The Smart Energy Market is evolving towards renewable energy sources

The smart energy market comprises products such as smart grids, smart metering, home energy management systems, and other related technologies. Smart energy promotes efficient consumption and management of energy resources. It collects data on energy usage patterns and helps optimize power distribution through intelligent networking. Smart grids integrate renewable power generation from sources like solar and wind, along with energy stored using batteries. This enables two-way communication between consumers and producers for demand-side management. Smart energy provides consumers real-time insights into energy use through smart meters and mobile applications, allowing them to reduce wastage. Utilities deploy it to modernize aging power infrastructure, meet sustainability goals, and offer consumers greater control over their bills.

The smart energy market is estimated to be valued at USD 177.71 Bn in 2024 and is expected to reach USD 357.50 Bn by 2031, growing at a compound annual growth rate (CAGR) of 10.5% from 2024 to 2031.

Key Takeaways

Key players operating in the smart energy market are GE, ABB, Itron, Siemens, Schneider Electric, S&T, Landis + Gyr, Honeywell, Wasion Group, Echelon.

Smart Energy Market Demand is accelerating as utilities seek modern solutions to integrate renewable energy and ensure grid reliability amid the retiring old coal power plants. The rising cognizance about energy consumption and the requirement to reduce energy bills are the major factors driving the smart energy market growth.

Geographically, the Asia Pacific region is expected to witness the fastest growth in the smart energy market during the forecast period due to the large-scale investments being made for the modernization of power infrastructure and rapid industrialization in major economies including China and India. Countries like Japan, South Korea, Australia, and others are also deploying smart grid technologies on a large scale.

Market key trends

One of the major trends in the smart energy market is increasing investments in microgrids. Microgrids are self-sufficient small power grids that integrate distributed renewable energy sources and energy storage to supply electricity locally. They offer advantages like enhanced reliability during outages, lower carbon footprint, and ability to function disconnected from the main grid. Several organizations and communities are implementing microgrid projects globally to boost resilience and utilize clean power. This emerging trend is expected to accelerate over the next decade.

Porter's Analysis
Threat of new entrants: The threat of new entry into the smart energy market is moderate due to high capital requirement and the need for technical expertise. However, potential entrants can rely on outsourcing and partnership to enter the market.

Bargaining power of buyers: The bargaining power of buyers in the smart energy market is high. This is because of the availability of alternatives and transparency in pricing of products. Buyers can negotiate on price and demand value-added services.

Bargaining power of suppliers: The bargaining power of a few technology suppliers is high given their distinct capabilities and expertise. However, the availability of alternative component suppliers keeps their power in check.

Threat of new substitutes: Alternatives like regular energy systems pose low threat as a substitute for smart energy. However, new technologies for renewable sources of energy offer considerable threat over the long run.

Competitive rivalry: The competition in the smart energy market is high amongst major global players.

Geographical Regions:

The North American region currently leads in terms of value share in the global smart energy market. This is attributed to supportive infrastructure and government policies for digitization of energy systems. Majority of smart energy projects and investments are concentrated in the US and Canada.

The Asia Pacific region is expected to witness the fastest growth in the smart energy market over the forecast period. Factors such as ongoing Smart City projects, increasing electricity demand due to rapid urbanization and industrialization, and policy push for sustainable energy in countries like China and India are fueling market growth. Nations in Southeast Asia also present significant growth opportunities.

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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.

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