Power Rental Market is projected to register a CAGR of 8.2% during the forecast period (2022 - 2030), with valuation of USD 18.11 billion. Demand for constant power supply from mining and oil & gas industries is expected to drive global Power Rental Market.
Power rental is defined as renting generator sets for power generation that run on gas, diesel, or other fuel. It offers a sturdy power equipment along with various scalable components, which are installed in power stations. In addition, it offers reliability, flexibility, speed, and cost-effectiveness to businesses for coping with temporary shortages of power. The power rental services help in stabilizing utility power grids and provide additional energy to industries and support communities. Thus, it finds extensive application in construction, mining, and oil & gas industries. The surge in demand for uninterrupted power supply and rapid industrialization are the key factors driving the market growth. In addition, an increase in instances of unreliable power supply generated through small-scale power grids and limited access to the leading transmission network has propelled the demand for rental generators across the utility and manufacturing industries.
Furthermore, the rise in requirement for scalable rental equipment that can overcome the problems associated with voltage sags & swells and power outages notably contributes to the market's growth globally. Moreover, the rise in awareness regarding the benefits of outsourcing power rental systems positively impacts market growth. Shortage of power supply is likely to increase the use of power rental equipment, which is expected to drive the growth of the global market. Power rental systems aim to cater to numerous industries' needs during periods of power suspension, as these units provide power back-up to keep operations running. Emerging economies in various participating regions and high population rates require more power supply each day.
Factors driving the growth of the demand are a continuous supply of power in the oil & gas and mining industries, the increasing need for electrification, and the constant supply of power in rural areas.
The global outbreak of COVID-19 in the first half of 2020 forced several countries into complete lockdown. Since governments and local authorities issued strict guidelines, all non-essential operations have been halted. This negatively affected the power rental market due to the suspension of end-users activities. Furthermore, production and supply chain delays are anticipated to pose a short-term obstacle to the power rental industry, as end-user industries still do not run at full capacity. However, several businesses have turned this crisis into an opportunity to provide services to society. For example, Cummins has converted its air filter manufacturing facility into a respirator (filtration material for face masks) manufacturing unit.
Customer-specific product offerings are a robust trend in the industry, with many industry players seeking to reach and retain market share through strategic alliances and long-term collaborations. Eminent industry players are concentrating on growing their product range and providing an appealing range of power rental systems to gain a competitive advantage in the market. Market players place importance on backward integration and economies of scale to preserve the standard quality of the product. These market players have implemented a variety of inorganic and organic growth strategies to expand their presence in different countries.
The key players in the Global Power Rental Market are Aggreko Plc. (U.K.), Caterpillar Inc. (U.S.), Cummins, Inc. (U.S.), Herc Rentals Inc. (U.S.), Speedy Hire Plc. (U.K.), Ashtead Group Plc. (U.K.), United Rentals, Inc. (U.S.), APR Energy (U.S.), Bredenoord Exploitatiemij B.V. (The Netherlands), L.M. Generating Power Co. Ltd. Ltd (Canada), and others.
Asia-Pacific accounted for a significant share, owing to the rapid expansion of commercial spaces comprising malls, hotels, and retail stores, which, in turn, has significantly boosted the demand for stable power supply, thereby augmenting the utilization of power rentals. Southeast Asian countries such as Thailand and Indonesia are witnessing mega commercial infrastructure development due to an increase in government expenditure on public establishments. Moreover, rapid digitization coupled with prevailing Industrial Revolution 4.0 is likely to impart substantial impetus to the industry expansion.
Demand for constant power supply from mining and oil & gas industries
Mining and oil and gas exploration operations typically take place in remote areas. Human life at such locations is under looming danger due to the highly flammable nature of the extracted products; therefore, proper illumination and power are essential requirements for such operations. Driven by growing investment, the mining and oil & gas industries in the US, Australia, and many African countries are likely to see substantial growth. New mining projects are expected to be launched in China, Australia, and India in the coming years. These factors are imperative to stimulate the demand for power rental solutions. As per the Australian Bureau of Statistics, Australia spent more than USD 2.3 billion on mining exploration in 2019, a rise of almost 19% from the previous year.
