Market Trends of Data Center Generator Industry
Natural Gas Segment to Witness Major Growth
- The demand for natural gas generators in the data centers is expected to experience significant growth in the coming years owing to the benefits associated with natural gas, such as being cleaner, less expensive than other non-renewable fuels, and considerably efficient. Natural gas is also readily available in large cities since it is delivered directly through pipelines, thus positively driving the demand as the strong underground pipeline network is rarely impacted by weather. According to GGON, by October 2023, there was a total of 1,869 operational gas pipelines, and around 400 were newly proposed globally.
- Recent advances in generator technology make natural gas generators an attractive option to achieve continuous power and make strides toward corporate sustainability commitments. Natural gas is the cleanest burning of fossil fuels, is readily available in most locations, and is more cost-efficient than diesel. Built-in storage with a highly reliable natural gas grid avoids risks of limited run times and refueling, thus emerging as an attractive option for data center operators.
- Data centers are becoming more dynamic, reaching scale in size and complexity and achieving record power usage levels. As these data superusers approach zero tolerance for power outages, the demand for resilient and sustainable backup power solutions such as natural gas generators is becoming increasingly critical to maintaining today’s standard for 100% uptime. Additionally, natural gas prices have remained relatively stable compared to traditional fuels, ensuring long-term cost-effectiveness for data center operators.
- Advancements in gas extraction technologies have increased availability and reduced prices, making natural gas an economically viable option for power backup in data centers. New launches of innovative natural gas engines may further positively influence the market's growth during the forecast period.
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Asia-Pacific is Expected to Witness Significant Growth
- Rapid growth in the number of data centers in Asia-Pacific, supplemented with the government’s initiatives, has made the region one of the fastest-expanding data center markets in the world, with fintech growth and digital transformation in the region.
- The increasing investments by global and regional facility operators and the rising adoption of public cloud and hybrid cloud services are the primary factors contributing to the growth of the APAC region's data center generator market.
- Moreover, the digital transformation across various sectors has intensified the demand for increasing data infrastructure. Due to this, many companies are launching data centers in the region. For instance, in December 2023, NTT Global Data Centers Japan, a subsidiary of NTT DATA Group Corporation, and TEPCO Power Grid, Inc. announced that both companies would launch a new company to jointly develop and operate data centers in the Inzai-Shiroi area of Greater Tokyo, Japan.
- These data centers are the backbone for the economic development of many Asian countries and require reliable power solutions to maintain continuous operations. The unpredictable nature of power supply in certain parts of the Asia-Pacific region has made data center generators indispensable for mitigating the risks associated with power fluctuations and outages.
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