Data Center Generator Market - Global Outlook and Forecast 2021-2026

INDUSTRY INSIGHTS

The global data center generator market size to cross USD 5.8 billion by 2026, growing at a CAGR of 4% during the forecast period. The global market is expected to grow on account of increased unplanned power outages. A percentage (25%) of power outages in data centers is due to human errors such as flawed installation and commissioning services and lack of regular maintenance of adopted infrastructure. Vendors are constantly innovating their service offerings that enable decrease power outages. Hyperscale operators are also using artificial intelligence (AI) to decrease power consumption and avoid outages. In June 2020, the New South Wales government’s data center faced a power outage, which affected the health and state customer services significantly. Similarly, in August 2020, there was a major power outage in Equinix’s LD8 data center in London, UK, which severely affected customers’ network services.

Another important trend observed in the global data center generator market is the emergence of fuel cell generators, an effective alternative to diesel. Fuel cells are expected to be feasible choices in cities with increasing carbon emissions, growing electricity prices, and regular power fluctuations in grid supply. Fuel cell systems have low maintenance compared to diesel ones. Most data center operators pursue hydrogen-powered fuel cells that provide advantages in terms of price and reliability.

SNIPPETS

• Stringent laws, such as carbon tax regulations, are likely to influence the global data center generator market growth. The applicability of carbon tax to the data center market is likely to increase during the forecast period, thereby increasing the demand for effective gensets.
• The introduction of fuel cell generators is likely to decline diesel and DRUPS systems' adoption during the forecast period.
• The adoption of DRUPS systems has been identified as high among data centers in Latin Americas, Southeast Asia, and Australia.
• Several colocation providers developing hyperscale data centers with >15 MW are adopting devices with>2 MW capacity.
• The adoption of modular generators, which save space by 20%, is likely to grow during the forecast period as service providers expand their existing data center facilities.

DATA CENTER GENERATOR MARKET SEGMENTATION

This research report includes a detailed segmentation by:

• Generator Capacities
• Systems
• Tier Standards 
• Geography 

INSIGHTS BY GENERATOR CAPACITIES

Data center facilities in North America are adopting N+1 redundant configuration generators with onsite fuel storage capacity to provide over 48 hours of runtime. The adoption of devices with a power capacity of >2 MW is common. In Western Europe, data center providers are procuring multiple generators with onsite fuel storage. The majority of the UK facilities are adopting systems with N+1 redundant configuration, with a few installing 2N redundant. With the increasing adoption of 2 MW diesel systems, the UK generator market is growing. In the Nordic region, renewable energy availability with strong grid stability has not influenced the market yet, as data center operators are continuously constructing Tier III facilities with N+1 or N redundant configuration. The data center generator market is witnessing the adoption of devices with over 2 MW power capacity. Data centers in the APAC region are adopting diesel systems with redundant configuration. However, facilities with power capacity above 10 MW have adopted 2 MW N+N redundant generators or above. Most data centers in Southeast Asia and Australia are procuring DRUPS systems of over 1 MW. Due to high unreliable power supply, the generators market will continue to grow in Latin America. The market is also likely to witness the strong adoption of Diesel Rotary Uninterruptible Power Supply (DRUPS) technology. They combine both battery and flywheel UPS topology with a diesel system to provide backup energy during power outages.

INSIGHTS BY SYSTEMS

The availability of gas and bi-fuel generators is growing among service providers. Gas generators can be installed along with the electricity grid supply to reduce data centers' electricity consumption. Data centers near natural gas resources install gas systems as they are a sustainable and cost-effective alternative to diesel generators. However, they have higher maintenance costs than diesel ones. Diesel generators have been in use for decades. However, the adoption of natural gas systems is witnessing steady growth in the market, especially in Japan. This trend is likely to continue during the forecast period due to regulations limiting the facility's use of multiple diesel systems. Data centers developed in Japan are majorly powered through generators running on natural gas. The adoption of natural gas or bi-fuel generators by hyperscale providers will significantly impact the data center generator market share, thereby leading to a sustainable environment.

INSIGHTS BY TIER STANDARDS

The Uptime Institute has classified and evaluated data center facilities into tiers – I & II, III, and IV based on infrastructural performance, efficiency, redundancy, and high availability. Tier II data centers have minimum redundancy, where it is identified among UPS and PDU systems. However, the installation of generators follows N redundant configuration. A few small-scale colocation facilities of Tier II standards are likely to operate with N+1 redundancy in generators. In 2020, over 320 data center projects were opened and under construction, falling under the Tier III category. This trend is likely to continue during the forecast period. Most new data centers are designed to be of Tier III standards with a minimum of N+1 redundancy in generators and can be reconfigured up to 2N redundancy as and when the need arises.

In 2020, over 50 Tier IV data center projects were either opened or under construction. North America leads the tier IV data centers, followed by Asia and Western Europe in terms of the number of projects opened. These facilities generate more revenue for the market, with focused investment on highly efficient power systems.

INSIGHTS BY GEOGRAPHY

The construction of facilities with over 10 MW of power capacity in North America is likely to increase generators' adoption with N+N redundant configuration. Diesel systems are the most adopted ones in the region with onsite fuel storage. North America witnessed the development and expansion of over 150 data center facilities in 2020. The US was the major contributor to data center projects. Besides, over 40 data centers have been announced/under construction in the region. There is also increased investment in the construction of hyperscale facilities with over 20 MW of power capacity. There are currently over 50 hyperscale data centers built in North America in 2020 that operate at over 20 MW's power capacity. Power consumption and carbon emission are the major challenges faced by the market. Also, several innovations that aim to enhance operational efficiency, reduce power consumption, and decrease carbon emissions have been adopted in the market.

INSIGHTS BY VENDORS

Caterpillar, Cummins, Generac Power Systems, Rolls-Royce Power Systems, Yanmar Holdings, and KOHLER-SDMO hold a significant percentage of the global data center generator market share for diesel systems. Strong relationships with engine manufactures are critical for generator providers. The data center generator market comprises multiple pure-play vendors offering diesel, gas, and DRUPS systems. Although the adoption of DRUPS systems across the globe has been growing in recent years, the market has been affected due to the COVID-19 pandemic outbreak. The commencement of new construction projects has delayed by a quarter, affecting several vendors' revenue in the market in Q1 and Q2 2020.

The global data center generator market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

By Capacities  

• 1­–2MW
• (>2MW)

By Systems

• DRUPS Systems
• Diesel/Gas/Bi-Fuel Generators

By Tier Standards 

• Tier I & II
• Tier III
• Tier IV

By Geography

• North America 
• US
• Canada
• Latin America
• Brazil
• Other Latin American Countries
• Western Europe
• UK
• Germany
• France
• Netherlands
• Ireland
• Other Western European Countries
• Nordic
• Denmark
• Iceland & Finland
• Norway
• Sweden
• Central & Eastern Europe
• Russia & Czech Republic
• Poland & Austria
• Other Central and Eastern European Countries
• Middle East
• GCC
• Other Middle Eastern Countries
• Africa
• South Africa
• Kenya
• Other African Countries
• APAC
• China & Hong Kong
• Australia & New Zealand
• India
• Japan
• Rest of APAC
• Southeast Asia

• Singapore
• Malaysia
• Thailand
• Indonesia
• Other South Eastern Countries