gensets. Manufacturing businesses also use rental generators during maintenance, peak load demands or brief outages. Industries with unreliable grid power significantly depend on the expansion of the power rental market. The building and construction sector heavily depends on diesel gensets for powering activities such as foundation excavations, land levelling, road and bridge construction, concrete mixing, crane operations, borewell digging, on-site prestressed concrete production and welding. Additionally, the commercial real estate segment is expected to boost the demand for diesel gensets due to the growing need for office spaces and commercial establishments. Projects in various sectors often span multiple locations, making rental more convenient and cost-effective than transporting owned generators. The high cost of new generators and the growth of industries and manufacturing, coupled with the thriving commercial segment, is driving the power rental market.
Conclusion
The power rental market is poised for significant growth, driven by the increasing demand for reliable back-up power across various sectors. While diesel generators have long dominated liquid fuel-based back-up solutions, stricter environmental regulations and the rise of renewable energy are likely to reduce their prevalence. Despite this, the rental power market is expected to expand at a compound annual growth rate of around 9 per cent. Technological advancements, such as internet of things-based smart diesel gensets and hybrid generators, are enhancing efficiency and reducing environmental impact. The significant market potential is likely to attract new players, increasing competition and driving further innovation within the industry.
Manufacturers are enhancing generators to achieve better fuel efficiency, reduced emissions and higher power output. These improvements lead to lower operational costs and a smaller environmental footprint, making rental power solutions more appealing to customers. Additionally, integrating renewable energy sources such as solar panels, wind turbines and energy storage systems into rental power solutions creates hybrid power systems. These systems are more efficient, consume less fuel and emit fewer pollutants compared to traditional diesel generators alone.
Aastha Sharma