Market Trends of South Africa Diesel Generator Industry
This section covers the major market trends shaping the South Africa Diesel Generator Market according to our research experts:
Backup Generators to Dominate the Market
- Backup diesel generators are fossil fuel generators that are used not as the primary source of supply but as a backup during the power cuts or blackouts from the utility grid. They may also be used in different areas where a direct connection with the grid is not feasible.
- South Africa has the largest per capita backup generators in Africa, accounting for around 2.1 backup generators per 100 people in 2019. Many backup generators are used primarily, due to the unreliability of the country's main utility grid.
- Eskom, which is the main utility organization in the country, is under intense financial stress, which has caused considerable problems in the projects' expansion and may impede the newer projects. Unreliability in the main grid, due to such causes, is expected to fuel growth in the backup diesel generator market.
- In 2019, diesel fuel backup generators produced around 0.85% of the country's total power generation. An increase in the country's economic growth may provide further growth in the segment.
- Therefore, backup generators are expected to remain a significant segment of the diesel generator market and are expected to grow further in the forecast period due to the unreliability of the main utility grid.
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Growing Demand for Uninterrupted and Reliable Power Supply to Drive the Market
- The increasing demand for uninterrupted and reliable power supply by the populace coupled with the moderate transmission access (92%, in 2018) to the utility grid has led to the citizens using the diesel generators for a reliable source of energy. Power outages in the country have also contributed to the growth of the market.
- Consumption in the country decreased, by 0.25%, from 121.8 million tons of oil equivalent (mtoe), in 2017 to 121.5 mtoe, in 2018. However, the consumption is expected to increase slightly in the forecast period and provide growth to the diesel generator market.
- It is likely that high investment is expected to come from the utility sector of the country as emergency usage of the diesel generator is also likely to continue to rise in the country.
- Hence, the growing demand for uninterrupted and reliable power supply in South Africa is expected to drive the market for the South Africa diesel market with significant demand coming from the private sector.
