Global Virtual Power Plant Market is expected to grow at a CAGR of 28.6% during the forecast period 2022-2030


Global virtual power plant market is estimated to growat a CAGR of 28.6 % during forecast period (2022-2030). The global virtual power plant market is primarily driven by rising renewable energy generation. Increase in electricity generation from renewable sources would create a new distribution chain for electricity generation and thus would increase demand for virtual power plants. As per the U.S. Environmental Protection Agency, the use of fossil fuels such as coal for power generation is one of the major contributors for greenhouse gas emission. Thus, there has been an increase in the generation of electricity from renewable sources of energy such as solar energy, wind energy, etc. as the non-renewable sources are getting exhausted. Moreover, the share of renewable sources accounted to 22% in 2013 and increased over 25% by 2020, as per the IEA (International Energy Agency). in addition, growing government concerns towards greenhouse gas emissions and supportive government initiatives, such as the “Paris agreement” signed by 175 countries that aims at reducing the global CO2 emission by 28% till 2025 for the adoption of renewable sources of energy, has provided major stimulus to renewable energy generation.

Demand response leads the technology segment in global Virtual power plant market by capturing largest market share of over 44% in 2021. Demand response market is anticipated to rise at a highest CAGR of 28.5% during forecast periodof 2022-2030. The demand response market comprises of the energy management solution used for the virtual power plant energy management. These solutions offer efficiency for balancing supply and demand of energy. Virtual power plant (VPP) is well-defined as an assembly of storages system, controllable load systems, and discrete generator units collected as a unique power plant. The growing demand for efficient energy management coupled with the demand for continuous power supply act as major driver for the growth of demand response market. Energy stability and flexibility are essential for the entire power system due to this; demand response is used for distribution.

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Commercial and industrial sector leads the end-user segment of the global Virtual power plant market by capturing largest market share of over 72% in 2021. Commercial and Industrial market is anticipated to rise at a highest CAGR of 28.1% during the forecast period. Due to the growing concern for environmental protection owing to the exhaustion of fossil fuels (coal) resources, the virtual power plant, power network is widely adopted in commercial & industrial sector. Virtual power plant (VPP) is used to improve the distributed energy resources within the commercial & industrial location. Energy stability and flexibility are essential for the entire power system owing to this demand; various techniques of VPP are used in for power distribution in industries. These systems provide flexibility to the imbalance of generation-load, reduces peak load, electricity cost, power outage, and improves grid reliability. Since high power is required in the industries especially in production unit to run high power machine, power stability is very essential feature, owing to this there is significant adoption of VPP in industries and commercial segment. for instance, as per the climate action organization, in California VPP energy consumed in 2014 and 2,000 megawatt which is expected to reach to 4,800 megawatts by 2023, a part of this energy is used in industries. High investments in smart grid infrastructure are expected to drive the market for the commercial and industrial VPP.

Residential segment in the end-user segment of virtual power plant market is expected to rise at a highest CAGR of 29.8% in the forecast period. Technological advancement in the battery technologies, decline in the prices of photovoltaic cells coupled with growing deployment of VPP in residential sector act as a key driver for the growth of VPP in residential segment. Tesla in South Australia started its new battery project to rival the capacity of a coal plant. Under this project Tesla by 2022 planned to install batteries and solar panels in nearly 50,000 South Australian homes. Increasing deployment of VPP in residential sector is expected to provide stimuli to the growth of residential VPP market.

Geographically, the global virtual power plant market has been segmented into North America, Europe, Asia Pacific and Rest of World (ROW). North America leads the global virtual power plant market by capturing largest market share in terms of revenue of 36.97% in 2021. North America virtual power plant market is primarily driven by high adoption of renewable sources of energy coupled with increasing installation of virtual power plants in North America. Substantial adoption of virtual power plants for optimizing the energy distribution while minimizing the wastage of energy also act as driver for the virtual power plant market in North America. Moreover, Asia Pacific is anticipated to be the fastest growing region with a CAGR of 30.4% during forecast period. The Asia pacific virtual power plant market is primarily driven by high investment in the renewable energy coupled with increasing adoption of virtual power plants in Asia pacific.  As per the United Nations Environment Program (UNEP) countries Australia and Japan are investing over sustainable energy technologies until 2022. Further, increasing deployment of VPP also act as the driver for the growth of VPP market in Asia pacific.

Partnership and collaboration is the primary strategy adopted by companies in global virtual power plant market. Strategic partnership allows the companies to leverage on technology and marketing capabilities. Product launch is the secondary strategy adopted bykey companies in global virtual power plant market. New and advanced products help to improve company’s market visibility while competing effectively with key competitors in the market.The intensity of competitive rivalry in global virtual power plant market is expected to remain high over the forecast period 2022-2030. The global virtual power plant market is highly competitive with the presence of major players, such as such ABB Ltd. (Switzerland), Siemens AG (Germany), AutoGrid Systems Inc. (U.S.), Enbala Power Networks (Canada) and Viridity Energy Solutions Inc. (Ormat Technologies) (Philadelphia) hold more than XX% market share. The major companies are performing intensive research in improving the quality of virtual power plant solutions and developing new products and solutions. Companies are trying to compete with each other by providing the same characteristics and similar price at competitive prices for products in virtual power plant market.

KEY MARKET MOVEMENTS

  • Global virtual power plant market is estimated to growat a CAGR of 28.6 % during forecast period (2022-2030).
  • Demand response leads the technology segment in global Virtual power plant market by capturing largest market share of over 44% in 2021.
  • Demand response market is anticipated to rise at a highest CAGR of 28.5% during forecast period of 2022-2030.
  • Commercial and industrial sector leads the end-user segment of the global Virtual power plant market by capturing largest market share of over 72% in 2021.
  • Commercial and Industrial market is anticipated to rise at a highest CAGR of 28.1% during the forecast period.
  • Residential segment in the end-user segment of virtual power plant market is expected to rise at a highest CAGR of 29.8% in the forecast period.
  • North America leads the global virtual power plant market by capturing largest market share in terms of revenue of 36.97% in 2021.
  • Asia Pacific is anticipated to be the fastest growing region with a CAGR of 30.4% during forecast period.
  • The intensity of competitive rivalry in global virtual power plant market is expected to remain high over the forecast period 2022-2030.
  • The global virtual power plant market is highly competitive with the presence of major players, such as such ABB Ltd. (Switzerland), Siemens AG (Germany), AutoGrid Systems Inc. (U.S.), Enbala Power Networks (Canada) and Viridity Energy Solutions Inc. (Ormat Technologies) (Philadelphia) hold more than XX% market share.

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