News and Trends Impacting Energy Costs and Generator Prices

Posted by Jack Barry on Fri, Aug 22, 2014

predicting generator pricesWhen it comes to budgeting and plotting your purchasing strategy, the energy industry is one of the most erratic and difficult to predict costs for. Between the ebb and flow of fuel costs and figuring out when to pull the trigger on high-ticket equipment that’s critical to operations, it can be frustrating to accurately forecast a year or more in advance what the cost will be for diesel, natural gas, or the equipment it fuels. Generator prices, for example, are in part tied to the cost of the fuel they’re built to consume.


The good news is that there are headlines and trends you can keep on your radar to anticipate major dips and spikes in fuel and heavy machinery costs. Here is a primer on what to watch for to make the most cost-effective decisions around purchasing diesel fuel, analyzing generator prices, and more.

  • Inside Energy Price Fluctuations
    Any industry subject to the whims of mother nature and the current of geo-political drama is always among the most difficult to predict. Energy, namely fuel costs, may be the most difficult of all. Traditional fuels, such as oil and gas, experience price fluctuations based on severe weather, political strife, and an array of other factors. For example, if the 1.5 million barrels per day that Iraq contributes to the global oil market (roughly 1.7% of the world’s consumption) were to come offline, it could trigger a 25-percent bump in gas prices and a worldwide recession. The relationship between fuel and equipment is complicated. Generator prices for diesel-run equipment may be attractive at a given moment, but the price of fuel could spike. But if no one is buying diesel gensets, the price will drop even more. Meanwhile, hurricane season and unseasonably warm temperatures play havoc with the electrical grid. According to AgWeb, the West Coast and Southeast are expecting markedly warmer summers this year. But, domestically, if you’re in one of the 23 states (plus the District of Columbia) that has been deregulated, that competition has more than likely driven down utility costs. Then there is the intersection of increased regulation of high-emission fuels and the rise of alternative energy sources, which are a wild card in the fuel price ecosystem. There are many moving parts and pieces to predicting future fuel costs, which is why many analysts have built complicated predictive models to make guess work a little less guessing.

  • Generator Pricing and Other Equipment Concerns
    Predicting generator pricing, engine costs, and other equipment expenditures is a bit easier than forecasting the fuel they consume. Odds are that a diesel genset you’re considering today will be priced very similarly three months from now. That said, fuel fluctuations do play a role in cost structure. For instance, the increasingly rigid standards faced by marine diesel have led to a rise of dual-fuel, Liquefied Nitrogen Gas (LNG) engines, and natural gas generators. This future-proof equipment not only faces less regulatory scrutiny, but also may be poised to offer future cost savings over diesel. The result is that the aftermarket for this equipment is rabid, and new equipment is being heavily sought after, too. When demand trumps supply, prices go up. Two ways to save on equipment – regardless of the fuel it needs – are going through dealers, who may offer bulk discounts and other savings, or waiting for the new model of a particular piece of equipment to arrive and then buying the previous model. The second route is a trick that works for cars, but also for finding the best generator pricing.

There is no sure-fire science behind mastering the art of timing the purchase of bulk fuel, determining when the best generator prices will occur, or predicting other fuel and machinery costs for your maritime operation. The best game plan is to maintain some basic best practices and keep your eyes open for prime opportunities.

You can always get a great price on marine engines from Depco. Download our current inventory to see what's in stock now and check prices.

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Tags: generators, Marine Engines, Generator Sets

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