Gensets hit hard times

According to Frost & Sullivan, with most of Europe’s shipbuilding activity migrating to the Asian countries of South Korea, China and Japan, the traditional demand for marine generator sets has dipped. This shift, coupled with the Eurozone recession and financing difficulties, has further deepened the slump in demand for new vessels and thus, marine genset suppliers have been forced to find other avenues of growth.

Frost & Sullivan’s report into the European marine generator set market finds that revenues of €163.9million were earned in 2012, and estimates this to reach €197.7million in 2017.

The company believes that although commercial, commodity vessels such as tankers and cargo ships are built in low-cost Asian countries, Europe’s reputation for building high-value ships such as cruise ships, luxury yachts, icebreakers, offshore support vessels, and tugs has kept its own shipbuilding industry alive. Another factor stoking the demand for ships and vessels, and eventually, marine gensets, is the increased oil and gas exploration and production activities as well as growth in renewable energy (especially offshore wind).

“In the future, wind farms are expected to be constructed further away from the shore and in deeper waters,” said Frost & Sullivan energy and environmental research manager Malavika Tohani. “With wind farms increasing in size, there will be a requirement for vessels that are highly specialised and fuel efficient, giving marine genset manufacturers a new customer base to supply to.”

Rising demand for oil and gas, especially from emerging economies such as China and India, has spawned demand for subsea equipment, as the number of offshore explorations for energy resources is multiplying. The need for vessels for involvement in these activities is said to bode well for the marine genset market.

The market has received a boost from industry regulations and emission limits, which drive retrofitting activities, and, therefore, the demand for gensets.

“Increasing emphasis is being placed on ‘green’ trends in the shipbuilding industry, the most important of which is greater fuel efficiency due to a rise in fuel prices,” said Mr Tohani. “However, lifecycle cost and other environmental concerns are also becoming important, thereby requiring greater R&D by engine manufacturers and subsequently, modifications by genset packagers.”

Overall, strong demand is expected for large gensets above 1MW, in line with the European focus on manufacturing high-value, specialised ships.