Virtual Power Plant
Virtual Power Plant Market Forecasts to 2030 - Global Analysis By Component Type (Hardware, Software, Services and Other Component Types), Deployment Type, Source, Technology, Application, End User, and By Geography
According to Stratistics MRC, the Global Virtual Power Plant Market is accounted for $4.10 billion in 2023 and is expected to reach $14.71 billion by 2030 growing at a CAGR of 20.0% during the forecast period. A virtual power plant (VPP) is a cloud-based aggregation of decentralized power generation sources, such as solar panels, wind turbines, and battery storage systems, coordinated to function as a single integrated power plant. Through advanced software and control systems, a VPP optimizes the operation of distributed energy resources to provide grid stability, flexibility, and energy trading services. It allows for the efficient utilization of renewable energy sources, reduces reliance on traditional fossil fuel power plants, and supports the transition to a more sustainable and resilient energy system. VPPs play a crucial role in enabling the integration of renewable energy into the grid.
According to the International Energy Agency (IEA) report, the global demand for electricity climbed by 4%, or 900 TWh, in 2020, expanding almost twice as quickly as the demand for all other forms of energy.
Market Dynamics:
Driver:
Renewable energy integration
VPPs play a crucial role in this transition by enabling the seamless integration and optimization of distributed energy resources (DERs) into the grid. The transition towards a more sustainable and low-carbon energy system necessitates efficient management of intermittent renewable energy sources such as solar and wind power. Moreover, advanced software and control systems ensure efficient utilization of renewable energy, minimize curtailment, and enhance grid flexibility and resilience.
Restraint:
High initial costs
Implementing a VPP requires substantial upfront investments in hardware, software, and infrastructure. The high initial costs can deter potential investors and limit the adoption of VPPs, particularly for smaller organizations or those with limited financial resources, creating a barrier to entry. Furthermore, the complexity of VPP systems and the need for specialized technical expertise also contribute to the initial costs, which gradually impede this market size.
Opportunity:
Technological advancements
Cloud-based platforms and advanced software solutions enable seamless integration and aggregation of diverse DER portfolios, enhancing grid flexibility and resilience. Advances in digitalization, communication, and control technologies have revolutionized the way VPPs operate, allowing for real-time monitoring, control, and optimization of DERs. In addition, technological innovations in energy storage systems, such as lithium-ion batteries and flow batteries, have also played a crucial role in the growth of the VPP market.
Threat:
Lack of awareness and education
VPPs are a relatively new concept in the energy industry, and many potential stakeholders may have limited knowledge or understanding of their benefits and functionalities. Policymakers and regulators may have a limited understanding of the regulatory frameworks and market structures, resulting in a lack of supportive policies, regulations, and incentives. Moreover, this lack of awareness can lead to a reluctance to invest in or participate in VPP programs, hindering this market.
Covid-19 Impact
The COVID-19 pandemic has had several negative impacts on the virtual power plant (VPP) market, primarily due to disruptions in supply chains, project delays, and economic uncertainty. Travel restrictions, lockdown measures, and social distancing requirements have hindered site inspections, permitting processes, and construction activities. Furthermore, the pandemic has impacted energy markets, with reduced industrial activity and changes in consumer behavior leading to fluctuations in energy demand and pricing.
The software segment is expected to be the largest during the forecast period
The software segment is estimated to hold the largest share due to its pivotal role in orchestrating and optimizing the diverse array of distributed energy resources (DERs) that make up the VPP. These software platforms leverage advanced algorithms, artificial intelligence (AI), and machine learning (ML) techniques to forecast energy generation, consumption patterns, and market conditions. Moreover, these often feature user-friendly interfaces and dashboards that empower stakeholders, which are driving this segment’s expansion.
The cloud-based segment is expected to have the highest CAGR during the forecast period
The cloud-based segment is anticipated to have highest CAGR during the forecast period, due to the use of remote servers hosted on the internet to manage and coordinate distributed energy resources (DERs). Cloud-based platforms offer several advantages, including scalability, accessibility, and real-time data processing capabilities. Furthermore, these solutions centralize the control and management of DERs, allowing efficient aggregation, optimization, and dispatch of resources to meet grid demand, thereby boosting this segment’s growth.
