Demand for diesel gensets grows in Sri Lanka
View(s):Mumbai – Large-scale investments in the infrastructure, hospitality and real estate sectors in Sri Lanka have lent momentum to the diesel genset market in the country, according to India-based analyst Frost & Sullivan.
The 75.1–375 kilovolt-ampere (kVA) and 375.1–2,000 kVA diesel genset segments, in particular, are expected to witness the highest growth over the next few years.
The analysis on the Sri Lanka diesel genset market, finds that the market earned revenues of US$26.9 million in 2012 and estimates this to reach $59.2 million in 2019.
Post-war restructuring has led to increased economic activity in Sri Lanka, driving projects in roads, highways, hotels and commercial buildings, and in turn spurring demand for diesel gensets in the country.
Schemes by the Sri Lankan government to set up special economic zones for new industries in the northern and eastern province will also contribute to market revenues.
“The installation of diesel gensets in new commercial and residential buildings will go up, especially as regulations mandate that high-rise buildings employ diesel gensets as a backup source of power,” noted the report. “The expansion of the telecom sector too will boost sale volumes of 5–12.5 kVA and 15–75 kVA gensets.”
Currently, the higher kVA segment of the diesel genset market in Sri Lanka is been dominated by European suppliers, while Indian and Chinese suppliers have a substantial presence in the lower and medium kVA segments. The report said the entrance of Indian and Chinese manufacturers has intensified price competition, affecting the overall profit margins of established genset suppliers in the market.
Further, recurring fuel expenditure and the need for regular equipment maintenance discourage many consumers from investing in gensets. The construction of new power plants to improve power generation, expansion of transmission and distribution infrastructure may also reduce the adoption of diesel gensets.
“Nevertheless, the delay in the implementation of these power projects, along with insufficient grid energy supply will ensure gensets remain a key backup power source for now,” affirmed the report.
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