Backup Power Market Poised for Steady Growth Aided by Rising Infrastructure Development Needs

Backup Power Market Poised for Steady Growth Aided by Rising Infrastructure Development Needs

Backup power systems help counter power outages by supplying backup electricity during utility grid failures. Reliability needs across infrastructure projects and the increasing instances of power outages have augmented the demand for generators, UPS systems, and batteries in recent years.

The Global Backup Power Market is estimated to be valued at US$ 3.07 Billion in 2024 and is expected to exhibit a CAGR of 5.4% over the forecast period from 2024 to 2030.

Key products in the backup power market include generators, uninterruptible power supply (UPS) systems, and batteries. Generators are combustion-based systems that use fuels like diesel, natural gas, and propane to produce electricity during outages. UPS systems provide immediate backup by utilizing electric energy stored in batteries. They ensure uninterrupted power supply for critical loads up to a few minutes. Stationary lead-acid batteries and lithium-ion batteries are used for energy storage across backup power solutions. Such systems find widespread adoption across data centers, telecom towers, industrial plants, commercial spaces, and residential setups to meet their emergency power needs. The Global Backup Power Market is driven by the increasing power outages worldwide due to grid failures and supply constraints. Furthermore, growing infrastructure development projects are also necessitating reliable backup power solutions.

Key Takeaways
Key players: Key players operating in the backup power market are 3M Company, Amphenol Corporation, Sumitomo Electric Industries, Ltd., Molex LLC, TE Connectivity Ltd., Prysmian Group, W. L. Gore & Associates, Inc., Axon' Cable, E.I. du Pont de Nemours and Company (DuPont), BizLink Technology, Yamaichi Electronics Co., Ltd., Omron Corporation, Hitachi, Ltd., Samtec, Inc., Furukawa Electric Co., Ltd.

Growing demand: The rising power outage incidents along with growing data center installations are fueling the demand for backup power solutions globally. Critical infrastructure projects and industries are also increasingly adopting generators, UPS systems, and batteries to ensure operational continuity.

Global expansion: Leading Backup Power Market Size product manufacturers are strategically strengthening their global footprint through new production facilities, partnerships, and mergers & acquisitions. The market is witnessing significant expansion across developing economies in Asia Pacific and Middle East & Africa.

Market key trends
Reliability needs across various sectors have necessitated the incorporation of advanced technologies in backup power products. Lithium-ion battery-based UPS solutions are gaining popularity due to their high energy density and efficiency. Manufacturers are also developing enhanced generators leveraging IoT and telematics for remote monitoring and operation. Furthermore, the deployment of microgrids powered by solar and other renewable energy sources is augmenting the role of energy storage systems for backup applications. Such technological advancements are poised to further drive the backup power market during the forecast period.
Porter’s Analysis

Threat of new entrants:
The threat of new entrants in the backup power market is moderate as the market requires high upfront capital investments and manufacturing infrastructure. However, as market is expected to grow at CAGR of 5.4%, opportunity for new players remains.
Bargaining power of buyers: Large buyers in the market have strong bargaining power due to the availability of variety of products from multiple manufacturers. However, as buyers have requirements of consistent power supply, their bargaining power remains moderate.
Bargaining power of suppliers: Key components suppliers have moderate bargaining power due to availability of alternatives and inability to create differentiation. However, rising demand can provide opportunities to suppliers to strengthen their position.

Threat of new substitutes:
Substitutes like renewable sources and energy storage are a potential threat. However, consistency and reliability of backups currently provide an advantage over alternatives.
Competitive rivalry: The market composed of few global players and several local and regional suppliers offering customized solutions. Intense competition on factors like pricing, quality and innovation is witnessed.

Geographical regions with market concentration:
North America and Europe account for over 60% of the global backup power market value currently, led by developed infrastructure and stringent regulations. These regions offer prospects of demand driven by factors such as data center growth and reliable supply.

Fastest growing region: Asia Pacific backup power market is poised to grow at fastest pace during the forecast period led by increasing industrialization, urbanization and emphasis on uninterrupted power supply across sectors including manufacturing, IT & telecom in countries like China and India. Supportive government initiatives will further aid regional market growth.
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