Moreover, since the advent of hydraulic fracturing, the US has remained one of the world's top oil-producing countries. Exxon Mobil plans to spend USD 50 billion to extend its integrated operations in the US through 2025. This includes drilling more oil and gas wells in the Permian Basin and constructing pipelines to move output to the Gulf Coast, where it is expanding its downstream footprint. Collectively, in the future, these factors are projected to drive the demand for power rental solutions.
Strict regulations on the reduction of emissions in fossil fuel-powered equipment
North America, Europe, and the Asia Pacific have formulated a range of stringent regulations to reduce carbon emissions from power generation operations. Such regulations also define the permissible noise levels of diesel generators to reduce the noise emissions generated by diesel generators. Different nations have their own set of laws and regulations. For example, the European Union has set a target of a 20% reduction in carbon emissions and related pollution by 2030. Several power rental companies have several emission controls measures, such as silencers, strong foundation, and rubber in shear mounts, canopies, and flexible elbows, to reduce the noise level, which, in turn, increases the total cost of generator sets.
Similarly, in order to meet emission requirements across different countries, rental diesel generators are expected to operate on more energy-efficient fuel, usually referred to as ultra-low sulfur diesel (ULSD). ULSD is more costly than standard diesel fuel due to the additional processing needed to eliminate or lower the sulfur content. The critical challenge for companies providing rental generators is to reduce emissions while retaining efficiency to support their businesses in a competitive world.
Global Power Rental Industry has been segmented into Fuel Type, Application, and End-User.
By fuel type, the global power rental market has been segmented into diesel, gas, others.
By application, the global power rental market has been segmented into baseload, stand-by power, and peak shaving.
By end-user, the global power rental market has been segmented into oil & gas, utilities, shipping, manufacturing, mining, construction, and other.
North America to dominate the global Power Rental Market
The North American region dominates the global market for power rental. North America had the highest market share of 31.60% in 2016, with a market value of USD 3.773.9 million. An aging grid infrastructure and natural disasters, which cause frequent power outages and increased demand from the industrial sector, boost the growth of the market in the region. In addition, increased investment in mining and related exploration activities in the area also drives the need for power rental equipment during the forecast period.
Recent Developments in Power Rental Market
Power Rental Market Report Overview
This research report examines crucial factors, constraints, and obstacles in the global power rental market, regional and segment revenue forecasts, and assessments. The base year is 2017; the projection is 2017-2023. The segmentation of the market is represented in the following manner.
By Fuel type
|CAGR||8.2% CAGR (2022-2030)|
|Forecast Period||2022 to 2030|
|Historical Data||2019 & 2020|
|Forecast Units||Value (USD Million)|
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends|
|Segments Covered||Fuel Type, Application and End-User|
|Geographies Covered||North America, Europe, Asia-Pacific, and Rest of the World (RoW)|
|Key Vendors||Aggreko Plc. (U.K.), Caterpillar Inc. (U.S.), Cummins, Inc. (U.S.), Herc Rentals Inc. (U.S.), Speedy Hire Plc. (U.K.), Ashtead Group Plc. (U.K.), United Rentals, Inc. (U.S.), APR Energy (U.S.), Bredenoord Exploitatiemij B.V. (The Netherlands), L.M. Generating Power Co. Ltd. Ltd (Canada)|
|Key Market Opportunities||New product launches and R&D Amongst major key Players|
|Key Market Drivers||Demand for constant power supply from mining and oil & gas industries|
The power rental market is expected to augment at 8.2% CAGR.
The key contributors are Aggreko Plc. (U.K.), Cummins, Inc. (U.S.), Caterpillar Inc. (U.S.), Herc Rentals Inc. (U.S.), Ashtead Group Plc. (U.K.), Speedy Hire Plc. (U.K.), United Rentals, Inc. (U.S.), Bredenoord Exploitatiemij B.V. (The Netherlands), APR Energy (U.S.), and L.M. Generating Power Co. Ltd. Ltd (Canada).
The end user segments are oil & gas, shipping, utilities, manufacturing, construction, mining, and others.
By fuel type, the segments are gas, diesel, and others.
The application based segments of the power rental market are stand by power, base load, and peak shaving.
North America is likely to dictate the power rental market.
During forecast period, the power rental market is supposed to value at USD 18.11 billion.