Growing Need For Uninterruptable Power Is Driving Backup Power Market Growth

Author : Leena Shedmake | Published On : 17 Jan 2024

Backup power refers to any secondary power source that can supply electric power to equipment when the primary power source is disrupted or cut off. It works as a complement to primary power sources such as utility grid power or primary generators. Backup power systems are typically used to provide electricity during power outages and ensure continuity of critical operations. They find widespread applications in data centers, hospitals, factories, telecommunications networks, and residential buildings to provide uninterrupted power supply and prevent equipment downtime and data loss during outages.

The global Backup Power Market is estimated to be valued at US$ 2.66 Bn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:


The growing need for uninterruptible power supply across various end-use industries amid rising power outages due to aging grid infrastructures and extreme weather events has been a key driver augmenting the growth of the backup power market. According to studies, power outages cost the global economy over $150 billion annually in lost output and wages. Moreover, businesses lose significant revenue and suffer reputational damage due to equipment downtime and data interruptions resulting from power failures. This has boosted demand for effective backup power solutions like generators and batteries to provide continuous and reliable power during grid failures. Additionally, increasing investments by governments and private entities in deploying backup power infrastructure, especially in emerging economies, are expected to further support market growth over the forecast period.

However, strict emission regulations on diesel generators, high costs associated with alternative clean technologies, and funding challenges in some regions may pose restraints on the demand for backup power systems.

SWOT Analysis

Strength: Backup power market offers reliable and autonomous solutions for power supply during power outages or grid failures. These solutions ensure business continuity and minimal disruption of operations. They provide emergency power backup for data centers, telecom towers, hospitals, and other critical infrastructure and enterprises. The market offers diverse product portfolio with power ranges from few kW to multiple MW to suit various application requirements.

Weakness: High initial installation and maintenance costs associated with backup power solutions limit their adoption, especially among small and medium enterprises. Stringent government regulations regarding generator emissions in some countries increase compliance costs for manufacturers.

Opportunity: Increasing power outages due to aging grid infrastructure and extreme weather events are driving demand for robust backup power solutions from utilities and industrial sectors. Growing deployment of distributed energy resources is augmenting opportunities for integrating backup power with microgrids and hybrid power systems. Investments in data center construction in developing nations will further boost the APAC backup power market.

Threats: Declining cost of renewable energy storage solutions poses competition to diesel generators. Growing investments in modernizing electric grids in developed economies can reduce reliance on conventional backup power over the long run. Substitution threat from natural gas generators limits the growth of diesel generators segment.


Key Takeaways

The Global Backup Power Market Size is expected to witness high growth over the forecast period supported by increasing power outages, expansion of data centers and critical infrastructure, and investments in microgrid projects. The global backup power market is estimated to be valued at US$ 2.66 Bn in 2023 and is expected to exhibit a CAGR of 5.4% over the forecast period 2023 to 2030.

The Asia Pacific region currently dominates the global market and is expected to maintain its leading position over the next decade led by China, India, Japan, and other Southeast Asian countries. These countries are witnessing rapid industrialization and construction of commercial buildings and data centers that significantly contribute to the regional demand. Additionally, power deficit issues and investments made by governments in electrifying remote areas will drive the Asia Pacific backup power market.

Key players operating in the backup power market are 3M, AGCO, Briggs & Stratton, Caterpillar, Cummins, Eaton, Generac, Kohler-SDMO, Mitsubishi Heavy Industries, MTU Onsite Energy, Schneider Electric, SIEMENS, Toshiba, and Yamaha Motor PWC. Major players are focused on product development initiatives and integrating smart grid solutions to capitalize on growing adoption of clean and hybrid power backup systems. They are also expanding their distribution networks and service capabilities across emerging markets.
 

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