The South America generator sets market is expected to rise at a CAGR of more than 2.5% during the forecast period of 2020-2025. Factors such as lack of reliable grid infrastructure, the need for emergency backup power solutions, and increasing development operations in several remote and rural areas are likely going to drive the South America generator sets market. However, increasing the use of renewable energy for power supply and backup expected to restrain the South America generator sets market.

  • Diesel based generator sets due to their fuel efficiency and low cost of maintenance than gas or other fuel-based generator sets, and are expected to be the largest segment. It is likely to dominate the South America generator sets market during the forecast period.
  • The emerging commercial and industrial sectors of Chile and Colombia are likely going to create several opportunities for the South America generator sets market in the future.
  • Brazil, due to its increasing urbanization and industrialization in the region, is expected to dominate the South America generator sets market. Oil and gas upstream is one of the many sectors in which generator sets are used extensively. In 2018, Brazil produced 140.3 million tonnes (MT) of oil and was the largest oil producer in the region, which exhibits the increasing number of usage generator sets in the country.



Key Market Trends

Diesel Segment Expected to Dominate the Market

  • Generator set, also known as genset is a piece of portable equipment, consisting of an engine and a generator, used to provide energy. Gensets are usually used in developing areas and other areas not connected to the power grid, where power outages are frequent, and where an outage can cause especially significant or dangerous problems, such as deep in a mine or hospitals. They can serve as the primary source of energy or as a supplementary power source, perhaps during peak usage hours
  • Diesel based gensets use diesel as a fuel for converting chemical energy to mechanical energy and then to electrical energy. Factors such as high-efficiency work output and top fuel energy density make it more cost-effective than the other fuel-based generator sets. Due to the above consideration, diesel generators are majorly used for it more cost-effectiveness.
  • Moreover, diesel generator sets used now days are much-improved versions of the earlier model. They produce much less noise and needed less cost of maintenance than other gensets, thus driving the market during the forecast period.
  • In 2019, PRAMAC was awarded by a company specialized in mining and mineral transportation, located in Chile, to supply diesel generators in the middle of the Atacama Desert, approximately 1000 km north of Santiago. PRAMAC supplied eight diesel generators running for up to 18 hours a day during mining operations, and producing more than 4 to 5megawatts (MW) of electricity.
  • In 2019, Millennial Lithium announced that its Pastos Grandes Salar lithium brine project in Argentina became home to a solar-powered permanent project center with dorms and other facilities, an onsite laboratory, and a process pilot plant under construction. The system utilizes 540 photovoltaic panels, a 500 kWh maximum storage bank of batteries, and two low-emission diesel generator sets. These generators sets were installed to be used as backup only for some peak energy consumption times and infrequent non-sun events.
  • Hence, owing to the above points, the diesel-based generator sets are likely going to dominate the South America generator sets market during the forecast period.



Brazil Expected to Dominate the Market

  • Brazil, due to the constant increase in energy demands and an increasing number of industrial operations in the country, is likely to be the largest market for the generator sets in South America.
  • The continually growing demand for uninterrupted power supply and development of the rural areas by providing them with several facilities, such as hospitals and schools in the country, is expected to drive the country’s generator sets market. In 2018, the electricity generated by the country contributed to approximately 45% of the total electricity generation in South America.
  • Moreover, the country’s oil and gas production sector is rapidly growing. The sites of oil and gas wells are usually at a remote place or in offshore where onsite generator sets become a necessity to provide site either with primary power supply or backup power for the smooth workflow. Thus the oil and gas sector is expected to become one of the many reasons to drive the generator sets market in the country.
  • In 2019, Cummins Brasil, a subsidiary of Cummins Inc., sold 30 diesel generator sets to a power and refrigeration equipment rental company in Qatar. Besides the actual generator, the gensets comprise other necessary equipment, such as panels. According to the company, the products are expected to be used in infrastructure works for the 2022 FIFA World Cup that Qatar will host.
  • In 2019, Repsol, a Spanish oil major company, obtained four new exploratory blocks in Brazilian pre-salt layers, of which three are located in the Campos Basin and another in the Santos Basin. The developments such as exploration, drilling, and production of the blocks are expected to use generator sets for the supply of energy in an offshore location.
  • Hence, owing to the above points, Brazil is expected to dominate the South America generator sets market during the forecast period.



Competitive Landscape

The South America generator sets market is moderately fragmented. Some of the key players in this market include Kohler Co., Caterpillar Inc., Cummins Inc., Atlas Copco AB, and Aggreko plc.

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