Distributed Natural Gas-Fueled Generation Market Report 2025

The distributed natural gas-fueled generation market size has grown rapidly in recent years. It will grow from $33.27 billion in 2024 to $36.88 billion in 2025 at a compound annual growth rate (CAGR) of 10.8%. The growth in the historic period can be attributed to energy security concerns, economic viability, grid resilience and reliability, energy independence, environmental considerations.

The distributed natural gas-fueled generation market size is expected to see rapid growth in the next few years. It will grow to $57.82 billion in 2029 at a compound annual growth rate (CAGR) of 11.9%. The growth in the forecast period can be attributed to renewable natural gas integration, grid decentralization initiatives, energy storage integration, government incentives and policies, resilience planning. Major trends in the forecast period include technological innovations in microgrids, advancements in gas turbine technology, technology advancements, integration with renewables, environmental considerations.

The anticipated growth in the distributed natural gas-fueled generation market is underpinned by the increasing utilization of natural gas. Natural gas, a naturally occurring flammable gas, serves as a versatile fuel source for various applications, including heating, cooking, transportation, and power generation. While predominantly used for heating and power generation, natural gas plays a role in fueled generation, contributing to the production of useful thermal output and electricity. As reported by the International Energy Agency (IEA) in July 2022, global natural gas consumption is projected to rise by 140 billion cubic meters between 2021 and 2025. This upward trend in natural gas usage is a key driver behind the growth of the distributed natural gas-fueled generation market.

The growing demand for clean energy is expected to further propel the expansion of the distributed natural gas-fueled generation market. Clean energy, derived from renewable and sustainable sources, is characterized by minimal environmental impact compared to traditional fossil fuels that emit harmful pollutants. Distributed natural gas-fueled generation stands to benefit from aligning with clean energy principles, aiming to enhance environmental performance, reduce emissions, and contribute to the development of a resilient and sustainable energy infrastructure. As of March 2023, the International Renewable Energy Agency (IRENA) reported a 10% increase in global clean energy capacity in 2022, representing a 0.4% rise from the previous year. This surge in the need for clean energy underscores its pivotal role in driving the distributed natural gas-fueled generation market.

Technological advancements are increasingly prominent in the distributed natural gas-fueled generation market, with companies leveraging new technologies to strengthen their market positions. For instance, in September 2023, Motoren Werke Mannheim AG, a German gas engine manufacturer, introduced the TCG 3020 gas engine series, along with retrofit kits for hydrogen operation, which support a hydrogen admixture of up to 25% by volume. This innovation addresses the rising demand for sustainable energy solutions and the need to meet stricter emissions regulations. Notably, the TCG 3020 engines can operate with up to 25% hydrogen admixture without requiring technical modifications, enhancing their adaptability. This capability allows operators to shift towards greener energy sources while ensuring operational efficiency remains high.

Major players in the distributed natural gas-fueled generation market are adopting a strategic partnership approach to extend the reach of their offerings, particularly focusing on the MTG power platform in Asia, Africa, and the Middle East. Strategic partnerships involve leveraging complementary strengths and resources to achieve mutual benefits and success. In September 2022, Bladon Micro Turbines Ltd., a UK-based manufacturing company specializing in microturbine gensets, announced a distribution partnership with Jubaili Bros, a Lebanon-based company offering renewable off-grid power solutions. This partnership involves the distribution of Bladon's MTG power platform across the Middle East, Africa, and Asia by Jubaili Bros. The collaboration aims to address the growing demand for reliable, robust, and clean power in various sectors, including commercial, industrial, mining, and oil and gas. Through this partnership, Bladon gains access to new markets and expands its innovative solutions, while Jubaili Bros enhances its power solutions portfolio.

In February 2022, Plug Power Inc., a US-based electrical equipment manufacturing company, acquired Joule Processing for $160 million. This strategic acquisition is geared towards expanding opportunities for liquid hydrogen globally. The goal is to achieve improved performance and cost efficiencies through optimized turnkey integration and standardization of hydrogen liquefaction plants. Joule Processing, a US-based services and process optimization company, brings advanced engineering products and services to enhance energy efficiency, project economics, and operational performance. The acquisition strengthens Plug Power's position in the distributed natural gas-fueled generation market by facilitating advancements in hydrogen-related technologies.

Major companies operating in the distributed natural gas-fueled generation market include General Electric Company, MWM GmbH, ABB Group, Cummins Inc., Shandong Lvhuan Power Equipment Co. Ltd., Redox Power Systems, Caterpillar Inc., Generac Power Systems, Mitsubishi Heavy Industries Ltd., Kohler Co. Inc., MTU Onsite Energy GmbH, Mahindra Powerol Ltd., Yanmar Co. Ltd., Coopercorp Generators, Siemens AG, Rolls-Royce Holdings PLC, Wärtsilä Corporation, MAN Energy Solutions SE, Kawasaki Heavy Industries Ltd., Sinopec, British Petroleum Company p.l.c, Chevron Corporation, Lukoil, Occidental Petroleum Corporation, ExxonMobil Corporation, Dakota Gasification Company, NRG Energy Inc., Baker Hughes Company, Halliburton, Honeywell International Inc., Royal Dutch Shell, Calix Limited.

North America was the largest region in the distributed natural gas-fueled generation market in 2024. Asia-Pacific is expected to be the fastest-growing region in the global distributed natural gas-fueled generation market report during the forecast period. The regions covered in the distributed natural gas-fueled generation market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the distributed natural gas-fueled generation market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Distributed natural gas-fueled generation encompasses the infrastructure associated with the distribution of natural gas, including pipelines, metering, and regulating apparatus found at metering-regulating stations. These facilities are typically managed by a local distribution company, which operates within a specific state. The local distribution company is governed as a distinct operating entity by a public utility commission, or it may function as an independent municipally owned distribution system.

The primary technologies involved in distributed natural gas-fueled generation include natural gas gen-sets, microturbines, and stationary fuel cells. Natural gas gen-sets are generators that utilize natural gas as a fuel source, deviating from the more traditional options of gasoline or diesel. This generation process can be implemented at various scales, including microgeneration, small-scale generation, medium-scale generation, and large-scale generation. It caters to a broad spectrum of end-users, encompassing residential, commercial, industrial, institutional, and building sectors.

The distributed natural gas-fueled generation market research report is one of a series of new reports that provides distributed natural gas-fueled generation market statistics, including the distributed natural gas-fueled generation industry's global market size, regional shares, competitors with a distributed natural gas-fueled generation market share, detailed distributed natural gas-fueled generation market segments, market trends, and opportunities, and any further data you may need to thrive in the distributed natural gas-fueled generation industry. This distributed natural gas-fueled generation market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The distributed natural gas-fueled generation market includes revenues earned by entities by providing services such as the combustion of gases to run the gas turbine and boiling of water by the exhaust gases of the gas turbine, to convert the water into steam and to drive the steam engine. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included. The distributed natural gas-fueled generation market consists of sales of ethane, propane, butanes, pentanes, and higher molecular weight hydrocarbons, which are used in providing distributed natural gas-fueled generation services. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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