Global natural gas generators market is projected to witness a CAGR of 6.67% during the forecast period 2024–2031, growing from USD 7.55 billion in 2023 to USD 12.66 billion in 2031. The demand for natural gas generators is driven by various factors, such as environmentally friendly power solutions and the cost-effective nature of the equipment. Natural gas produces fewer carbon emissions, nitrogen oxides, and particulate matter compared to other fossil fuels, making natural gas generators an environmentally friendly option for businesses to consider. Currently, the abundant supply of natural gas in various regions has kept prices relatively low, enhancing its appeal as a cost-effective choice for residential and industrial users. This combination of environmental benefits and economic viability positions natural gas generators as an attractive investment for a wide range of applications.
As more countries seek sustainable energy solutions and strive for energy independence, natural gas generators are becoming essential components of the global energy landscape. These generators serve as cleaner and more reliable backups for renewable energy systems, driving increased demand in the market. Modern natural gas generators have become more efficient, quieter, and compact, making them suitable for a wider range of applications. Additionally, newer models equipped with smart controls, remote monitoring, and automatic transfer switches (ATS) create significant opportunities for growth in the natural gas generators market during the forecast period.
For instance, Caterpillar Inc. decided to launch four new models of natural gas generators that deliver improved power density, fuel efficiency, and emissions performance. Natural gas generators are mainly used in small- to medium-sized plants. This development helps the company to expand its product portfolio and revenue in the forecast period.
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Transition to Cleaner Energy Sources to Drive Market Growth
Developing and developed countries are looking towards achieving net zero emissions through innovative renewable energy production technologies. Natural gas generator technology helps to fill the gap between current energy needs and sustainability. The natural gas generators enable a smoother transition by providing backup power in case of long-duration power cuts. Furthermore, while large-scale energy storage technologies such as batteries are in the developing stage for storing excess renewable energy, natural gas generators are an immediate and practical alternative. The equipment helps to maintain energy reliability along with the easy transition to sustainable energy sources.
Several industries are adopting hybrid power systems that combine renewable energy sources, such as solar or wind, with natural gas generators. In hybrid systems, the natural gas generator acts as a backup or supplementary power source, ensuring that power is always available. The natural gas generator allows users to move towards a clean energy transition while maintaining a reliable power supply, which boosts the natural gas generators market size.
Natural gas generators could be quickly deployed compared to large-scale battery storage systems, which makes equipment an ideal solution for different industries. Moreover, countries are considering natural gases in their transition plans to clean the environment, which drives the demand for the global natural gas generators market. Natural gas generators can meet eco-friendly certifications and emission standards, which will foster the natural gas generators market trends in the forecast years.
Thus, the transition to cleaner energy sources significantly boosts the demand for natural gas generators as equipment complementing renewable energy systems and lowering emissions in the environment.
For instance, in November 2023, Hitachi Energy decided to launch a new emission-free generator for remote sites and hospital applications. The development will help the company increase its revenue in the forecast years.
Low Operating Cost of Natural Gas Generators to Elevate Market Size
Natural gas generators are becoming an ideal solution for long-term, continuous use, especially during extended power outages. Equipment needs frequent refueling or storage capacity as generators receive natural gas directly from pipelines installed at the site, which helps lower operational costs. Natural gas generators are efficiently designed and require less space, which drives the demand for critical infrastructure in hospitals and other sectors where data and communication require reliable energy sources.
Natural gas generators tend to be more fuel-efficient than other diesel or gasoline generators, which means less natural gas is required to generate the same amount of electricity. The fuel efficiency of natural gas generators lowers the cost per kilowatt-hour (kWh) of electricity produced, making the equipment cheaper for consumers and businesses to operate, which boosts the natural gas generators market size. Moreover, natural gas produces fewer harmful emissions than diesel or gasoline, which reduces the overall maintenance requirements and operating expenses associated with keeping the generators compliant with environmental regulations.
In several regions, natural gas is abundant and available at affordable prices, which keeps the operational costs low. The low-price source of fuel makes natural gas generators an economically viable backup power source for various industries. Natural gas generators are more cost-effective in the short term, which makes equipment a popular choice for businesses and utilities, driving the demand for the natural gas generators market.
