Diesel Gensets Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Power Rating (Below 75 kVA, 75-375 kVA, 375-750 kVA and Above 750 kVA), By Portability (Stationary and Portable), By Application (Continuous Load, Peak Load and Standby Load), By End User (Residential, Commercial and Industrial), By Region, By Competition Forecast & Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 13.48 Billion
CAGR (2026-2031)	5.11%
Fastest Growing Segment	Portable
Largest Market	Asia Pacific
Market Size (2031)	USD 18.18 Billion

Market Overview

The Global Diesel Gensets Market will grow from USD 13.48 Billion in 2025 to USD 18.18 Billion by 2031 at a 5.11% CAGR. Diesel generator sets, commonly known as diesel gensets, are integrated power systems that combine a diesel engine with an electric generator to convert chemical energy into electrical energy, serving as a robust source of continuous or standby power. The market’s expansion is primarily supported by the critical need for reliable backup power in essential infrastructure such as data centers, healthcare facilities, and telecommunications networks, where downtime can result in significant financial and operational losses. Furthermore, rapid industrialization and urbanization in developing economies drive the demand for these units to bridge the gap caused by unstable or insufficient central grid infrastructure. These drivers are distinct from temporary market trends, representing fundamental structural requirements of the modern energy landscape.

Despite this robust demand, the market faces a significant challenge in the form of stringent environmental regulations and the accelerating global shift toward low-carbon energy alternatives. This transition is evident in the increasing adoption of renewable energy technologies which directly compete with fossil-fuel-based power generation. For instance, according to Eurelectric, in 2024, clean and renewable energy sources accounted for nearly 75% of the electricity mix in the European Union, illustrating the substantial competitive pressure and regulatory headwinds that traditional diesel power solutions must navigate to maintain market share.

Key Market Drivers

Surging power demand from hyperscale data centers serves as a primary catalyst for the diesel gensets market. The rapid expansion of artificial intelligence and cloud computing infrastructure necessitates absolute power reliability, prompting facility operators to procure high-capacity diesel generators as a safeguard against grid instability. This requirement is intensifying as the energy appetite of server farms begins to strain existing utility capacities, making robust backup generation mandatory to ensure business continuity and prevent data loss. According to the Electric Power Research Institute, May 2024, in the 'Powering Intelligence: Analyzing the Impacts of AI and Data Center Growth' white paper, data centers could consume up to 9% of total United States electricity generation annually by 2030, highlighting the critical scale of energy needs that backup systems must support.

Rapid industrialization and infrastructure development in emerging economies act as the second major driver. As developing nations accelerate construction activities and expand manufacturing capabilities, the deficit in public power generation often forces industries to rely on diesel gensets for prime or auxiliary power. This structural shift is evidenced by substantial government spending aimed at modernizing logistics and urban frameworks, which directly correlates with increased equipment procurement. According to the India Brand Equity Foundation, March 2024, in the 'Infrastructure Sector Report', the national interim budget for 2024-25 raised the capital expenditure outlay by 11.1% to Rs 11.11 lakh crore to support development projects. Reflecting the broader vitality of this sector, major manufacturers are reporting significant revenue gains. According to Cummins Inc., in 2024, Power Systems sales increased 17% to $1.7 billion in the third quarter compared to the prior year, driven largely by strong demand for power generation.

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Key Market Challenges

Stringent environmental regulations and the accelerating global shift toward low-carbon energy alternatives constitute a significant barrier to the growth of the global diesel gensets market. Governments worldwide are enforcing rigorous emission standards, such as Stage V in Europe and Tier 4 Final in North America, which necessitate the integration of costly exhaust after-treatment systems. These compliance requirements inflate the initial capital expenditure for diesel units, reducing their price competitiveness. Simultaneously, the rapid maturation of renewable energy technologies, particularly solar and battery energy storage, offers a cleaner substitute for both standby and continuous power applications, steadily eroding the traditional dominance of fossil-fuel-based generation.

This structural contraction is evident in recent industrial performance metrics, reflecting a tangible slowdown in demand for diesel propulsion technologies. For instance, according to the China Internal Combustion Engine Industry Association, in the first half of 2024, the cumulative sales of diesel engines in China decreased by 2.08% year-on-year to approximately 2.62 million units. This decline in a major manufacturing hub highlights the direct impact of regulatory headwinds and the competitive pressure from new energy solutions, which are effectively curbing the volume growth of diesel-based power systems.

Key Market Trends

The shift towards HVO and biodiesel compatible engines is a critical evolution, allowing operators to decarbonize assets without replacing them. This trend focuses on adapting internal combustion engines to use drop-in paraffinic fuels, ensuring compliance with emission mandates while maintaining diesel's reliability. This transition is evident in the rental sector where fleet flexibility is paramount. According to Powertrain International, April 2024, in the 'Caterpillar likes HVO for rental power solutions' article, Caterpillar reported that customers utilizing its rental power solutions through Peterson Power Systems have consumed over 8 million gallons of hydrotreated vegetable oil since 2022 to meet sustainability goals.

