United Arab Emirates Diesel Genset Market By Capacity (0-100 kVA, 101-350 kVA, 351-1000 kVA, Above 1000 kVA), By Application (Standby Power, Prime Power, Peak Shaving, Cogeneration), By End-User (Residential, Commercial, Industrial, Government), By Fuel Type (Biodiesel, Hybrid), By Region, Competition, Forecast and Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 179.92 Million
CAGR (2026-2031)	8.12%
Fastest Growing Segment	Hybrid
Largest Market	Abu Dhabi
Market Size (2031)	USD 287.42 Million

Market Overview

The United Arab Emirates Diesel Genset Market will grow from USD 179.92 Million in 2025 to USD 287.42 Million by 2031 at a 8.12% CAGR. Diesel generator sets are integrated power systems combining a diesel engine with an electric generator to supply electrical energy in off-grid locations or during utility grid failures. The primary drivers supporting market growth in the United Arab Emirates include extensive infrastructure development and construction activities which necessitate consistent independent power sources. Furthermore the robust expansion of the industrial and manufacturing sectors creates a sustained requirement for reliable backup power to ensure operational continuity and prevent costly downtime.

A significant challenge impeding market expansion is the increasing regulatory framework aimed at reducing carbon emissions which encourages the adoption of cleaner renewable energy alternatives. Despite this shift the demand for traditional power solutions remains resilient due to the thriving non-oil economy. According to the GCC Statistical Center, in 2025, non-oil sectors accounted for more than 73% of the total GDP in the region. This substantial economic activity in construction and industry continues to underpin the necessity for diesel generators for energy security.

Key Market Drivers

The expansion of large-scale infrastructure and smart city projects serves as a primary catalyst for the United Arab Emirates Diesel Genset Market. As the nation executes ambitious development plans, construction sites require robust off-grid power solutions to operate heavy machinery and site offices prior to utility grid connection. This reliance is evident in mega-projects that necessitate continuous energy supplies to meet tight completion schedules, driving the procurement of commercial-grade power units. According to Gulf News, April 2024, in the 'Al Maktoum International Airport expansion' article, the government approved designs for a new passenger terminal involving a massive investment of AED 128 billion, creating a substantial pipeline for temporary power requirements. This construction activity is supported by a favorable economic climate that ensures capital availability for industrial expansion. According to the Central Bank of the UAE, in 2024, the country projected a robust growth rate of 5.2% for the non-oil gross domestic product, reinforcing the financial stability necessary to sustain these long-term infrastructure developments.

The rapid proliferation of data centers and digital infrastructure creates a critical parallel demand stream for high-capacity backup power systems. As the region positions itself as a digital hub, data center operators are procuring advanced generating sets to guarantee absolute uptime and prevent data loss during utility interruptions. These facilities require redundant power architectures to maintain cooling systems and servers, making diesel generators an indispensable component of the digital economy. Highlighting this sector's physical growth, according to Arabian Business, November 2024, in the 'Khazna to build AI data centre' article, Khazna Data Centers announced plans to construct a new facility in Ajman with a substantial IT load capacity of 100 megawatts. This trend indicates a specific shift toward higher kVA rating generators capable of supporting the dense energy loads required by modern server infrastructure and artificial intelligence processing units.

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Key Market Challenges

The increasing regulatory framework aimed at reducing carbon emissions represents a substantial barrier to the growth of the diesel genset market in the United Arab Emirates. As authorities implement stricter environmental mandates, the operational landscape for carbon-intensive machinery becomes more restrictive. These regulations impose rigorous emission standards that necessitate costly modifications to existing diesel engines or the procurement of advanced, compliant models, thereby increasing the total cost of ownership for end-users. Consequently, industrial and commercial enterprises are increasingly incentivized to shift capital expenditure toward cleaner energy alternatives, reducing the overall procurement rate of traditional diesel-powered units.

This legislative pressure effectively shrinks the addressable market for diesel generators, particularly within new infrastructure projects that must adhere to green building codes. The aggressive promotion of renewable energy creates a direct substitution effect, undermining the long-term viability of diesel as a primary power source. According to the Middle East Solar Industry Association, in 2024, the United Arab Emirates successfully surpassed 6 gigawatts of installed solar capacity to support its net-zero strategic initiative. This expanding renewable infrastructure provides a reliable and government-backed substitute for diesel generation, further eroding the market share of conventional gensets in both prime and standby power applications.

Key Market Trends

The adoption of Hybrid Solar-Diesel Power Configurations is gaining traction as operators seek to mitigate fuel volatility and operational costs. This trend involves integrating renewable energy sources with traditional diesel generators and battery storage systems to create resilient microgrids that optimize engine efficiency and reduce carbon footprints. According to UAE News 24/7, September 2024, in the 'Aggreko launches mid-size low emission Battery Energy Storage Systems in the Middle East' article, Aggreko introduced new 250 kW and 500 kW storage units in Dubai designed to operate in hybrid synchronization with diesel generators and solar arrays, allowing industrial sites to significantly reduce fuel consumption.

