Asia Pacific Power Rental Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Asia Pacific Power Rental Market Insights

• With temperatures in Asian countries reaching over 40 degrees, end users have increased their investment in backup power supplies.
• The presence of favourable government initiatives in India such as Make in India is contributing to power rentals demand in Asia Pacific’s manufacturing sector.
• As per industry reports, China had presence of 449 data centres in 2023 and the number is anticipated to rise due to the explosive growth of data use.
• In 2022, India experienced one of its most severe heatwaves, with temperatures soaring above 47°C (116°F) in parts of the country, leading to significant power demand.

Asia Pacific Power Rental Market Analysis

Power outages due to factors such as weather changes, grid issues, and maintenance can be observed in the Asia Pacific region, which has subsequently increased the demand for energy sources, such as power rentals. In February 2022, Japan's power utilities anticipated a reserve power supply capacity ratio of 5.8%, lower than the recommended 8%. The power supply deficit increased the demand for backup power, further increasing the adoption of power rentals. Furthermore, growth of the Asia Pacific power rental market is being driven by the expansion of the commercial spaces including malls, hotels, and retail stores, further necessitating the use of rentals at times of unexcepted power deficits.

Among type of power rentals, diesel generators are increasingly being adopted in countries such as India and China, due to the advances in the manufacturing sector and increasing demand for power in construction projects. In 2022, the construction sector in China witnessed a total output value of over 31 trillion yuan (USD 4.34 trillion). Diesel generators produce lesser greenhouse gas emissions, further increasing their demand and resulting in overall Asia Pacific power rental market expansion.

Furthermore, businesses adopting power rentals benefit from the absence of ownership costs, rapid and easy availability of generators for renting, lowered maintenance issues, almost zero downtime, and quick substitutions, among others. The rapid expansion of the manufacturing sector in countries such as Indonesia, China (PRC), Malaysia, and Thailand are significantly contributing to the Asia Pacific power rental market growth. As per industry reports, in Q1 2023, the manufacturing sector experienced a remarkable growth of 4.67% (y-on-y) in Indonesia.

Asia Pacific Power Rental Market Trends

Surge in Industrialisation and Urbanisation

Rapid industrialisation and urbanisation across the Asia Pacific region are creating a surge in power rental demand, particularly in regions with inadequate or unstable grid infrastructure. For instance, India's urban population is expected to reach 600 million by 2031, increasing electricity demand. Countries like Indonesia and Vietnam are also witnessing accelerated industrial growth, leading to frequent power shortages and grid instability. In response, power rental companies are stepping in to ensure uninterrupted operations. Companies such as Atlas Copco and APR Energy have been addressing peak demand challenges during industrial expansions, especially in Indonesia’s mining industry, where stable power supply is crucial. This trend in Asia Pacific power rental market is expected to grow in the forecast period.

Rising Demand from Infrastructure Projects

The booming infrastructure sectors in countries like China, India, and Southeast Asian nations, due to increasing government-led projects and urbanisation, are driving significant demand for power rental services. For example, India’s Smart Cities Mission and China’s Belt and Road Initiative (BRI) continue to push demand for reliable and temporary power solutions. Rental power offers flexibility and cost-efficiency, allowing construction firms to manage power needs without incurring high capital expenditures. Companies such as Aggreko have provided generators to large-scale projects like the Delhi Metro in India, underscoring the role of rental power in supporting infrastructure development.

Asia Pacific Power Rental Industry News

September 2024

As per industry reports, India's power consumption is projected to reach 3,000 TWh by 2030, driven primarily by the growth of electric vehicles (EVs) and data centers. The EV market is expected to see significant expansion, with a target of 30% penetration on Indian roads by 2030, while data centers are anticipated to become one of the largest power consumers as digital infrastructure grows in future. Additionally, substantial investments in infrastructure projects will further boost domestic and industrial power rental demand growth in Asia Pacific and its countries.