Region with largest share:
Europe commanded the largest market share during the extrapolated period owing to the increasing deployment of renewable energy sources, advancements in digitalization technologies, and evolving energy market regulations. Countries such as Germany, the Netherlands, Denmark, and the United Kingdom are leveraging their mature renewable energy sectors and supportive regulatory frameworks. In addition, the region's ambitious renewable energy targets, along with the need to enhance grid flexibility and resilience, are driving demand for VPP solutions.
Region with highest CAGR:
North America is expected to witness highest CAGR over the projection period, owing to the region's diverse energy landscape, supportive regulatory environment, and market reforms. North America's VPP market is benefiting from advancements in data analytics and communication technologies, enabling real-time monitoring, control, and optimization. Furthermore, policy initiatives at the federal, state, and provincial levels are raising investments, incentivizing the adoption of clean energy technologies, and propelling the growth of this region.
Key players in the market
Some of the key players in the Virtual Power Plant Market include Next Kraftwerke, Siemens, Centrica, Tesla, Toshiba Energy Systems & Solutions, ABB, Sunverge Energy, Inc., Hitachi, Ltd., Limejump Limited, AutoGrid Systems, Inc., General Electric, Sonnen, Lumenaza GmbH, Schneider Electric and Shell.
Key Developments:
In March 2024, Hitachi Rail has announced the launch of Train Maintenance DX as a Service, the industry's first ""as a Service"" solution to improve the work environment and the quality of train maintenance for railway operators, using the digital expertise in train manufacturing.
In February 2024, Sysmex Corporation and Hitachi High-Tech Corporation, announce that both companies have agreed to collaborate in the development of genetic testing systems based on capillary electrophoresis sequencers.
In October 2023, SAP SE announced that Siemens Healthineers AG, a leading global medical technology company, has selected the RISE with SAP solution to support the company's digital transformation journey.
In September 2023, The International Atomic Energy Agency (IAEA) has joined forces with Siemens Healthineers to strengthen cancer diagnosis and treatment capacity in low- and middle-income countries, harnessing each other’s technical expertise in new ways to combat the rising global burden of this disease that kills millions of people every year.
Component Types Covered:
• Hardware
• Software
• Services
• Other Component Types
Deployment Types Covered:
• On-premises
• Cloud-based
Sources Covered:
• Storage
• Renewable Energy
• Cogeneration
• Other Sources
Technologies Covered:
• Energy Storage
• Demand Response
• Combined Heat & Power (CHP)
• Distributed Energy Generation
• Other Technologies
Applications Covered:
• Frequency Regulation
• Energy Trading
• Peak Load Management
• Grid Balancing
• Other Applications
End Users Covered:
• Commercial
• Industrial
• Utilities
• Residential
• Other End Users
Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan
o China
o India
o Australia
o New Zealand
o South Korea
o Rest of Asia Pacific
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa
What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2021, 2022, 2023, 2026, and 2030
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements
Free Customization Offerings:
All the customers of this report will be entitled to receive one of the following free customization options:
• Company Profiling
o Comprehensive profiling of additional market players (up to 3)
o SWOT Analysis of key players (up to 3)
• Regional Segmentation
o Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
o Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances
Table of Contents
1 Executive Summary
2 Preface
2.1 Abstract
2.2 Stake Holders
2.3 Research Scope
2.4 Research Methodology
2.4.1 Data Mining
2.4.2 Data Analysis
2.4.3 Data Validation
2.4.4 Research Approach
2.5 Research Sources
2.5.1 Primary Research Sources
2.5.2 Secondary Research Sources
2.5.3 Assumptions
3 Market Trend Analysis
3.1 Introduction
3.2 Drivers
3.3 Restraints
3.4 Opportunities
3.5 Threats
3.6 Technology Analysis
3.7 Application Analysis
3.8 End User Analysis
