The State of the Onsite Power Generator Market By Ray Kacvinsky - - PowerPoint PPT Presentation

The State of the Onsite Power Generator Market

By Ray Kacvinsky Marathon Electric / Thomson Technology September 18, 2007 EGSA 2007 Fall Convention

Contents

• Background on EGSA Statistics
• Market History
• Early Warning Projections
• Other Industry Comments

By kW range, by speed, geographic data, imports

Quarterly Generator Shipment Survey

Modified by Ray Kacvinsky Domestic Rating Speed North American Central & South Asia/ Middle (KW) (RPM) Shipments America Europe Australia Pacific Rim East 3.0 and 3000/3600 A D Under 1500/1800 D 3.1 to 3000/3600 A A D 5.0 1500/1800 D D D D D 5.1 to 3000/3600 A A A D 10.0 1500/1800 31,978 46 694 50 27 10.1 to 3000/3600 15.0 1500/1800 3,709 167 400 53 24 15.1 to 3000/3600 30.0 1500/1800 2,133 147 400 50 24 89 30.1 to 3000/3600 50.0 1500/1800 1,738 551 310 40 24 100 50.1 to 1500/1800 3,767 1,175 338 50 24 200 150.0 1000/1200 B 150.1 to 1500/1800 870 527 78 C 168 100 250.0 1000/1200 B 250.1 to 1500/1800 1,012 397 114 C 160 100 500.0 1000/1200 B B B 500.1 to 1500/1800 781 327 91 140 C 750.0 1000/1200 B B 750.1 to 1500/1800 279 64 90 C 120 C 1,000.0 1000/1200 212 B B 1,000.1 to 1500/1800 870 90 90 C 140 C 2,000.0 1000/1200 B B B B B B 2,000.1 1500/1800 397 9 20 C 48 C to 1000/1200 B C 4,000.0 750/900 C

PRELIMINARY REPORT

(Includes estimated data) For the Quarter Ended June 30, 2007 Generators Produced in North America Exports From North America to:

PTO Generators - All Sizes

All Other Generators

By kW range, by speed, geographic data, imports

Quarterly Generator Shipment Survey

Domestic Rating Speed North American Central & South Asia/ Middle (KW) (RPM) Shipments America Europe Australia Pacific Rim East 4,000.1 1000/1200 to 750/900 C 6,000.0 600/720 6,000.1 750/900 to 600/720 8,000.0 500/600 8,000.1 750/900 to 600/720 10,000.0 500/600 10,000.1 600/720 and 500/600 Over <500/600

T otal Shipments - Q2 - 2007

47,746 3,500 2,625 253 899 589

T otal Shipments - YT D 2007

105,650 5,239 4,488 538 1,583 1,017

T otal Shipments - Q2 - 2006

53,232 1,729 1,111 173 1,684 808

T otal Shipments - YT D 2006

101,031 3,959 2,441 464 2,934 1,168 < - Less than For the Quarter Ended June 30, 2007 Generators Produced in North America Exports From North America to: All Other Generators (Continued)

PRELIMINARY REPORT

(Includes estimated data)

Observations - EGSA Statistics

– Noise – Erratic

Need to do

– Clean up – Smooth out

EGSA Reported Shipments

500.1 kW – 750 kW

200 400 600 800 1000 1200 1400 1600 1800 2000

1 9 9 7 Q 1 Q 3 1 9 9 8 Q 1 Q 3 1 9 9 9 Q 1 Q 3 2 Q 1 Q 3 2 1 Q 1 Q 3 2 2 Q 1 Q 3 2 3 Q 1 Q 3 2 4 Q 1 Q 3 2 5 Q 1 Q 3 2 6 Q 1 Q 3 2 7 Q 1

EGSA Reported Generator Shipment History

50.1 kW - 150 kW (3 quarter moving average)

1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

1 s t 9 8 3 r d 1 s t 9 9 3 r d 1 s t 3 r d 1 s t 1 3 r d 1 s t 2 3 r d 1 s t 3 3 r d 1 s t 4 3 r d 1 s t 5 3 r d 1 s t 6 3 r d 1 s t 7

Units

EGSA

EGSA Reported Generator Shipment History

500.1 kW - 750 kW (3 quarter moving average)

200 400 600 800 1000 1200 1400 1600 1800 2000

1st 98 3rd 1st 99 3rd 1st 00 3rd 1st 01 3rd 1st 02 3rd 1st 03 3rd 1st 04 3rd 1st 05 3rd 1st 06 3rd 1st 07

Units

EGSA

EGSA Reported Generator Shipment History

750.1 kW - 1000 kW (3 quarter moving average)

100 200 300 400 500 600 700 800 900

1st 98 3rd 1st 99 3rd 1st 00 3rd 1st 01 3rd 1st 02 3rd 1st 03 3rd 1st 04 3rd 1st 05 3rd 1st 06 3rd 1st 07

Units

EGSA

What do EGSA statistics say about the future? Let’s discuss one method of using them.

