S07 ATR July 2022 Genset Review_ATR - New Master Template 2016 29/06/2022 15:27 Page 22
GENSET | REPORT
Genset market recovery underway n 2022, as in other recent years, there is an endless stream of news focusing on renewable energy and innovative ways to generate electricity, both in Africa and worldwide. Yet, amongst this chorus, the diesel generator, or genset, remains an integral part of Africa’s energy mix, just as it has done for many decades. Indeed, the market is retaining its steady growth given that a huge number of inhabitants and organisations, both small and large, continue to rely on this ever-dependable piece of equipment for their energy requirements. That ranges from small households, health clinics and hospitals, to mining sites and oil platforms. For operations and activities that require dependable ‘without fail’ electricity, then it’s still hard to beat the traditional genset, especially in a region with such patchy, erratic grid-based power. Not that there’s anything traditional about the modern gensets now being sold into Africa, though, in terms of their performance, power and energy efficiency. The gensets now being manufactured by leading brands in this niche – the likes of Kohler SDMO, Caterpillar and Cummins, among others – are a huge leap in comparison to the machines of yesteryear.
Image Credit: PowerGen Pages
Diesel genset demand is holding firm as Africa looks to a dependable energy supply from a proven, traditional technology.
I
Genset demand recovery continues
Image Credit: PowerGen Pages
There is positive news too in terms of overall demand emanating from the African continent. Imports of diesel generators increased by 12%
22
AFRICAN REVIEW OF BUSINESS AND TECHNOLOGY | JULY 2022
in the first quarter of 2022 compared to the same quarter of last year. Moreover, they are now only 3% lower than the pre-crisis level (first quarter of 2019), reflecting a sustained pick up since the chaos wrought by Covid shutdowns. Most countries and industry sectors – including construction, manufacturing, mining and telecommunications – witnessed an increase in demand due to the general market recovery and rising need for electricity. However, the recent spike in commodity prices may create a few differences between the oil and gas exporting countries that will benefit from this
increase in income, and others that will suffer from the higher prices. At the same time, the higher cost of fuel right now may add further impetus to the shift to renewables and other alternatives, a long-term transition that may ultimately dampen genset demand considerably later in the decade.
Key trends shaping 2022 The increase in demand was particularly significant for generator sets at the smaller end of the scale, below 75 kVA. This category saw imports increase by 18% compared to last year, and are even higher than in 2019 (by 11%). This strong surge is due to an increased demand and need for electricity in construction and the residential and telecommunications sectors, as well as slightly lower lead times compared to other bigger products. In this environment, and despite high transport costs, Chinese exports have boomed since 2019 – a 98% increase in Q1 2022 compared to Q1 2019, while UK exports have been reduced by 50% during the same period. The recent lockdown in China is expected to moderate this growth in Q2 2022, however. Nonetheless, the overall trend is likely to continue due to China’s low cost advantages and large manufacturing capabilities, especially for generators below 300 kVA. Low cost may not always imply quality,
www.africanreview.com
