25.75% CAGR Growth in the Virtual Power Plant Market from 2023 to 2028 due to the increase in the integration of renewable energy sources - Technavio
An increase in the integration of renewable energy sources is the key factor driving growth.
NEW YORK, Jan. 30, 2024 /PRNewswire/ -- The virtual power plant market is expected to grow by USD 6.55 billion from 2023 to 2028, according to Technavio. In addition, the growth momentum of the market will progress at a CAGR of 25.75% during the forecast period. An increase in the integration of renewable energy sources is the key factor driving growth. Virtual power plants (VPPs) play a crucial role in addressing the intermittent nature of renewable energy sources like solar and wind power. By aggregating and coordinating these distributed resources, VPPs enable the smooth integration of renewables into the grid. They use advanced technologies and predictive analytics to forecast renewable energy availability and align it with demand. This not only enhances grid stability but also supports the global shift towards cleaner energy, reducing reliance on fossil fuels and environmental impact. As renewable energy grows, VPPs will remain essential for optimizing their use and ensuring grid reliability. To find a preview of the market overviews, market drivers, opportunities, and potentials request a free sample report
- Increased use of artificial intelligence (AI), machine learning, and advanced data analytics is a primary trend shaping the growth.
- Lack of expertise and inadequate infrastructure is a significant challenge restricting growth.
The market is fragmented due to the presence of many global and regional players. The market comprises category-focused, industry-focused, and diversified companies. The global market is expected to grow rapidly during the forecast period due to the increase in the integration of renewable energy sources. Hence, the competition among companies is expected to intensify during the forecast. The report analyzes the competitive landscape and offers information on several companies. ABB Ltd., Alarm.com Holdings Inc., Duke Energy Corp., ENGIE SA, Generac Holdings Inc., HubSpot Inc., Kyocera Corp., Orsted AS, RWE AG, Schneider Electric SE, Siemens AG, SolarHub, Sunrun Inc., Sunverge Energy Inc., and Tesla Inc.
ABB Ltd. - The company offers ABB Ability OPTIMAX that aggregates and optimizes decentralized energy resources into a virtual power plant and helps power players thrive given new opportunities presented by the bidirectional flow of energy and information.
Alarm.com Holdings Inc. - The company offers a plant that empowers utilities to manage a cleaner, more reliable grid that bolsters affordability, and reliability and that aligns with clean energy goals under the brand EnergyHub.
Based on Technology, The demand response segment is estimated to witness significant growth during the forecast period. Demand response relies on various technologies to manage energy usage during peak demand or grid instability. Advanced metering infrastructure (AMI) allows real-time consumption monitoring, while smart grid technologies enable communication between the central control system and distributed energy resources. Additionally, machine learning and AI improve predictive capabilities, optimizing resource allocation and enabling proactive load management. These integrated technologies empower participation in demand response programs, enhancing grid stability and resource utilization.
Based on Geography, North America is estimated to contribute 38% to the growth during the forecast period. In North America, the market is growing, reshaping the energy sector by integrating distributed energy resources (DERs) and advanced technologies to optimize the grid. States and utilities are increasingly using these plants to improve grid flexibility, reliability, and sustainability. For example, utilities like Pacific Gas and Electric (PG&E) and Southern California Edison (SCE) are exploring VPPs to manage peak demand and enhance grid stability. These initiatives highlight North America's efforts to incorporate renewable energy, improve grid operations, and engage consumers in a more sustainable energy future.
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Imperative Insights on the following aspects:
- What was the size of the global market by value?
- What will be the size of the global industry in 2028?
- How has the industry performed over the last 5 years?
- What factors are affecting the strength of competition in the global market?
- What main segments make up the global industry?
Benefits and Application in Energy Market
Virtual Power Plants (VPPs) harness the potential of Demand Response, Distributed Energy Resources (DERs), and Renewable Energy Sources to create a dynamic and responsive energy ecosystem. By integrating Energy Storage Systems and leveraging Smart Grids, VPPs optimize grid operations, enhance reliability, and enable efficient utilization of resources. IoT and Machine Learning technologies enable real-time monitoring and predictive analytics, while Blockchain ensures secure transactions and peer load balancing. Microgrids and Energy Aggregators facilitate decentralized energy systems, promoting energy independence and resilience. VPPs also support Electric Vehicle Integration and offer flexibility services, contributing to sustainable energy management and carbon footprint reduction. Regulatory policies play a crucial role in shaping VPP frameworks and fostering innovation and growth.
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ToC:
Executive Summary
Market Landscape
Market Sizing
Historic Sizes
Five Forces Analysis
Segmentation by Technology
Segmentation by End-user
Segmentation by Geography
Customer Landscape
Geographic Landscape
Drivers, Challenges, & Trends
Company Landscape
Company Analysis
Appendix
About Technavio
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With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable insights to identify opportunities in existing and potential areas and assess their competitive positions within changing scenarios.
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