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The electricity trading market size is forecast to increase by USD 111.34 billion and is estimated to grow at a CAGR of 6.56% between 2023 and 2027. The report includes historic market data from 2017 - 2021. The market's growth hinges on multiple factors, including heightened vendor collaborations, a surge in cross-border trading, and the expanding adoption of energy storage systems. These dynamics reflect a shift towards more interconnected and efficient energy networks. Vendor collaborations enable the pooling of resources and expertise, fostering innovation and enhancing market offerings. Cross-border trading signifies a broader and more fluid energy market, promoting stability and resource optimization across regions. Concurrently, the adoption of energy storage systems addresses key challenges like intermittency, enabling better integration of renewable sources and bolstering grid resilience. Together, these trends shape a dynamic landscape, driving advancements and opportunities in the semiconductor memory market.
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The rise in the entry of new players is a key trend in the market. A power exchange offers a platform for traders, buyers, and sellers to enter into spot contracts that are for the same day (intraday), the next day, and on a weekly basis. It's similar to commodity exchanges and has a payment protection mechanism in place for sellers and buyers.
Globally, many large companies are entering the sector. An increase in new entrants into the electricity industry for business expansion and the resultant competitive pricing of electric power will propel the growth of the global market during the forecast period.
In the realm of electricity trading, a diverse array of factors interplay to shape the market landscape. Equities, bonds, and commodities serve as foundational elements influencing market dynamics and investment strategies. Market design plays a crucial role in structuring transactions and ensuring fair practices. Consumers and system operators are pivotal actors, orchestrating the flow of electricity from power stations to end-users. Detailed generation data and insights from news reports inform decision-making processes across the industry. Ancillary services and frequency management are essential for grid stability and reliability. The market thrives on short-term trading and power purchase agreements, fostering power generation and distribution activities. Policy frameworks like the European Green Paper and Lisbon Strategy shape the regulatory landscape, guiding wholesale energy markets and traditional financial markets.
The day-ahead trading segment is estimated to witness significant growth during the forecast period. Day-ahead trading refers to the trading of electric power for the following day, which takes place in exchanges such as the Exchange in Paris, Energy Exchange Austria (EXAA) in Vienna, or in OTC Trading via contracts negotiated bilaterally. The auction market is a less frequent term of reference for the day-ahead trade.
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Day-ahead trading is voluntary, financially binding forward electricity trading, wherein sellers and buyers trade for a required volume of electric power for the next day. The characteristics of both physical and financial markets are used as a basis for day-ahead trading.
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APAC is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
Another region offering significant growth opportunities to companies is Europe, Europe is among the top three largest markets for electric power trading across the globe. The increase in trade volume, owing to a rise in electricity demand and a surge in the adoption of renewable energy, will boost the sector in Europe. Several associations for power trading are present in Europe that ensure the competitive pricing of electricity. The EU has been at the forefront of the deployment of global renewable energy. The supportive policy measures for clean energy sources and the adoption of long-term renewable targets will result in strong growth of the regional market during the forecast period.
In the dynamic landscape of electricity trading, several key drivers propel the market forward. The emergence of wholesale energy markets and integration with traditional financial markets enhance liquidity and investment opportunities. Real-time data analytics and evolving market design strategies optimize trading efficiency. Trends reflect a shift towards more diverse participants and increased reliance on short-term contracts and power purchase agreements. The energy industry continues to innovate, leveraging generation data and insights from news reports to inform strategic decisions.
The rise in companies' collaborations is driving growth in the market. Increasing trade volumes for power exchanges, together with an increasing number of collaborations between suppliers in the electricity sector, will drive the global market during the forecast period. Several power exchange companies across the world are collaborating to explore opportunities in the electricity market.
However, increasing trade volumes, owing to high electricity demand, will stimulate the electricity sector. Europex is a non-profit association comprising European energy exchanges. The exchange and commodity market in electricity will, therefore, benefit from increasing trade volumes, along with favorable initiatives, which will propel the growth of the market during the forecast period.
The self-generation of electricity and growth in the adoption of microgrids is a major challenge in an market. The alternatives to electricity trading include microgrids and the generation of power themselves, which have also been increasingly adopted. Several businesses and homes are installing methods to generate their electricity through solar panels and small wind turbines, thus reducing their dependence on electricity companies.
As they provide electricity to remote and rural areas, microgrids have gained importance. The self-generation of electricity is also gaining popularity among customers owing to clean energy and supportive government policies. This will negatively affect the growth of the global market during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Deutsche Borse AG- The company offers Electricity trading services under the subsidiary European Energy Exchange AG.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative market growth analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments.
The market operates within a complex ecosystem of interconnected factors. It bridges traditional financial markets with the dynamic energy sector, facilitating the exchange of electricity among various participants. This market involves wholesale energy markets where utilities companies, energy providers, professional traders, and institutional traders engage in transactions.
Moreover, key players in this market include Independent System Operators (ISO) such as the New York ISO (NYISO) and Midcontinent ISO (MISO). These entities oversee grid operations, ensuring grid reliability and balancing of supply and demand. Electricity is traded in day-ahead markets and real-time markets, with prices determined by factors like spot prices, hedge, and price volatility. The market's dynamics are akin to a highway system analogy, where generators are the vehicles and the electricity pylons and transmission grid are the highways. ISOs and market operators act as traffic controllers, managing locational marginal pricing and clearing price to address congestion and optimize grid location usage.
Furthermore, renewable energy sources like wind power and solar power play a significant role, supported by net metering, tax incentives, and Renewable Energy Certificates. As the market evolves, the focus shifts towards sustainable homes, energy-efficient homes, and consumer protection. Derivatives products such as energy futures and energy forwards provide risk management tools, while crypto-asset exchanges offer alternative trading avenues. Overall, the market is a vital component of the energy industry, driven by technological advancements, regulatory frameworks, and market participants' strategies.
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Market Scope |
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Report Coverage |
Details |
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Page number |
165 |
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Base year |
2022 |
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Historic period |
2017 - 2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.56% |
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Market growth 2023-2027 |
USD 111.34 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
5.92 |
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Regional analysis |
Europe, APAC, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 39% |
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Key countries |
US, China, Japan, Germany, and UK |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
BP Plc, Deutsche Borse AG, Equinor ASA, Euronext N.V., Fortum Oyj, Intercontinental Exchange Inc., Japan Electric Power Exchange, NTPC Ltd., Power Exchange India Ltd., Tata Power Co. Ltd., Vattenfall AB, Axpo Holding AG, Energy Trading Co. Sro, Indian Energy Exchange Ltd., JSW STEEL Ltd., Manikaran Power Ltd., Next Kraftwerke GmbH, PTC India Ltd., Statkraft AS, and VECO Power Trading LLC |
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Market dynamics |
Parent market analysis, market research and growth, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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