3.9 Emerging Markets
3.10 Impact of Covid-19
4 Porters Five Force Analysis
4.1 Bargaining power of suppliers
4.2 Bargaining power of buyers
4.3 Threat of substitutes
4.4 Threat of new entrants
4.5 Competitive rivalry
5 Global Virtual Power Plant Market, By Component Type
5.1 Introduction
5.2 Hardware
5.3 Software
5.4 Services
5.5 Other Component Types
6 Global Virtual Power Plant Market, By Deployment Type
6.1 Introduction
6.2 On-premises
6.3 Cloud-based
7 Global Virtual Power Plant Market, By Source
7.1 Introduction
7.2 Storage
7.3 Renewable Energy
7.4 Cogeneration
7.5 Other Sources
8 Global Virtual Power Plant Market, By Technology
8.1 Introduction
8.2 Energy Storage
8.3 Demand Response
8.4 Combined Heat & Power (CHP)
8.5 Distributed Energy Generation
8.6 Other Technologies
9 Global Virtual Power Plant Market, By Application
9.1 Introduction
9.2 Frequency Regulation
9.3 Energy Trading
9.4 Peak Load Management
9.5 Grid Balancing
9.6 Other Applications
10 Global Virtual Power Plant Market, By End User
10.1 Introduction
10.2 Commercial
10.3 Industrial
10.4 Utilities
10.5 Residential
10.6 Other End Users
11 Global Virtual Power Plant Market, By Geography
11.1 Introduction
11.2 North America
11.2.1 US
11.2.2 Canada
11.2.3 Mexico
11.3 Europe
11.3.1 Germany
11.3.2 UK
11.3.3 Italy
11.3.4 France
11.3.5 Spain
11.3.6 Rest of Europe
11.4 Asia Pacific
11.4.1 Japan
11.4.2 China
11.4.3 India
11.4.4 Australia
11.4.5 New Zealand
11.4.6 South Korea
11.4.7 Rest of Asia Pacific
11.5 South America
11.5.1 Argentina
11.5.2 Brazil
11.5.3 Chile
11.5.4 Rest of South America
11.6 Middle East & Africa
11.6.1 Saudi Arabia
11.6.2 UAE
11.6.3 Qatar
11.6.4 South Africa
11.6.5 Rest of Middle East & Africa
12 Key Developments
12.1 Agreements, Partnerships, Collaborations and Joint Ventures
12.2 Acquisitions & Mergers
12.3 New Product Launch
12.4 Expansions
12.5 Other Key Strategies
13 Company Profiling
13.1 Next Kraftwerke
13.2 Siemens
13.3 Centrica
13.4 Tesla
13.5 Toshiba Energy Systems & Solutions
13.6 ABB
13.7 Sunverge Energy, Inc.
13.8 Hitachi, Ltd.
13.9 Limejump Limited
13.10 AutoGrid Systems, Inc.
13.11 General Electric
13.12 Sonnen
13.13 Lumenaza GmbH
13.14 Schneider Electric
13.15 Shell
List of Tables
1 Global Virtual Power Plant Market Outlook, By Region (2021-2030) ($MN)
2 Global Virtual Power Plant Market Outlook, By Component Type (2021-2030) ($MN)
3 Global Virtual Power Plant Market Outlook, By Introduction (2021-2030) ($MN)
4 Global Virtual Power Plant Market Outlook, By Hardware (2021-2030) ($MN)
5 Global Virtual Power Plant Market Outlook, By Software (2021-2030) ($MN)
6 Global Virtual Power Plant Market Outlook, By Services (2021-2030) ($MN)
7 Global Virtual Power Plant Market Outlook, By Other Component Types (2021-2030) ($MN)
8 Global Virtual Power Plant Market Outlook, By Deployment Type (2021-2030) ($MN)
9 Global Virtual Power Plant Market Outlook, By On-premises (2021-2030) ($MN)
10 Global Virtual Power Plant Market Outlook, By Cloud-based (2021-2030) ($MN)
11 Global Virtual Power Plant Market Outlook, By Source (2021-2030) ($MN)
12 Global Virtual Power Plant Market Outlook, By Storage (2021-2030) ($MN)
13 Global Virtual Power Plant Market Outlook, By Renewable Energy (2021-2030) ($MN)
14 Global Virtual Power Plant Market Outlook, By Cogeneration (2021-2030) ($MN)
15 Global Virtual Power Plant Market Outlook, By Other Sources (2021-2030) ($MN)
16 Global Virtual Power Plant Market Outlook, By Technology (2021-2030) ($MN)
17 Global Virtual Power Plant Market Outlook, By Energy Storage (2021-2030) ($MN)
18 Global Virtual Power Plant Market Outlook, By Demand Response (2021-2030) ($MN)
19 Global Virtual Power Plant Market Outlook, By Combined Heat & Power (CHP) (2021-2030) ($MN)
20 Global Virtual Power Plant Market Outlook, By Distributed Energy Generation (2021-2030) ($MN)
21 Global Virtual Power Plant Market Outlook, By Other Technologies (2021-2030) ($MN)
22 Global Virtual Power Plant Market Outlook, By Application (2021-2030) ($MN)
23 Global Virtual Power Plant Market Outlook, By Frequency Regulation (2021-2030) ($MN)
24 Global Virtual Power Plant Market Outlook, By Energy Trading (2021-2030) ($MN)
25 Global Virtual Power Plant Market Outlook, By Peak Load Management (2021-2030) ($MN)
26 Global Virtual Power Plant Market Outlook, By Grid Balancing (2021-2030) ($MN)