The integration of hybrid diesel-renewable energy systems is increasingly characterizing the market, moving beyond standalone generation to sophisticated microgrid configurations. This trend utilizes battery energy storage systems (BESS) to handle variable loads, allowing diesel units to operate only at peak efficiency or provide backup during renewable intermittency. This synergy addresses fuel volatility while ensuring the uptime required by critical applications. According to Climate Insider, June 2024, in the 'Aggreko Increases Battery Investment to $200m to Support Energy Transition' report, Aggreko expanded its global investment in mobile battery energy storage solutions to approximately $200 million to facilitate the adoption of these hybrid architectures.

Segmental Insights

The portable segment is anticipated to witness the fastest growth in the Global Diesel Gensets Market, fueled by the rising necessity for mobile power in the construction and mining sectors. As infrastructure projects expand into remote and off-grid locations, operators heavily rely on portable units for flexible, on-site electricity generation. Furthermore, inconsistent grid infrastructure in emerging economies drives the adoption of these generators among small commercial enterprises ensuring operational continuity during power failures. This surge is also supported by the segment's ease of deployment for emergency disaster recovery applications.

Regional Insights

Asia Pacific dominates the Global Diesel Gensets Market, primarily driven by rapid industrialization and extensive infrastructure development in emerging economies like China and India. The region serves as a global manufacturing hub where continuous energy is essential for production, necessitating robust backup solutions to counter frequent grid instability and power deficits. Additionally, accelerating urbanization has amplified the demand for reliable electricity in commercial sectors, particularly for expanding data centers and telecommunications networks. This sustained reliance on diesel generators to ensure operational continuity solidifies the region's leading market position.

Recent Developments

• In August 2025, Caterpillar Inc. introduced the Cat D1500 diesel generator set, which delivers 1.5 MW of standby power. Powered by a compact 32.1-liter Cat C32B engine, the new model was designed to occupy up to 13% less floor space and weigh 32% less than previous units with similar power ratings. This launch addressed the needs of customers with space-constrained installations in North America. The generator set also features integrated remote monitoring capabilities and compliance with U.S. EPA Tier 2 emission standards for stationary emergency use, ensuring it meets strict regulatory requirements for backup power applications.
• In October 2024, Himoinsa launched the HGY Series of diesel generators during a major event in Madrid, Spain. Developed in collaboration with Yanmar Power Technology, these generator sets are powered by Yanmar engines and offer a power output ranging from 1250 kVA to 3500 kVA. The series targets mission-critical sectors such as data centers and large industrial facilities where reliability is paramount. Himoinsa highlighted that these units are future-proofed for alternative fuels and include extended service intervals to reduce operating costs. The collaboration leveraged Yanmar’s engine expertise to enhance the performance and durability of the new power solutions.
• In September 2024, Perkins unveiled its new 2606 diesel engine, which was purpose-built for the electric power generation market. This 13-liter, six-cylinder engine is based on the industrial 2600 Series platform and offers a prime power range of 321 kW to 523 kW. It is designed to operate in unregulated territories and features a compact, power-dense architecture that simplifies installation for original equipment manufacturers. The engine supports the use of renewable liquid fuels such as 100% hydrotreated vegetable oils (HVO), enabling operators to reduce their carbon footprint. Commercial production was scheduled to begin in the second half of 2025.
• In April 2024, Cummins Power Generation expanded its Centum Series by launching two new diesel generator sets, the C2750D6E and C3000D6EB. Powered by the robust QSK78 engine, these models deliver 2750 kW and 3000 kW of power, respectively. They were engineered specifically for critical applications such as data centers, wastewater treatment plants, and healthcare facilities, offering high power density in a smaller footprint. The company emphasized that these generators are approved for use with paraffinic fuels, including hydrotreated vegetable oil (HVO), without requiring engine modifications, thereby allowing operators to significantly lower their carbon emissions while maintaining performance.

Key Market Players

• Atlas Copco AB
• Caterpillar Inc.
• Cummins Inc.
• Doosan Corp.
• Generac Holdings Inc.
• Kirloskar Oil Engines Ltd
• Kohler Co.
• Wartsila Corporation
• Mitsubishi Heavy Industries Ltd
• Rolls-Royce Holding PLC

By Power Rating	By Portability	By Application	By End User	By Region
Below 75 kVA 75-375 kVA 375-750 kVA and Above 750 kVA	Stationary and Portable	Continuous Load Peak Load and Standby Load	Residential Commercial and Industrial	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Diesel Gensets Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Diesel Gensets Market, By Power Rating:

• Below 75 kVA
• 75-375 kVA
• 375-750 kVA and Above 750 kVA

• Diesel Gensets Market, By Portability:

• Stationary and Portable

• Diesel Gensets Market, By Application:

• Continuous Load
• Peak Load and Standby Load

• Diesel Gensets Market, By End User:

• Residential
• Commercial and Industrial

• Diesel Gensets Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE