AI in Energy Market: Will Grow at Highest Pace Owing to Improved Energy Efficiency

The AI in energy market is witnessing significant growth owing to the rising adoption of artificial intelligence technologies across various energy applications such as demand response management, predictive maintenance, and supply chain optimization. AI helps analyze large volumes of data for useful insights that enable energy companies to make informed decisions for efficient operations. AI in energy market size solutions allow energy providers to remotely monitor assets, optimize energy usage, reduce maintenance costs, and predict equipment failures.

The global AI in energy market is estimated to be valued at US$2.5 billion in 2024 and is expected to exhibit a CAGR of 30% over the forecast period 2024-2030.

Key Takeaways

Key players operating in the AI in energy market are IBM, Microsoft, Intel, AWS, Oracle, SAP, Siemens, General Electric, and Google. Key players are focusing on collaborations and new product launches to gain a competitive edge in the market.

Growing awareness regarding the benefits of AI for enhancing energy efficiency and reducing operational costs is a major factor driving the demand for AI solutions in the energy sector. AI helps energy companies optimize power generation, improve grid reliability, enable predictive maintenance, and enhance customer services.

Technological advancements in machine learning, cloud computing, edge computing and analytics are supporting the development of advanced AI capabilities for various energy applications. 5G connectivity, industrial IoT, and edge AI will further accelerate digital transformation across the energy value chain.

Market Trends

- Hybrid cloud models are gaining popularity as they help leverage the power of cloud computing while addressing critical security and privacy requirements of the energy sector. This trend is expected to grow further.

- Edge AI promises real-time decision-making capabilities by processing data closer to where it is generated. Leading players are investing in edge AI and IoT technologies to build smart, localized energy systems.

Market Opportunities

- Growing focus on renewable energy integration and management of microgrids/virtual power plants presents significant opportunity for AI solution providers. AI can optimize renewable energy output prediction and distributed energy management.

- Adoption of AI for electric mobility can revolutionize transportation. AI supported by IoT and cloud can enable intelligent vehicle controls, autonomous charging, and demand-side grid management.

Impact of COVID-19 on AI in Energy Market Growth

The COVID-19 pandemic has impacted the AI in energy market significantly. Due to lockdowns imposed across various countries, energy consumption reduced sharply as commercial and industrial activities came to a halt. This affected the revenues of energy companies and disrupted operations. However, AI technology played a vital role in minimizing disruptions and ensuring smooth functioning.

Energy companies leveraged AI tools for predictive maintenance and optimized operations of renewable energy plants remotely. AI helped energy traders and utilities to analyze power consumption patterns and predict demand more accurately. This enabled them to plan generation and distribution accordingly. Several utilities used AI assistants and chatbots to address customer queries virtually and minimize field visits.

Though the pandemic significantly reduced energy demand initially, with vaccination drives and resumption of economic activities, demand is recovering gradually. AI solutions are helping energy companies to optimize resources, enhance efficiency and reduce costs in this transition phase. Governments across regions are focusing more on renewable energy and utilizing AI for improving reliability and sustainability of energy grids.

In the post-COVID era, AI is expected to play a pivotal role in enabling energy transition, modernizing infrastructure, supporting decarbonization targets and enhancing customer experiences. While short-term investments reduced due to the pandemic, companies are now focusing more on digitalization and AI-led innovations to build resilience for future disruptions.

Geographical Regions with High AI in Energy Market Concentration

North America dominates the AI in energy market currently, with the US accounting for a majority share. Significant technology investments by energy majors, supportive government policies and presence of leading AI companies have accelerated AI adoption in the US energy sector. Europe is another major regional market, driven by focus on modernization of infrastructure, decentralized renewable energy networks and initiatives for smart grid development across countries.

China has emerged as the fastest growing regional market for AI in energy globally. Aggressive renewable energy targets, vast network of utilities and emphasis on digital transformation make China an attractive market. Rapid technology deployment, ubiquitous connectivity and large-scale pilot projects and prove-of-concepts being undertaken indicates growth momentum will continue in the coming years.

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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)