Low hanging fruit - Top Dead Center - shakeout looms in hot electric generator market

There is little doubt that power generation is going to be one of the baseline engine markets for at least the rest of this decade and likely beyond.

The fundamentals are simple. Our need for quality electricity has passed absolute. If the power goes out, most businesses grind to an expensive halt. Rebooting a data center, or not being able to run CNC machines, cash registers or just plain old computers, means business doesn't happen. We don't need power, we require and demand it, and at a high quality level.

Because the power available from utilities appears to be finite for now, it has lead to the growth in what many are calling distributed power or distributed generation. A definition that is ever changing.

Originally linking existing standby sets together electronically to provide additional kW or MW without adding new units, distributed power is now seen as almost any generator set not operated by a utility. Distributed to the point of use.

Last year was a pretty decent year for power generation, at least through June. California's perceived power woes had manufacturers tossing engines and generators of all sorts into truck trailers and sending them over the Rockies as fast as they could be built. With the advent of plug and play controls, a generating system became a fast moving reality.

Where the scenario becomes familiar is in some of the grandiose numbers and projections being thrown around. Optimism has zoomed past high to crazy People are getting into the business that couldn't spell EPG a year ago. The smell of money is in the water.

One company was billing itself at a recent show as a "leading manufacturer of power generation enclosures and systems." Close scrutiny revealed that a year ago they were making metal outbuildings for farms, but an order for 16 large gen-set enclosures on a rush basis put them into the EPG system and elevated them to "leading manufacturer" status.

Gen-set packagers are coming out of the woodwork. Skid, engine, generator, controls, business plan. Silencer manufacturers are making catalysts for gen-sets, catalyst manufacturers are making silencers. All to meet the EPG boom.

It's dot.com and equipment rental II. The same unbridled enthusiasm, the same price and margin crushing competition. In some cases, the same people. All, of course, supported by a well researched, infallible "business model."