Thus, low fuel delivery logistics costs and operating expenses associated with regulatory compliance drive the demand for the natural gas generators market. As per the U.S. Energy Information Administration report in September 2024, natural gas prices will remain relatively flat, and no price rise is expected in the upcoming months of 2024.
Technological Advancements in Natural Gas Generators to Drive Market Growth
The natural gas generator manufacturers are working to include modern features that will make natural gas generators more efficient engines in converting fuel to energy. Modern natural gas generators are equipped with advanced emission control technologies that reduce pollutants such as nitrogen oxides (NOx) and sulfur oxides (SOx). The technologies help users comply with stringent environmental regulations, making natural gas generators a more attractive option for businesses and industries aiming to lower their carbon footprint.
Natural gas generators are coming up with quick start-up capabilities and lower operational costs, due to which equipment is being preferred for commercial and industrial applications. Moreover, the governments of developing countries are coming up with regulatory frameworks that create a favorable environment for the growth of the natural gas generators market.
The upcoming advancements in natural gas generators allow businesses and consumers to generate the same amount of electricity using less natural gas. As fuel efficiency improves, natural gas generators are able to run longer on the same amount of fuel. The innovative design and lower fuel costs are becoming more attractive features of power backup for industries and residential, which creates opportunities for the natural gas generators market in the forecast years.
For instance, in June 2024, Cummins Inc. was awarded the product of the year (bronze award) from Consulting Specifying Engineer’s (CSE) 2024 for 125kW-200kW natural gas standby generators (QSJ8.9G) product.
Standby Natural Gas Generators to Dominate the Global Market Share
Presently, standby natural gas generators have a high adoption rate, which makes the segment dominate the global market share. Standby natural generators ensure the continuous functioning of equipment during long power outages. For several industries, the power factor is critical to maintaining operations and avoiding damage to equipment, which drives the demand for standby natural gas generators in the market. Moreover, the newly developed standby generators are being designed according to new laws to meet stricter environmental regulations, including lower emissions and better fuel efficiency, driving the standby natural gas generators market to grow in the forecast years.
In many countries, policy support enhances the feasibility of standby natural gas generators, making them an economically viable option for homeowners and businesses. As a result, several beneficial aspects of standby natural gas generators contribute to their continued dominance in the generators market.
Asia-Pacific to Lead the Natural Gas Generators Market Share
Asia-Pacific has dominated the global natural gas generators market share, driven by substantial investments in reliable energy sectors across the region. Many countries face power supply challenges due to aging infrastructure and insufficient energy production. India, China, Japan, and Thailand are particularly focused on enhancing their manufacturing sectors and electrification efforts, which increases the demand for natural gas generators. The rapid urbanization and industrialization in these countries are further escalating energy needs, creating a pressing demand for reliable power solutions. Additionally, rising investments in natural gas pipeline infrastructure are expected to significantly contribute to market growth during the forecast period. Governments across the region are investing heavily in infrastructure development and sustainable power backup solutions, further driving the demand for eco-friendly natural gas generator equipment.
For instance, in March 2024, the Government of India will invest around USD 4.95 billion (INR 41,000 crore) to build natural gas pipeline infrastructure in northeastern states and northern federal territories of Kashmir and Ladakh.
Future Market Scenario (2024–2031F)
- Advanced natural gas generators are expected to be required for commercial applications, which drives the demand for natural gas generators in the forecast period.
- As environmental concerns push for more sustainable technological solutions, energy-efficient natural gas generators are expected to gain significance.
- Hybrid systems natural gas generators are becoming more popular in the residential and commercial sectors, which will drive market share for hybrid systems natural gas generators in the forecast years.
- As industries and homeowners continue to seek cleaner, efficient, and reliable power solutions, the demand for natural gas generators in the forecast period will increase.
Report Scope
“Natural Gas Generators Market Assessment, Opportunities and Forecast, 2017–2031F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of global natural gas generators market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between 2024 and 2031. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.
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