September 2024

India has awarded 12.8 GW of new thermal capacity in the first 100 days of the new government to meet rising energy or power demands, with a goal of adding 80 GW by 2032. This initiative is part of the National Electricity Plan aimed at addressing a projected peak demand of 458 GW by 2032. The plan also includes significant investments in expanding the transmission network and integrating renewable energy sources into the power grids.

Opportunities in Asia Pacific Power Rental Market

The market offers vast opportunities, driven by industrial expansion and the increasing reliance on temporary power solutions. For example, Indonesia’s power demand is expected to grow by 7% annually through 2030 due to rapid industrialsiation, while Vietnam’s industrial output is rising at 9.7% per year, causing frequent power shortages. This creates significant Asia Pacific power rental market opportunities to support sectors like manufacturing, oil & gas, and mining.

Moreover, in disaster-prone regions like Japan and the Philippines, natural disasters disrupt power supply regularly. Philippines experiences an average of 20 typhoons annually. After Typhoon Haiyan, APR Energy provided 40 MW of rental power to the country, underscoring the market's need for emergency power solutions. Additionally, the booming data center industry, which is growing rapidly across Southeast Asia, particularly in Singapore and Malaysia, presents opportunities for rental companies to offer backup power solutions.

Asia Pacific Power Rental Market Restraints

Several factors are acting as restraints in the market, including stringent environmental regulations, fluctuating fuel prices, and the growing adoption of renewable energy. Governments across the region, particularly in countries like Japan, Australia, and South Korea, are imposing stricter emissions standards to combat climate change. For instance, Japan has pledged to reduce carbon emissions by 46% by 2030, which makes diesel-powered rental generators less appealing due to their high emissions.

Additionally, volatile fuel prices, driven by global oil market fluctuations, can increase operational costs for rental power providers, squeezing profit margins and impacting power rental demand forecast in Asia Pacific. As per industry reports in India, diesel prices surged by 30% in 2022, leading to higher rental costs, discouraging companies from using traditional generator solutions. Furthermore, the increasing focus on renewable energy infrastructure, with China and India aiming for 33% and 40% renewable energy capacity by 2030, is reducing the demand for conventional rental power solutions, as businesses seek cleaner alternatives like solar and battery storage systems.

Asia Pacific Power Rental Market Dynamics

Rising heatwaves in India and the U.S. are influencing the market dynamics due to their impact on energy demand and grid reliability. As per industry reports, temperatures soared above 48°C (118°F) in northern and central parts of the India in summer of 2024, exacerbating an already high electricity demand. Moreover, in May 2024, India recorded a peak power demand of over 225 GW, surpassing the previous year’s all-time high. The heatwave led to frequent power outages in states like Uttar Pradesh, Rajasthan, and Maharashtra. As a result, industries, hospitals, and even commercial buildings turned to power rental services for emergency backup solutions, resulting in increased Asia Pacific power rental market revenue.

Similarly, the U.S. faced extreme heatwaves in 2023, especially in states like Texas and California, where temperatures exceeded 110°F (43°C) in several regions. These heatwaves caused a surge in electricity consumption for air conditioning and cooling systems, pushing the grid to its limits. In Texas, electricity demand reached 85 GW in July 2024, leading to emergency alerts and power shortages. Power rental companies like United Rentals and Sunbelt Rentals also saw a spike in demand as businesses scrambled for backup power during the heat-induced outages. Therefore, the increasing frequency of heatwaves is expected to continue driving demand for power rental services in regions vulnerable to extreme weather.