27 Global Virtual Power Plant Market Outlook, By Other Applications (2021-2030) ($MN)
28 Global Virtual Power Plant Market Outlook, By End User (2021-2030) ($MN)
29 Global Virtual Power Plant Market Outlook, By Commercial (2021-2030) ($MN)
30 Global Virtual Power Plant Market Outlook, By Industrial (2021-2030) ($MN)
31 Global Virtual Power Plant Market Outlook, By Utilities (2021-2030) ($MN)
32 Global Virtual Power Plant Market Outlook, By Residential (2021-2030) ($MN)
33 Global Virtual Power Plant Market Outlook, By Other End Users (2021-2030) ($MN)
Note: Tables for North America, Europe, APAC, South America, and Middle East & Africa Regions are also represented in the same manner as above.
List of Figures
RESEARCH METHODOLOGY
We at ‘Stratistics’ opt for an extensive research approach which involves data mining, data validation, and data analysis. The various research sources include in-house repository, secondary research, competitor’s sources, social media research, client internal data, and primary research.
Our team of analysts prefers the most reliable and authenticated data sources in order to perform the comprehensive literature search. With access to most of the authenticated data bases our team highly considers the best mix of information through various sources to obtain extensive and accurate analysis.
Each report takes an average time of a month and a team of 4 industry analysts. The time may vary depending on the scope and data availability of the desired market report. The various parameters used in the market assessment are standardized in order to enhance the data accuracy.
Data Mining
The data is collected from several authenticated, reliable, paid and unpaid sources and is filtered depending on the scope & objective of the research. Our reports repository acts as an added advantage in this procedure. Data gathering from the raw material suppliers, distributors and the manufacturers is performed on a regular basis, this helps in the comprehensive understanding of the products value chain. Apart from the above mentioned sources the data is also collected from the industry consultants to ensure the objective of the study is in the right direction.
Market trends such as technological advancements, regulatory affairs, market dynamics (Drivers, Restraints, Opportunities and Challenges) are obtained from scientific journals, market related national & international associations and organizations.
Data Analysis
From the data that is collected depending on the scope & objective of the research the data is subjected for the analysis. The critical steps that we follow for the data analysis include:
- Product Lifecycle Analysis
- Competitor analysis
- Risk analysis
- Porters Analysis
- PESTEL Analysis
- SWOT Analysis
The data engineering is performed by the core industry experts considering both the Marketing Mix Modeling and the Demand Forecasting. The marketing mix modeling makes use of multiple-regression techniques to predict the optimal mix of marketing variables. Regression factor is based on a number of variables and how they relate to an outcome such as sales or profits.
Data Validation
The data validation is performed by the exhaustive primary research from the expert interviews. This includes telephonic interviews, focus groups, face to face interviews, and questionnaires to validate our research from all aspects. The industry experts we approach come from the leading firms, involved in the supply chain ranging from the suppliers, distributors to the manufacturers and consumers so as to ensure an unbiased analysis.
We are in touch with more than 15,000 industry experts with the right mix of consultants, CEO's, presidents, vice presidents, managers, experts from both supply side and demand side, executives and so on.
The data validation involves the primary research from the industry experts belonging to:
- Leading Companies
- Suppliers & Distributors
- Manufacturers
- Consumers
- Industry/Strategic Consultants
Apart from the data validation the primary research also helps in performing the fill gap research, i.e. providing solutions for the unmet needs of the research which helps in enhancing the reports quality.
For more details about research methodology, kindly write to us at info@strategymrc.com
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