According to the latest market study released by Technavio, the global power rental market is expected to grow at a CAGR of close to 5% during the forecast period.
This research report titled ‘Global Power Rental Market 2016-2020’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. This market research report also includes up to date analysis and forecasts for various market segments and all geographical regions.
The report categorizes the global power rental market into three major end-user segments. They are:
- Oil and gas sector
- Industrial sector
- Utility sector
Global power rental market in oil and gas sector
The global power rental market in the oil and gas sector was valued at USD 1.303 billion in 2015 and is expected to reach USD 1.703 billion by 2020, growing at a CAGR of more than 5%. Often, oil and gas drilling sites and oil rigs are located in remote areas where access to grid power is limited or non-existent; this is the primary factor driving the need for rental power in the oil and gas industry.
Production, processing, and refining are energy-intensive processes that require a constant power supply to keep the operation flow profitable. Downtime in production will lead to monetary losses of several thousands of dollars, which is why the industry relies on rental power as a backup to assist them during any emergency or maintenance.
According to Sayani Roy, a lead power analyst from Technavio, “When a Gulf of Mexico-based rig shutdown due to the failure of its onboard generators, Aggreko, a leading rental power company, supplied eight 800 kW generators to restore the power within 48 hours. Preventing downtime not only saves operation costs but also protects crew members at the site, as oil rigs are self-contained environments where the crew live and work on the platform. Hence, the dependence of all operations on generators has driven the need for rental power generators in the oil and gas industry.”
Global power rental market in industrial sector
The industrial sector was the second largest segment in the market in 2015 and is expected to reach USD 1.320 billion by 2020, growing at a CAGR of over 5%. The main factor that is driving the power rental market in this sector is the extreme dependence of industrial revenue on daily output and productivity. To ensure maximum efficiency, an industry needs to ensure that all its equipment runs uninterrupted for a specified period. Since the equipment used runs on electric power, any outage will cause these machines to stop operating; therefore, to meet such exigencies, industrial companies rent power generators to avoid potential losses resulting from downtime.
For instance, Suzano, a leader in the paper market in Latin America, avoided losses of up to USD 35.5 million in revenue by hiring rental generators to maintain operations while conducting a yearly preventive maintenance program that lasted for 15 days. By using rental generators, the mill, which was producing 50% of the companies’ paper and pulp, was able to maintain its operations and thereby avoid a potential loss to the company.
“In many countries, especially developing countries like China, Brazil, India, and other Southeast Asian countries, industrialization is booming whereas an enormous gap exists between the demand for and supply of electric power due to the inadequacy of the existing electrical networks and associated infrastructure. So, this is driving the use of rental generators,” says Sayani.
Global power rental market in utility sector
The services segment is one of the fastest growing segments in the market, growing at a CAGR of almost 3% and is foreseen to reach USD 0.551 billion by 2020. This growth is mainly attributed to the use of rental power during maintenance or upgrading of a power plant. Whenever a power plant undergoes repowering or restructuring, utilities worldwide use rental power as a backup or to meet base demand from end-users. Also, utilities worldwide use rental power for peak hour load shaving measures.
For instance, APR Energy, one of the leading vendors for rental power, installed and commissioned a turnkey power plant in the Sultanate of Oman to support the grid in summer when the demand for electricity is high.
The top vendors highlighted by Technavio’s research analysts in this report are:
- Aggreko
- APR Energy
- Atlas Copco
- Energyst
- Himoinsa
- United Rentals