Asia Pacific Power Rental Industry Segmentation

“Asia Pacific Power Rental Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Fuel Type

• Diesel
• Gas
• Alternative Fuel

Market Breakup by Rating

• Up to 50 kW
• 51 –500 kW
• Above 500 kW

Market Breakup by Application

• Peak Shaving
• Standby Power
• Prime/Continuous Power

Market Breakup by End Use

• Utilities
• Oil and Gas
• Events
• Construction
• Mining
• Manufacturing
• Data Centres
• Others

Market Breakup by Country

• China
• Japan
• India
• ASEAN
• Australia
• Others

Asia Pacific Power Rental Market Share

By Fuel Type Insights

Diesel generators continue to dominate the market as Asia Pacific is a significant consumer of diesel, with India and China leading in diesel consumption. India alone produced around 500 million barrels of diesel in 2023 to meet both industrial, energy, and transportation demands. Moreover, diesel generators remain preferred in sectors like construction and mining due to their reliability, especially in countries where grid infrastructure is inconsistent. However, diesel prices have increased by over 30% in India during 2022, which has further driven a gradual shift toward cleaner alternatives.

As per Asia Pacific power rental market overview, the natural gas segment is also gaining momentum, particularly due to its lower emissions compared to diesel. Asia Pacific accounted for 40% of global natural gas consumption in 2023, with countries like Australia, Japan, and China being major producers. In addition, Australia produced 144 billion cubic meters of natural gas in 2023, This rising gas production is fuelling demand for gas-powered rental generators across industries.

However, the alternative fuel segment, which includes hybrid systems and renewable energy sources like solar and wind, is experiencing the fastest growth. In 2023, renewable energy capacity in the Asia Pacific region increased by 17%, with solar power leading the way. Moreover, China and India has a target of producing over 330 GW and 175 GW of solar energy by 2025. These numbers reflect a growing shift toward hybrid and renewable energy solutions in the Asia Pacific power rental market. Companies like Sunseap Group in Singapore are capitalising on this trend by offering solar-powered rental systems, especially for data centers and remote areas.

By Rating Insights

Up to 50 kW segment caters to small-scale applications such as residential backup, small events, and minor construction sites. It accounts for a smaller portion of the overall market but is crucial for regions with frequent power outages. In 2023, demand for generators up to 50 kW grew by 5% in countries like India and the Philippines, where power outages due to infrastructure limitations are common. For instance, small businesses in rural India increasingly rent generators for temporary backup during frequent power cuts in peak summer months, resulting in higher rental market share in Asia Pacific.

The 51–500 kW segment, however, covers a wide range of industrial applications such as construction, mining, and mid-sized events. Countries like Indonesia, China, India, and Vietnam saw increased demand in this category due to their expanding industrial operations and infrastructure projects. For example, large-scale construction projects in Indonesia’s new capital city, Nusantara, have relied heavily on generators in the 100–300 kW range to manage power demands on-site.

Above 500 kW segment saw significant growth in countries like Australia and China, where large-scale mining and manufacturing operations have a need for high-power rental solutions. According to Asia Pacific power rental industry analysis, Australia’s mining sector, which contributed 11% of the country’s GDP, increasingly depends on generators above 500 kW for remote operations.

By Application Insights

Peak shaving is gaining traction in the Asia Pacific region, particularly in countries with high industrial activity and fluctuating power demand. This application involves using rental generators during periods of peak demand to reduce the load on the primary power grid, helping companies avoid high electricity costs. For instance, in 2023, manufacturing plants in China and India increasingly used peak shaving solutions to manage energy consumption as power tariffs surged during peak hours. China’s industrial sector alone accounted for nearly 70% of electricity consumption in 2023, further boosting demand for peak shaving solutions in Asia Pacific power rental market.

The standby power segment caters to regions prone to power outages, such as India, the Philippines, and Indonesia. Standby generators provide temporary power during unexpected grid failures, ensuring continuous operations in sectors like healthcare, telecommunications, and data centers. Moreover, in 2023, India experienced over 400 power outages, driving significant demand for standby generators across commercial and residential sectors. As grid overloads become more common in Asian countries, Asia Pacific power rental market value is expected to increase.

