Power to the people? - Top Dead Center - Column

Diesel Progress North American Edition, May, 2003

Okay, I give up. Will somebody please explain the power generation markets to me?

I have thought, and said, that electrical power generation should be a great business for many years to come.

Our need for electricity is not going to be less, right?

Yet here we sit in May 2003 and nothing much is happening.

It's said that we overbuilt for Y2K and the expected California power apocalypse, so we're stuck with a lot of spare gen-sets. Even failed dot corns are said to share some responsibility

People keep saying the rental fleets will eventually have to buy something and that will help get it going. There will definitely be some sets going into the Middle East in the next year or so, but conventional wisdom is that will do little more than flush some inventories.

Is it possible, even given the growing global need for power and even given the fact that power generation will likely be a solid baseline business for a long time, is it possible our expectations for power generation as a market were a little inflated?

For example, we've probably written 10 articles over the years about some company that was going to take all the McDonald's or Holiday Inns or Starbucks off the grid and make them nice little power generating pods.

Billions of hamburgers, but not thousands of gen-sets.

Home power generation was going to be the market of the future. And again the concepts are not crazy In the many, many planned communities being built, or to be built, as baby boomers retire, each and every one of those homes would have a generator set, running off the gas line to supply power when the electricity goes out.

There was also some thought that there might even be a massive existing home market, which eventually gave way to "okay, maybe not existing homes so much, but in new home construction..." That's logical, fold the gen-set into the mortgage and you don't feel it.

Except it hasn't happened.

On the other hand, nobody in our neighborhood had a portable gen-set five years ago, except Wilson down the street who has every kind of engine-powered thing and hand tool ever invented.

Now at least half of the homes on our suburban block have some kind of set to keep the furnace and sump pumps running. But, as of yet, no gas gen-set next to the air conditioner at the back of the house.

Ditto for cogen plants in the middle of industrial parks, or strip malls, or large apartment/condo complexes. Makes sense. Hasn't happened.

It's why power generation has always been one of my favorite markets. There are plenty of ideas, plenty of people looking to create markets where none existed before. Plenty of fresh, creative thinking.

Unfortunately, right now, not plenty of fresh dollars and cents. *

Mike Osenga

Mosenga@dieselpub.com