Simultaneously, the Transition Towards Biofuel and HVO Compatible Engines is accelerating due to stringent national decarbonization mandates. Market players are increasingly retrofitting existing fleets or procuring new units capable of running on hydrotreated vegetable oil (HVO) and biodiesel to ensure long-term regulatory compliance. According to the Emirates News Agency, March 2024, in the 'UAE reveals details of national policy on biofuels' article, the Cabinet approved a federal policy aiming to increase the consumption of biodiesel by 20% by 2050, a measure that is directly driving the shift toward alternative-fuel compliant power solutions across the country.

Segmental Insights

The Hybrid segment is currently emerging as the fastest-growing category within the United Arab Emirates Diesel Genset Market. This robust expansion is primarily driven by the national alignment with the UAE Energy Strategy 2050, which encourages reducing carbon footprints through renewable energy integration. Industrial operators, particularly in remote construction and telecommunications, are increasingly adopting hybrid solutions to optimize fuel efficiency and lower operational expenses. Consequently, these systems offer a strategic advantage by ensuring reliable off-grid power while complying with stringent environmental regulations and sustainability mandates.

Regional Insights

Abu Dhabi maintains a dominant position in the United Arab Emirates Diesel Genset Market, fundamentally driven by its extensive hydrocarbon sector and strategic industrial mandates. The emirate requires high-capacity power solutions to support the remote and demanding operations of the Abu Dhabi National Oil Company (ADNOC). Concurrently, government-led initiatives under the Abu Dhabi Economic Vision 2030 have fueled massive infrastructure projects and the expansion of the Khalifa Economic Zones Abu Dhabi (KEZAD). These factors collectively generate a critical need for reliable prime and backup power generation, distinguishing Abu Dhabi as the leading regional market.

Recent Developments

• In April 2025, Cummins Arabia and Cummins Middle East officially launched their new Battery Energy Storage Systems (BESS) at a dedicated event in Dubai, expanding their portfolio beyond traditional power generation. These new systems were introduced to complement the company's existing diesel generator offerings, providing customers with hybrid solutions for improved grid stability and peak shaving. The launch targeted key sectors such as utilities, commercial real estate, and industrial facilities that require resilient and flexible energy management. By introducing this technology, the company aimed to support the UAE's energy transition goals while maintaining its leadership in the standby and prime power markets.
• In November 2024, Aggreko Middle East was appointed as the Official Sustainability Partner by Ethara for the Yas Marina Circuit in Abu Dhabi, further solidifying its presence in the temporary power sector. Under this collaboration, the company provided a comprehensive range of energy services, including efficient diesel generators and hybrid power systems, to ensure uninterrupted operations during the Formula 1 Etihad Airways Abu Dhabi Grand Prix. The partnership focused on minimizing carbon emissions through the deployment of low-carbon technologies and advanced monitoring systems. This agreement demonstrated the company's capability to deliver reliable, large-scale power solutions for high-profile events within the United Arab Emirates.
• In November 2024, Mohamed Abdulrahman Al-Bahar, the authorized dealer for Caterpillar products in the UAE, showcased its latest energy and power solutions at the ADIPEC exhibition in Abu Dhabi. The company presented a suite of advanced technologies designed for the oil and gas sector, including high-performance engines and generator sets aimed at enhancing operational efficiency and sustainability. The exhibit emphasized the dealer's role in supporting the industry's decarbonization efforts by offering equipment that meets stringent emission standards. This participation highlighted the company's ongoing strategy to provide integrated power generation solutions tailored to the specific needs of the local energy market.
• In April 2024, Perkins Engines Company Limited launched its new 5012 series engine at the Middle East Energy exhibition in Dubai to support the region's growing demand for reliable power generation. This high-efficiency engine was specifically engineered to meet the rigorous performance standards required by critical applications such as data centers and hospitals in the Middle East. The company highlighted that the new series offered superior power density and was optimized to operate effectively in high-ambient temperature conditions. This strategic product introduction reinforced the manufacturer's commitment to providing robust propulsion and power solutions for the local diesel generator market.

Key Market Players

• Caterpillar Inc.
• Cummins Inc.
• Rolls-Royce plc
• Generac Holdings Inc.
• Kohler Co.
• Mitsubishi Heavy Industries, Ltd.
• Perkins Engines Company Limited
• Yanmar Holdings Co., Ltd.
• Kirloskar Oil Engines Limited
• Wärtsilä Corporation
• Doosan Corporation
• Deere & Company

By Capacity	By Application	By End-User	By Fuel Type	By Region
0-100 kVA 101-350 kVA 351-1000 kVA Above 1000 kVA	Standby Power Prime Power Peak Shaving Cogeneration	Residential Commercial Industrial Government	Biodiesel Hybrid	Dubai Abu Dhabi Sharjah Rest of UAE

Report Scope:

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

• United Arab Emirates Diesel Genset Market, By Capacity:

• 0-100 kVA
• 101-350 kVA
• 351-1000 kVA
• Above 1000 kVA

• United Arab Emirates Diesel Genset Market, By Application:

• Standby Power
• Prime Power
• Peak Shaving
• Cogeneration

• United Arab Emirates Diesel Genset Market, By End-User:

• Residential
• Commercial
• Industrial
• Government

• United Arab Emirates Diesel Genset Market, By Fuel Type:

• Biodiesel
• Hybrid

• United Arab Emirates Diesel Genset Market, By Region:

• Dubai
• Abu Dhabi
• Sharjah
• Rest of UAE