The Global Power Grid Market Projected to Grow at a CAGR of 5.6% and Generate a Revenue of $413.9 Billion by 2032

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The global power grid market is predicted to be valued at $413.9 billion by 2032, surging from $241.6 billion in 2022, at a noteworthy CAGR of 5.6%.

Impact Analysis of COVID-19 on the Power Grid Market

The COVID-19 pandemic led to a significant impact on energy generation and demand. This was majorly owing to reduced industrial and commercial activities owing to lockdown restrictions that were imposed across several countries. Thus, owing to the industrial shutdowns and reduced commercial activities, the demand for electricity generated via power grid was reduced, while residential electricity use increased as more people stayed home. In addition, fossil fuel-based energy generation experienced significant challenges due to lower demand and fluctuations in fuel prices. For instance, lower power utilization rates were encountered by the coal and gas-fired power plants that had negatively impacted their economic viability. These factors have led to negative impact on the power grid market growth during the pandemic.

Global Power Grid Market Analysis

The growing popularity of cleaner and sustainable energy sources that helps in reducing the dependence on fossil fuels and lowers the emission of greenhouse gases is driving the power grid market growth. For instance, the renewable energy generated via power grid has paved the way for renewable & sustainable energy sources. In addition, rising investments in the renewable energy sector reduces the dependence on import of fossil fuels. Also, distributed renewable energy sources, such as rooftop solar panels greatly contribute to the resilience of the power grid by reducing the dependence on centralized power plants. With this decentralization, the grid stability is enhanced, and power outages are reduced.

Aging infrastructure and limited storage capacity are anticipated to restrain the power grid market share in the upcoming years. This is because the majority of the power grids across the world have aging infrastructure, that is likely to add up to maintenance cost and power failures. In addition, upgradation and modification of power grid infrastructure is costly & time-consuming. Also, the traditional power grids have limited storage capacity owing to which significant challenges are encountered when it comes to energy storage. Thus, the integration of efficient energy storage solutions is necessary to ensure grid stability & flexibility which requires huge investments.

The electrification of the transportation sector and growing adoption of electric vehicles (EVs) across the world has led to a rise in demand for efficient power grid solutions. For instance, the charging stations required for electric vehicles have led to an increase in demand for power grids to ensure continuous power supply. Also, it is estimated that the rising adoption of EVs will contribute to a substantial share of electricity consumption globally. For instance, in 2023, electric vehicle sales accounted for 18% of global vehicle sales and it is estimated that by 2030, the electric vehicle sales will make up to 40% of the global car sales. In addition, rapid increase in the adoption of EVs requires upgrades to the existing power grid infrastructure. Thus, investments in grid modernization, the launch of smart grid technologies, and enhancing the grid capacity are predicted to generate significant opportunities in the power grid industry in the upcoming years.

Global Power Grid Market, Segmentation

The power grid market is segmented on the basis of component, energy source, and region.

Component:

The component segment is classified into power generation, transmission lines, distribution networks, and consumer use. Among these, the power generation sub-segment is anticipated to be the fastest growing during the forecast period. Power generation is a necessary step in the power grid as it helps in generating electrical energy from varied energy sources such as wind, solar, coal, fossil fuel, hydropower, and others. Thus, the power generation serves as the starting point in the energy supply chain and is essential for addressing the energy demand of residential, commercial, and industrial sectors.

For instance, industries and commercial enterprises heavily depend on a stable and reliable power supply for their operations. This is because the power grid provides the energy necessary for manufacturing processes as well as for the machineries, lighting, and other essential processes in the industrial and commercial sectors. Also, the residential sector requires electricity for lighting, heating, cooling, cooking, and other household activities. In these cases, reliable power generation ensures that homes have a continuous and reliable source of electricity. These factors are anticipated to boost the popularity of power generation sub-segment in the upcoming years.

Energy Source:

The energy source segment is further classified into solar, wind, natural gas, coal, and others. Among these, the wind sub-segment is projected to witness the highest CAGR during the forecast years. The popularity of wind energy as an energy source is majorly owing to the power of the wind in electricity generation as it is the sustainable and environmentally friendly way to produce power without relying on finite fossil fuel resources. In addition, wind power generation produces minimal greenhouse gas emissions compared to traditional fossil fuel-based power generation. Thus, by reducing reliance on fossil fuels, wind energy contributes to mitigating climate change and lowering overall carbon emissions.

Furthermore, advancements in wind turbine technology, increased manufacturing scale, and improved efficiency have led to a significant reduction in the cost of wind energy. For instance, in India, the wind energy sector will have large capacity additions as a part of the 500 GW renewable energy capacity target by 2030. In addition, in the U.S., the wind turbines present across the 50 states of the U.S., generated more than 10% of the country’s energy demand in 2022. These factors are anticipated to boost the popularity of wind as an energy source during the forecast period.

Region:

The power grid market in Asia-Pacific is projected to show the fastest growth during the forecast period. The growing demand for reliable energy sources owing to globalization, industrialization, and rising energy demand from residential sectors are major factors driving the Asia-Pacific power grid market growth. Two largest markets for power grid and electricity generation in the region are China and India. Also, India will play a pivotal role in the energy transition with growing investments in the energy sector.

In addition, it is estimated that by 2030, over half of the world’s electricity generation is projected to come from Asia-Pacific. China has planned 1,200 GW of wind and solar capacity installation goal by 2030, which will require the installation of over 534 GW of renewables over the next decade.

Key Players in the Global Power Grid Market

Some of the leading power grid market players are Siemens AG, ABB Ltd, General Electric Company, Schneider Electric SE, State Grid Corporation of China, Eaton Corporation, Mitsubishi Electric Corporation, Toshiba Corporation, National Grid plc, and NextEra Energy, Inc.