PUBLISHER: Stratistics Market Research Consulting | PRODUCT CODE: 1577148
PUBLISHER: Stratistics Market Research Consulting | PRODUCT CODE: 1577148
According to Stratistics MRC, the Global Decentralized Energy System Market is accounted for $21.32 billion in 2024 and is expected to reach $107.24 billion by 2030 growing at a CAGR of 30.9% during the forecast period. A decentralized energy system (DES) is a small-scale network of energy production and distribution that can function separately from the conventional central grid or in tandem with it. In order to allow communities or businesses to generate their own electricity, DES frequently uses renewable energy sources like biomass, solar, and wind. By using less fossil fuel, this system promotes sustainability, lowers transmission losses, and improves energy resilience.
According to the International Energy Agency (IEA), decentralized energy systems could supply nearly 70% of electricity to rural populations by 2030, especially in regions with limited access to centralized grids, such as sub-Saharan Africa and Southeast Asia.
Adoption of renewable energy
One major factor propelling the decentralized energy market is the worldwide transition to renewable energy. To meet strict emissions targets and fight climate change, countries are investing more and more in renewable energy sources like solar and wind. By enabling local renewable resources to be used by businesses and communities, decentralized systems lower the transmission losses that come with centralized power generation. Additionally, this regional strategy not only promotes energy independence but also sustainability, enabling areas to become less dependent on outside energy sources.
Social awareness and acceptance
Adoption of decentralized energy systems is greatly influenced by public opinion. Even though environmental issues are receiving more attention, some communities might not believe that decentralized solutions can be as reliable or effective as traditional centralized ones. Acceptance may be hampered by inaccurate or incomplete information regarding the features and advantages of these systems. Furthermore, to foster trust and inform consumers about the benefits of switching to decentralized energy sources, community engagement initiatives are crucial.
Enhanced durability and energy safety
Diversifying energy sources and lowering dependency on centralized power plants are two ways that decentralized systems improve energy security. Localized energy production can act as a dependable fallback in the event of grid outages or natural disasters, guaranteeing the continued operation of vital services. Moreover, critical infrastructure, which needs a constant power source, such as data centers, hospitals, and emergency services, needs resilience in particular.
Renewable energy sources volatility
Renewable energy sources, such as solar and wind, are naturally sporadic and variable and are therefore frequently the foundation of decentralized energy systems. Maintaining a steady power supply may become difficult as a result of this intermittency, especially when demand is high or generation is low. Energy storage technology improvements are helping to address these problems, but not all applications will be able to take advantage of the current storage options due to their lack of sufficient or cost-effectiveness. Additionally, customers may be discouraged from adopting decentralized systems because of this unpredictability if they have reliability concerns.
The COVID-19 pandemic has caused major disruptions and alterations in consumption patterns in the energy market. At first, lockdowns in over 100 countries caused a sharp drop in energy demand, especially from the industrial sectors. This led to fluctuations in energy prices and the stock values of energy companies. However, as utilities adjusted to new consumption dynamics brought on by remote work and rising residential energy use, the pandemic also hastened the adoption of digital technologies and smart grid solutions. In order to help customers optimize their energy usage, this change in the market led to an increase in demand for time-sensitive pricing plans and energy management tools.
The Solar Power segment is expected to be the largest during the forecast period
The segment with the largest share is predicted to be solar power. The scalability, declining costs, and broad applicability of solar energy across residential, commercial, and industrial sectors have made it a leading technology. Moreover, adoption has also been accelerated by improvements in efficiency and affordability brought about by developments in solar technologies, such as photovoltaic cells and solar thermal systems. Solar energy installations are expanding quickly, putting them at the forefront of the decentralized energy landscape owing to global government incentives and supportive policies.
The Municipalities segment is expected to have the highest CAGR during the forecast period
In the market for decentralized energy systems, the municipalities segment is anticipated to grow at the highest CAGR. Growing urbanization and the need for cities to improve their energy sustainability and resilience are the main drivers of this growth. In order to meet local energy demands and lessen dependency on centralized power sources, municipalities are increasingly implementing decentralized energy solutions, such as micro grids and renewable energy installations. Additionally, municipalities are further encouraged to invest in decentralized systems by government initiatives that support the adoption of renewable energy and climate action plans, which position them as important players in the shift to sustainable energy practices.
Due to its aggressive climate policies and strong commitment to the adoption of renewable energy, the Europe region holds the largest share of the market for decentralized energy systems. Strong frameworks supporting decentralized energy generation are being implemented by leading nations like Denmark, Germany, and the United Kingdom. European nations have established significant targets for renewable energy, aiming for substantial reductions in greenhouse gas emissions and an increased share of renewables in their energy mix. Furthermore, government incentives and investments in smart grid technologies support this proactive approach by making it easier to integrate distributed energy resources.
In the market for decentralized energy systems, the Asia-Pacific region is anticipated to grow at the highest CAGR. Increased investments in renewable energy technologies, especially in nations like China and India that are rapidly increasing their renewable capacity, are the primary cause of this rapid growth. Governments in the area are adopting decentralized energy solutions like micro grids, solar power, and wind power in response to the region's varied energy needs as well as the growing need for energy independence and sustainability. Moreover, off-grid and decentralized power systems are promoted as viable alternatives in many areas due to the absence of a reliable grid infrastructure.
Key players in the market
Some of the key players in Decentralized Energy System market include BYD Company, Schneider Electric, General Electric (GE), Eaton, MAN Energy Solutions, Panasonic, Exide Technologies, ABB Ltd., Siemens, ENGIE, LG Chem, Johnson Controls, Liebherr, S&C Electric Company and Honeywell.
In September 2024, BYD Automotive GmbH and Hedin Mobility Group have entered into an agreement for the sale of the subsidiary Hedin Electric Mobility GmbH, the appointed Dealer+ of BYD vehicles and spare parts in the German market. The transaction also includes a business transfer of the two pioneer stores in Stuttgart and Frankfurt which are operated by Hedin Mobility Group's German retail division.
In May 2024, Schneider Electric has signed a strategic agreement with the Taiwanese-based battery manufacturer ProLogium. Schneider Electric and ProLogium will combine their expertise to develop smart manufacturing and energy management systems and optimize the production of Lithium Ceramic Batteries in ProLogium's gigafactory in Dunkirk.
In March 2024, ABB is collaborating with Green Hydrogen International (GHI) on a project to develop a major green hydrogen facility in south Texas, United States. As part of the Memorandum of Understanding (MoU) ABB's automation, electrification and digital technology will be assessed for deployment at GHI's Hydrogen City project.