6Wresearch - Commercial Strategy, Advisory & Consulting

Five-year growth for Saudi genset rental market

Posted On: 15-02-2020

The Saudi Arabia diesel genset rental market is expected to grow 3.7% year-by-year until 2022, according to the latest report by 6Wresearch.

It said increasing construction activities, expansion of public infrastructure, government policies to support establishment of new industries, and the need to supply power in off-grid and remote areas would be the key factors in its growth.

Such growth would only represent a minor recovery, however, as the market has declined by almost 60% during 2015 and 2016, following a slump in the construction industry, as a result of budget deficit due to low crude oil prices.

6Wresearch said the market would remain difficult until oil prices recovered, but said the changing of government policies to generate a major proportion of its revenues from the non-oil sector would drive growth.

Rajat Kharbanda, senior consultant, research and consulting, 6Wresearch, said, "Medium- to high-rating diesel gensets have dominated the rental market in 2016, owing to high demand from utilities and oil and gas sector. Diesel gensets are the prime source of power backup in utilities due to readily availability and ease of storage of diesel, unlike natural gas.

"However, the share is expected to decline over the next five years due to expansion of the electricity grid and integration of renewable energy."

He said that around 50 companies were active in this market, with five to eight of those operating a turnkey power plant business model, which were also the leading players in the market.

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