The global backup power market provides emergency power during utility power outages to various end-use industries such as industrial, commercial, and residential. Backup power generators use diesel, natural gas, propane, or petrol to generate electricity during blackouts. They help in preventing data loss, equipment damages, and financial losses by providing continuous supply of electricity. Battery energy storage units are also used as backup power solutions for short-term blackouts and outages. The increasing adoption of lithium-ion batteries due to their high energy density and longer lifespan has boosted their demand across multiple end-use verticals.
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.
The global backup power market is driven by the growing need for uninterrupted power supply across various sectors. Aging power infrastructure in developed countries and developing nations experiencing power outages more frequently are prompting end-users to adopt backup power solutions. Various industries require a continuous and reliable power source to prevent production halts and protect sensitive equipment. Data centers, healthcare facilities, telecom towers, and manufacturing plants rely heavily on backup power systems. Battery energy storage is emerging as an alternative to diesel generators for providing backup during short-term power failures ranging from a few minutes to a few hours. Technological advances are improving the efficiency, lifespan, and charging abilities of various battery chemistries.
Market Dynamics:
Increasing adoption of battery energy storage alternatives is expected to drive growth of the backup power market. As mentioned in the heading, battery energy storage solutions such as lithium-ion batteries are gaining traction as backup power sources for their higher energy density and longer lifespan compared to traditional lead-acid batteries. Government incentives and investment in microgrid projects utilizing solar PV and battery storage are making decentralized renewable energy-based backup power economically viable. Lithium-ion batteries provide backup for a few hours which is sufficient for most short-term outages. Their lower maintenance requirements and operational costs compared to diesel generators are increasing preference among commercial and industrial consumers. However, high initial costs of battery energy storage systems and limited backup duration are restraining complete replacement of conventional generator-based backup power. On-going research & development in battery technologies is anticipated to make energy storage more affordable and suitable for longer-duration backup in the coming years.
Segment Analysis
The backup power market is segmented by power rating, by end-user and by battery technology. The power rating segment is further divided into less than 100 kVA, 100-350 kVA, 350-1000 kVA and above 1000 kVA. Among these, the 100-350 kVA segment currently dominates the market due to increasing adoption of these systems across various industries for supporting critical loads.
PEST Analysis
Political: Government initiatives to increase electrification rates in rural areas across various countries are boosting the market.
Economic: Rising energy costs are encouraging industries and commercial establishments to adopt backup power solutions to reduce expenses. Additionally, focus towards decreasing carbon emissions is driving market growth.
Social: Increasing power outages due to aging grid infrastructure and natural calamities are raising public demand for backup power systems for ensuring uninterrupted operations.
Technological: Advancements in lithium-ion batteries and inverter technologies have improved the efficiency of backup power solutions. The emergence of smart generators is also facilitating remote monitoring and control.
Key Takeaways
The Global Backup Power Market Growth is expected to witness high over the forecast period supported by rising investments in developing reliable power supply infrastructure across nations. 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.
Regional analysis comprised:
The Asia Pacific region comprises over 40% share of the global backup power market led by China, India and other South East Asian countries. The region is expected to grow at a CAGR of around 6.5% during the forecast period driven by rising power outages and investments towards developing industrial infrastructure.
Key players related content comprised:
Key players operating in the backup power market are 3M Company, Caterpillar Inc., Cummins Inc., Tesla Inc., Kokam and LG Chem Ltd. 3MCompany is a technology leader in ultracapacitor technology for backup power solutions.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it