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The Virtual Power Plant (VPP) Market size is forecast to increase by USD 11.13 billion and is estimated to grow at a CAGR of 25.66% between 2023 and 2028. The report includes historic market data from 2018 - 2022. The market is witnessing a growing demand for the growing adoption of artificial intelligence (AI), machine learning, and advanced data analytics, the rise in the integration of EVs as flexible assets, and the increasing expansion and launch of virtual power plants globally.
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Growing adoption of artificial intelligence (AI), machine learning, and advanced data analytics is the primary trend shaping market growth. Align with market trends and analysis, AI and machine learning algorithms are being deployed to optimize the operation of plants by predicting energy demand, dynamically adjusting power generation sources, and improving overall system efficiency. Advanced data analytics play a crucial role in processing the vast amount of information generated by these plants.
Additionally, as the global energy landscape evolves, the incorporation of these technologies is anticipated to further accelerate, providing sustainable, cost-effective, and resilient energy solutions through the widespread adoption of virtual power plants. Hence, the increasing use of AI, machine learning, and advanced data analytics will drive market growth during the forecast period.
The mixed asset segment is estimated to witness significant growth during the forecast period. The mixed asset segment in the global market comprises a combination of diverse energy resources and technologies to form a versatile and adaptable power generation portfolio. In addition, mixed assets combine distributed generation such as solar panels and wind turbines, with demand response resources such as smart appliances and controllable loads, and a single virtual power plant platform.
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Moreover, the mixed asset approach allows for greater flexibility and optimization in energy generation. In addition, by combining different types of assets such as solar, wind, battery storage, and conventional sources, operators can better balance energy supply with demand fluctuations. Furthermore, this versatility is crucial for managing the intermittent nature of renewable sources and ensuring a reliable power supply. In addition, by integrating diverse resources, virtual power plants can optimize the utilization of both renewable and traditional energy sources. Hence, such factors are fuelling the growth of this segment which in turn drives the market growth during the forecast period.
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Europe is estimated to contribute 55% 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. The rising demand for cleaner and more sustainable solutions has led to a rising interest in virtual power plants across European countries. In addition, governments, particularly in Germany and the UK, have been proactive in supporting the growth of virtual power plant market through various initiatives. Moreover, in Germany, the Energiewende initiative aims to transition towards a more sustainable system. In addition, this includes integrating a higher share of renewable sources into the grid, which aligns with the capabilities of virtual power plants. For instance, Germany Energiewende (energy transition policy) aims to adopt renewable sources and ensure sustainable development, which aligns with the capabilities of virtual power plants. Hence, such factors are driving the market growth in Europe during the forecast period.
The rising integration of renewable energy sources with electric power systems is the key factor driving market growth. Virtual power plants play a pivotal role in overcoming the intermittent variability of renewable sources, such as solar and wind power, by aggregating and orchestrating these distributed resources. Plants facilitate the seamless integration of renewables into the grid by efficiently managing their generation patterns. They leverage advanced technologies and predictive analytics to forecast renewable energy availability and match it with demand fluctuations.
Additionally, renewable integration via plants not only supports grid stability but also contributes to the global transition towards cleaner and more sustainable systems, reducing reliance on fossil fuels and mitigating environmental impacts. As renewable energy penetration increases, virtual power plants will continue to play a vital role in optimizing their utilization and ensuring grid reliability. Thus, an increase in the integration of renewable sources boosts market growth during the forecast period.
Lack of expertise and inadequate infrastructure of virtual power plants is a challenge that affects market growth. The complexity of technologies requires specialized knowledge spanning various disciplines, including management, data analytics, software development, and grid integration. A shortage of skilled professionals proficient in these areas hampers the design, implementation, and operation of effective plant systems. In addition, existing infrastructure limitations pose challenges. Many regions lack the necessary grid infrastructure capable of accommodating the seamless integration of a multitude of distributed resources (DERs) within plants.
Moreover, upgrading infrastructure to support bidirectional flow, data communication, and real-time control necessitates significant investments and time. Furthermore, strategic investments in upgrading grid infrastructure, incorporating advanced communication systems, and standardizing protocols are essential for the successful deployment and scalability of virtual power plants globally. Thus, a lack of expertise and inadequate infrastructure may impede market growth 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.
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.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative 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 report forecasts market growth and forecasting by revenue at global, regional & country levels and provides an analysis of the latest market growth and trends opportunities from 2018 to 2028.
The market is surging with the integration of renewable energy resources, emphasizing solar power and rooftop solar installations. Leveraging small wind turbines, VPPs contribute significantly to augmenting energy generation capacity. The adoption of Internet of Things (IoT), machine learning technologies, and AI algorithms plays a pivotal role in the VPP landscape, particularly in the mixed asset segment. VPPs actively engage in frequency regulation, voltage support, and peak shaving, catering to both industrial and residential segments. In the residential sector, VPPs offer home energy storage solutions, promoting energy self-sufficiency and reducing electricity bills. The global Virtual Power Plant market is witnessing substantial growth, underscoring the pivotal role it plays in the contemporary energy landscape.
Market Scope |
|
Report Coverage |
Details |
Page number |
185 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 25.66% |
Market Growth 2024-2028 |
USD 11.13 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
25.46 |
Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
Performing market contribution |
Europe at 55% |
Key countries |
US, Australia, Germany, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., AGL Energy Ltd., Duke Energy Corp., Electricite de France SA, Enel Spa, ENGIE SA, Generac Holdings Inc., Hitachi Ltd., Honeywell International Inc., Kyocera Corp., Mitsubishi Electric Corp., Next Kraftwerke GmbH, OhmConnect Inc., Robert Bosch GmbH, RWE AG, Schneider Electric SE, Siemens AG, SolarHub, sonnen GmbH, Sunrun Inc., Sunverge Energy Inc., and Tesla Inc. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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 Technology
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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