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September 2015
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Executive Hire News › Archives › September 2015 › Market Report: Power Generation : Thirst for power

Market Report: Power Generation : Thirst for power

Demand for a reliable supply of electricity remains strong. Alan Guthrie talks to several generator suppliers about the factors driving this growth, and the hire opportunities it represents.

Factors such as the steady rise in construction activity and the on-going need for back-up power generation capability as an insurance against mains supply outages is creating strong demand for generators across many industrial markets. According to Himoinsa Power Solutions, this is encouraging more hirers to add these machines to their fleets. “More and more small and medium sized independents are buying this sort of equipment,” MD Clive Dix told EHN, “and the market is really buoyant.

“However, hirers are typically buying machines as and when customers need them, perhaps because they have to control capital expenditure as they refresh equipment across the fleets that they held onto longer during the downturn. This places importance on having stock available for quick delivery. Also, more hirers are being bolder and buying larger generators. Whereas, previously, they might have offered machines of up to, say, 10kVA capacity, more are taking 40kVA, 100kVA or, even, 200kVA units. One reason is the compact nature of the latest machines developed to meet the Stage 3a emissions regulations, resulting in models with smaller footprints that are easier to transport and install. They can do the work of several machines of lower capacity for applications like powering several welfare units, using the appropriate electrical distribution systems, giving greater overall utilisation.” One hirer actively targeting this market is Grangemouth-based Jarvie Plant, which recently ordered 47 Himoinsa sets from 35kVA to 100kVA, worth £375,000.

Martyn Drinkwater, Sales Director with Harrington Generators International (HGI), also reports strong sales to hirers. “Proving particularly popular are generators for installation into welfare units and site cabins. More hirers are targeting this market, and this also reflects the general upturn in construction activity. There is also growing demand for machines offering greater power capacity. We developed our HRD range specifically for the hire market, and we originally anticipated that the greatest interest would be in machines between 9kVA and 27kVA. However, we are currently receiving more orders for units of 100kVA and above. In the first quarter of 2015, sales of small petrol generators were also very pleasing, although demand reduced in the run-up to the general election.”

Similarly, MHM reports a very buoyant market, with steady sales to national hirers and independents, according to MD Mat Llewellyn. “As well as sales of new and used generators, our re-hire division has seen a rising demand for weekly hire, and soaring interest in generator contract hire. It shows the strength of the construction market and the fact that hirers are reacting to meet the demand.

“We have extended our generator range considerably, which has contributed to our increasing growth. Part exchange and guaranteed buy-back have also been proving very popular with our hire customers as they expand their fleets.

“Interest is also growing in hybrid generators, particularly for sites where issues such as low noise, fuel savings and emissions are important, and more local authorities are making this a priority. SDMO Energy’s General Manager, David Mallon, says that sales of small petrol generators of up to 10kVA have returned to more normal levels after the almost unprecedented demand caused by the extreme weather conditions in previous years. “Uncertainty about the general election also caused a temporary slowdown. However, our Rental Compact models remain very popular, and we have received some substantial orders from national hirers this year. Many of these sets have been used to provide power at events and concerts during the summer, and construction activity has picked up sharply.

“Machines from our Industrial range are currently flying out of the door, with a virtual doubling of sales over the previous year. Demand is coming from data centres, financial centres and other businesses needing reliable power. Hirers are understandably cautious about capital expenditure as they replenish their fleets, but many new projects are long-term in nature and so investing in appropriate generating equipment represents an obvious opportunity.”

Looking ahead, the outlook remains positive. “The National Grid is ageing, hospitals and other essential services need back-up power systems, and we keep hearing that more houses need to be built, so demand should remain very healthy,” said David Mallon. And HGI’s Martyn Drinkwater highlights the fact that, “with generators being used for applications in so many different industries, from rail infrastructure and utilities, to construction sites and events, the potential for hire business in this market is as strong as ever.” •

     
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