Continuous power rental solutions are highly used in remote locations, mining sites, and large-scale infrastructure projects, where grid access is limited or non-existent. This segment is crucial in countries like Australia, where mining operations contributed 11% of the country’s GDP in 2023, requiring continuous power for remote and off-grid sites. Similarly, infrastructure projects under China's Belt and Road Initiative are heavily reliant on prime power solutions to smoothly run operations, driving Asia Pacific power rental market demand.

By End Use Insights

The utilities sector is a major consumer of rental power services for grid stabilisation and emergency backup during peak demand periods and power shortfalls. In 2023, Vietnam experienced grid failures due to the rapid growth in electricity demand, leading the government to rely on rental power to support the grid. Similarly, Malaysia used rental generators during maintenance at power plants to avoid blackouts. Companies like APR Energy have provided emergency power to utilities across Southeast Asia, driving Asia Pacific power rental industry revenue.

The construction sector also drives significant demand for power rentals, particularly for infrastructure projects and remote site developments. In 2023, Thailand's Eastern Economic Corridor (EEC), a major infrastructure initiative, increased demand for rental power to supply construction sites far from the main grid. Similarly, Indonesia’s new capital city project, Nusantara, has seen heightened demand for rental power solutions offered by companies like Caterpillar Inc.

The oil and gas sector remains a major contributor to the Asia Pacific power rental market growth, particularly in production sites where grid access is limited. Countries like Indonesia are also heavy users of rental power for offshore rigs. Additionally, the events industry, including concerts, festivals, weddings, and large gatherings, heavily relies on rental power to ensure uninterrupted operations of lighting, sound, and staging. For example, in 2023, countries like Japan and Australia saw increased demand for rental generators to power large-scale public events, such as the 2023 Rugby World Cup in Japan.

Asia Pacific Power Rental Market Regional Insights

China is one of the largest markets for power rental services, driven by rapid industrialisation and infrastructure projects like the Belt and Road Initiative (BRI). The country’s manufacturing and construction sector has also created steady demand for rental power solutions. The government’s aim to achieve carbon neutrality by 2060 is further driving the adoption of cleaner rental power technologies, such as gas and hybrid generators. Thus, China’s growing focus on renewable energy is also influencing the Asia Pacific power rental market landscape.

Japan’s power rental market is influenced by the country’s ageing infrastructure, frequent natural disasters, and stringent environmental regulations. After the 2011 Fukushima disaster, Japan has been cautious about power reliability, especially in the wake of earthquakes and typhoons. In 2023, typhoon season once again disrupted power grids, leading to increased demand for standby rental power solutions in sectors like healthcare and critical infrastructure. As per Asia Pacific power rental market report, Japan is targeting a 46% reduction in carbon emissions by 2030, which has also hastened the shift towards gas and renewable energy-based rental solutions.

India’s power rental market is growing at the fastest rate, driven by frequent power outages and infrastructure development. In 2024, India faced severe heatwaves that pushed peak power demand to 225 GW, leading to widespread power shortages. This spurred a surge in demand for standby and peak shaving rental solutions across industries, especially in manufacturing, construction, and mining. Major cities like Delhi and Mumbai also rely on rental power solutions during summer months when grid demand is high. Furthermore, the government's focus on renewable energy, aiming to achieve 175 GW of renewable capacity by 2025, is influencing Asia Pacific power rental market dynamics and trends.

Australia’s power rental market is largely driven by its remote mining operations and harsh climatic conditions. The country’s mining sector, which contributed 11% to GDP in 2023, relies heavily on continuous power solutions for remote sites, where grid access is limited. Companies like Sunbelt Rentals and Aggreko have provided prime power rental solutions to mining projects in Western Australia. Additionally, Australia’s commitment to reducing carbon emissions by 46% by 2030 is accelerating the adoption of gas-powered and hybrid systems in the rental market. Solar and wind farms in the country’s vast rural areas also use rental power for construction activities.