Rate of Change

Rate of Change

last 12 months

Ratio

= previous 12 months

for Q3, 2004

=

Q3 2004 + Q2 2004 + Q1 2004 + Q4 2003 Q3 2003 + Q2 2003 + Q1 2003 + Q4 2002

50.1-150 kW Rate of Change Curve by kW Range

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 3 r d 1 s t 3 r d 1 s t 1 3 r d 1 s t 2 3 r d 1 s t 3 3 r d 1 s t 4 3 r d 1 s t 5 3 r d 1 s t 6 3 r d 1 s t 7

500.1-750 kW Rate of Change Curve by kW Range

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 3rd 1st 00 3rd 1st 01 3rd 1st 02 3rd 1st 03 3rd 1st 04 3rd 1st 05 3rd 1st 06 3rd 1st 07 1 999 2000 2001 2002 2003 2004 2005 2006

1000.1-2000 kW Rate of Change Curve by kW Range

0.00 0.50 1.00 1.50 2.00 2.50 3 r d 1 s t 3 r d 1 s t 1 3 r d 1 s t 2 3 r d 1 s t 3 3 r d 1 s t 4 3 r d 1 s t 5 3 r d 1 s t 6 3 r d 1 s t 7

1999 2000 2001 2002 2003 2004 2005 2006

Cahners Early Warning System Rate of Change Curve

A B C D

A = Market is increasing at an increasing rate. B = Market in increasing at a decreasing rate. C = Market is decreasing at a increasing rate. D = Market is decreasing at a decreasing rate.

1.0

Challenge of Forecasting 2007

• Wild swings in rate of change in previous 3-4 years.
• All the curves are in the quadrant of increasing at a

decreasing rate or increasing at a decreasing rate and are projected to have no sales growth sometime in the next 4 quarters.

• In order to meet the projections, we have to be right on

the turnaround of the rate of change. The timing of the turnaround and the point of the turnaround are the most difficult to predict.

• Therefore this forecast is risky and will be more accurate

when it can be updated when a turn occurs.

50.1-150 kW Rate of Change Curve by kW Range

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 3 r d 1 s t 3 r d 1 s t 1 3 r d 1 s t 2 3 r d 1 s t 3 3 r d 1 s t 4 3 r d 1 s t 5 3 r d 1 s t 6 3 r d 1 s t 7 3 r d 1 s t 8 3 r d

500.1-750 kW Rate of Change Curve by kW Range

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 3rd 1st 00 3rd 1st 01 3rd 1st 02 3rd 1st 03 3rd 1st 04 3rd 1st 05 3rd 1st 06 3rd 1st 07 3rd 1st 08 3rd 1 999 2000 2001 2002 2003 2004 2005 2006

1000.1-2000 kW Rate of Change Curve by kW Range

0.00 0.50 1.00 1.50 2.00 2.50 3 r d 1 s t 3 r d 1 s t 1 3 r d 1 s t 2 3 r d 1 s t 3 3 r d 1 s t 4 3 r d 1 s t 5 3 r d 1 s t 6 3 r d 1 s t 7 3 r d 1 s t 8 3 r d

1999 2000 2001 2002 2003 2004 2005 2006

Generator - Market Summary

(EGSA Statistics)

kW 2004 2005 2006 2007 Est. (9/1) 10 – 15

• 3%

+40%

• 10%
• 30%

15 – 30 0% +40%

• 15%

+10% 30 – 50 +51% +5% +16%

• 10%

50 – 150 +12% +35% 0% +2% 150 – 250 +22% +22% +25% +5% Small Generators +25% +22% +10%

• 5%

250 – 500 +30% +15% +25% 0% 500 – 750 +78% +15% +38%

• 5%

750 – 1000 +16% +15% +15% +10% 1000 – 2000 +96% +5% +30% +25% 2000 – 4000 +71% +20% +35% +20% Large Generators +30% +15% +25% +11%

Market Summary

kW Projected 2008 10 – 15

• 10%

15 – 30 0% 30 – 50 +5% 50 – 150 +5% 150 – 250 +8% Small Generators +1% 250 – 500 +5% 500 – 750 +2% 750 – 1000 +10% 1000 – 2000 +5% 2000 – 4000 +15% Large Generators +6%

Other Perspectives of the Power Generation Market from EGSA

• Exports

Other Perspectives

2005 2006 2007 1st Half Central & South America 5906 9065 5239 Europe 5661 7751 4488 Australia 1009 1138 538 Asia/Pacific Rim 4856 10384 1583 Middle East 1262 3280 1017 Total Exports 18694 31618 12865

Exports

In Conclusion

• The Power-Gen market had seen a substantial

contraction through 2003.

• The market turned dramatically in 2004.
• EGSA statistics show strong growth until second

half of 2007

• Exogenous Factors
• Iraqi Rebuild - ??
• Strong Dollar
• Infrastructure Failure or Perception thereof
• Hurricane post / pre-builds

Paid Political Announcement

• Plan on attending the Marketing Trends

Committee this afternoon

• Those who are reporting need to make sure

they do on a timely fashion

• Mahola