Can power rentals make up for low GCC liquidity?

Posted On: January 11, 2016

As market activity wrapped up in 2015, details about the GCC's diesel Genset market emerged, providing a glimpse of what the new year held for the regional construction industry. According to Saudi Arabia Diesel Genset Market (2015-2021) by 6Wresearch, the Kingdom's diesel Genset market is forecasted to grow at a compound annual growth rate (CAGR) of 13.55% between 2015 and 2021.

The demand for diesel Genset is expected to thrive on account of growing public infrastructures, industrial base, retail and hospitality sectors, and supplying power in remote areas.

The situation is similar in the UAE, where the expansion of public transport infrastructure has led to increased demand for generators. 6Wresearch's report added major construction activities anticipated in the country this year and near future - such as the expansion of Dubai Metro, road infrastructure, and Dubai Expo 2020 - will boost the local generator market.

Ravi Bhandari, the analyst at 6Wresearch's energy and power division, says the energy and utility sector in Saudi Arabia is also driving Genset demand in the country.

"Saudi is an oil-producing nation and almost 90% of its extracted oil is exported in the international market," Bhandari tells Construction Week.

"Unavailability of grid power in remote locations has resulted in an increased appetite for diesel gensets, motivated by power deficit during peak hours, especially summer months. Demand is also growing from construction sites and industries where grid power is unavailable. Power demand in the Kingdom is growing at the rate of 7.5% annually, and generators play a vital role in bridging the gap between demand and supply of electricity," he adds.

Clearly, portable power remains a lucrative sector in the Middle East, where transmission has historically been riddled with challenges.

As Tim Spearing, global product manager at Lucy Electric's automation business said to Construction Week in October 2015, the Middle East faces many challenges in achieving a stable, reliable, and high-performance electrical distribution network due to its rate of growth.

Experts suggest this is one of the factors boosting the deployment of portable power technology in the GCC region.

"Large scale industries are gradually shifting to rental power, as it helps maintain productivity, minimize capital costs, and sustain overhead costs," Bhandari explains.

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Media Courtesy : Construction Week Online