APAC Data Center Generator Market Landscape 2024-2029

INDUSTRY INSIGHTS

The APAC data center generator market by investment was valued at USD 1.88 billion in 2023 and is expected to reach USD 3.38 billion by 2029, growing at a CAGR of 10.32% during the forecast period. In the APAC region, Japan has innovated generators using various fuels such as DRUPS, fuel cells, and natural gas. Companies such as Hitachi Energy, FuelCell Energy, Bloom Energy, Panasonic, and Toshiba Fuel Cell Power Systems offer advanced generator solutions, enhancing efficiency for data center operators. Also, in 2024, global investors are preparing for significant mergers and acquisitions in Asia Pacific's data center sector, driven by the rising demand for digital infrastructure fueled by AI. The region, led by Japan, has been a focal point for deals in the global data center market. This trend is expected to spur the development of advanced generators utilizing renewable energy sources, meeting AI technology's increased power demands and enhancing IT infrastructure efficiency. Furthermore, the rise of fuel cell generators poses a significant challenge to diesel generator systems, which are projected to gain widespread adoption by 2025 globally.

In the APAC data center generator market, leading companies such as ABB, Caterpillar, Cummins, Generac Power Systems, HITEC Power Protection, KOHLER, Rolls-Royce, INNIO, and Yanmar (HIMOINSA) dominate. They offer generator systems with proprietary engines and integrate engines from MTU, Perkins, Mitsubishi, Deutz, Volvo, Iveco, FG Wilson, and John Deere. Further, increased investments in cloud and colocation providers drive the demand for next-generation generators in the APAC region. Despite lagging behind Europe's leaders, such as the Netherlands, Sweden, and North America, APAC has seen a recent uptick in advanced generator adoption, particularly notable in Singapore, China, and Japan during 2023 and 2024.

KEY TRENDS

1. In the ever-changing world of data center operations, a noticeable trend toward sustainability is growing, pushing the adoption of novel solutions. One such idea in the APAC data center generator market is the integration of fuel-cell generators to meet the high-power demands of data center facilities. Equinix, for example, intends to explore the viability of using hydrogen-powered fuel cells to power its Singapore data centers.
2. AI usage is booming in APAC, particularly in China, Japan, India, Malaysia, and Singapore, driving a surge in AI data centers. Data center operators like NTT Global Data Centers and Equinix might partner with generator manufacturers to develop sustainable, renewable energy solutions to address their high-power demands.
3. Diesel generators are still the most popular choice for procurement data centers in the APAC data center generator market, yet some facilities are switching to gas generators. For instance, the Tokyo Otemachi Data Center of Colt Data Center Services has 4,500 kVA gas turbine generators with N+1 redundancy.
4. Telecom operators in APAC are transitioning from diesel to hydrogen generators, which can run for at least 72 hours on renewable hydrogen and withstand harsh conditions. For example, in July 2024, Energys Australia installed a 10kW hydrogen generator at several cell tower sites in storm-prone areas like Coldstream and Kinglake in Australia.
5. In the APAC region, rising industrial demand has led governments to increase diesel prices, impacting the cost of operating diesel generators in data centers. For example, Malaysia's diesel prices surged by over 50% in 2024 due to the removal of fuel subsidies, driving the shift towards fuel cell generators.
6. In the APAC data center generator market, small-scale operators in developing nations such as India, Indonesia, and South Korea favor generators with less than 1 MW capacity for cost-effectiveness in modular data center setups. Additionally, portable generators are increasingly utilized in these nations.