Innovative Start-ups in Asia Pacific Power Rental Market

Start-ups are focusing on offering sustainable and innovative energy solutions to meet the region’s growing demand for reliable power. They are increasingly integrating renewable energy sources, such as solar and battery storage, into rental services to address both environmental regulations and the need for cleaner alternatives. Additionally, start-ups are leveraging digital technologies like IoT and AI to improve energy efficiency, reduce operational costs, and offer real-time monitoring. These companies are mainly targeting industries like construction, mining, and data centers. Some start-ups that have positively impacted Asia Pacific power rental market outlook are:

Sunseap Group was founded in 2011 and is based in Singapore. It was the first company to secure a power purchase agreement (PPA) for a floating solar farm in Southeast Asia. It provides solar energy rental solutions to commercial and industrial clients in Asia. The company specifically offers solar power generation, solar leasing, and energy storage solutions for businesses and government sectors.

Yoma Micro Power, founded in 2017 and headquartered in Yangon, Myanmar, has emerged as a key player in providing off-grid and microgrid power solutions, particularly in remote and rural areas of Myanmar. The company has built more than 250 microgrids, delivering renewable energy to telecom towers and rural communities, reducing dependency on diesel generators. The company provides solar-powered microgrids, combined with battery storage systems (BSS).

Competitive Landscape of Asia Pacific Power Rental Market

Market players are focused on improving their product offerings to meet the rising demand for backup power from diverse end use sectors. They are also increasing investments in power generation, particularly in China, India, and South Korea, which are emerging as key hubs for power plant companies. This growth is driven by rising demand across sectors such as construction and manufacturing, alongside favourable government policies promoting foreign investments. Additionally, they are leveraging technological advancements and integrating renewable energy sources in power grids to meet the growing energy needs of the APAC region.

Key Industry Players in Asia Pacific Power Rental Market

Atlas Copco AB, founded in 1873 and based in Stockholm, Sweden, started as a manufacturer of railroad equipment and has evolved into a leader in industrial tools and equipment, focusing on sustainable productivity solutions across construction and manufacturing sectors.

Caterpillar Inc., founded in 1925 and headquartered in Illinois, United States, is renowned for its heavy machinery and engines. It provides solutions for construction, mining, and energy sectors by integrating innovation and sustainability in power generation and equipment rental.

Cummins Inc., founded in 1919 and headquartered in Indiana, United States, specialises in engine manufacturing and power generation systems. The company is committed to developing cleaner, more efficient technologies to support various industries worldwide.

Generac Holdings Inc., founded in 1959 and headquartered in Wisconsin, United States, is a leading manufacturer of backup power generation products. It focuses on residential and commercial power solutions by providing portable generators and energy storage systems.

Other Asia Pacific power rental market players include Johnson Controls International Plc, Aggreko Ltd., Nishio Group (United Power & Resources Pte. Ltd), Fuji Technical Services Pvt Ltd., Modern Energy Rental Pvt. Ltd., and Perennial Technologies, among others.

Recent Developments Leading to Asia Pacific Power Rental Market Growth

September 2024

Aggreko has launched two new mid-size, low-emission Battery Energy Storage Systems (BESS) in the Middle East, available in 250 kW and 500 kW configurations. These fully integrated, plug-and-play solutions aim to enhance energy efficiency and support the integration of renewable energy sources while reducing emissions. The launch aligns with Aggreko's commitment to providing innovative energy solutions in Asia Pacific power rental market.

September 2024

According to the Ministry of New and Renewable Energy (MNRE), India achieved a significant milestone of installing 200 GW of non-fossil fuel-based power and solar power has driven the country's renewable target of 500 GW by 2030. Moreover, Asia Pacific power rental market statistics shows that non-fossil renewable installed power stood at 199.58 GW by the end of August 2024 in India, including renewable energy sources like small hydro, bio, solar, and wind at 152.6 GW. 

September 2024

India is projected to add 23 GW of solar power capacity in 2024, marking a 77% year-on-year increase, according to a report by Ember. This rising solar power capacity can drive ‘alternative fuel’ segment’s growth in Asia Pacific power rental market.