Power Grid Market Expected to Reach $413.9 Billion by 2032—Allied Market Research

According to a new report published by Allied Market Research, titled, “Power Grid Market," The power grid market size was valued at $241.60 billion in 2022, and is estimated to reach $413.9 billion by 2032, growing at a CAGR of 5.6% from 2023 to 2032. The power grid comprises of a vast network of power generation, transmission, and distribution systems. Originating from modest local designs, power grid has evolved into a complex web of high and low voltage infrastructure, comprising wires, transformers, switches, and various electrical components. This intricate network is crucial in delivering electricity from generators to a diverse range of consumers, from industrial facilities and commercial establishments to residential homes. Maintaining a delicate balance is imperative for the grid's optimal function. Any deviation can result in fluctuations in the grid frequency which is a critical parameter typically set at 50 or 60 Hz. Any deviation from this nominal frequency could lead to potential damage to equipment connected to the grid.

The growing demand for clean energy technologies is expected to positively drive the power grid market statistics in the upcoming years. Rising investments in clean energy technologies, reaching an impressive $1.1 trillion in 2022, is anticipated to boost the power grid market growth during the forecast period. Investments in clean energy alternatives have increased by 31% in 2022 compared to 2021. This growth is majorly owing to rising demand for cleaner alternatives in both power generation and transportation. Also, the share of electricity generated via fossil fuels is estimated to decrease to 2% by 2050 from present share of 59% in 2021. In addition, by 2050, the combined energy output of wind and solar is projected to surpass the total electricity generated from all sources in 2021. In addition, modern societies are heavily reliant on electricity for various critical functions. An efficient power grid ensures higher reliability, reducing the frequency and duration of power outages. This reliability is crucial for businesses, healthcare, and emergency services. Thus, a rise in energy consumption is estimated to boost the demand for sustainable and clean energy solutions which is driving the power grid market share.

Electricity transmission losses within the power grid resulting in frequent power outages are estimated to restrain the market growth in the future. This is because the electricity distribution over long distances increases the temperature within power lines which results in energy losses in the form of heat. Also, the amount of energy lost during electricity transmission, varies from country to country. Electricity transmission losses in the power grid can lead to power outages, leading to huge blackouts, and damage to electronic devices. These factors are estimated to restrict the power grid market opportunities in the upcoming years.

Advancements in the power grid with the launch of scalable energy storage technologies, microgrids, cybersecurity solutions, and others is anticipated to generate excellent opportunities in the upcoming years. For instance, scalable energy storage solutions refer to the use of advanced battery technologies such as pumped hydro storage that helps in reducing the negative environmental impact. In addition, increased deployment of distributed energy sources such as wind turbines, solar panels, and others is expected to drive the market expansion. The growing reliance on microgrid technologies that is capable of operating autonomously or in conjunction with the main grid is becoming quite popular. In addition, electrification of the transportation sector is gaining momentum with an increase in sales of electric vehicles representing 18% of global vehicle sales in 2023. These factors are anticipated to have a positive impact on the power grid market forecast in the coming years.

The power grid market analysis is segmented on the basis of component, energy source, and region. By component, it is classified into power generation, transmission lines, distribution networks, and consumer use. By energy source, it is classified into solar, wind, natural gas, coal, and others. By region, the market is analyzed across North America, Europe, Asia-Pacific, and Latin America.

The key players profiled in the power grid market report include 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.

The report offers a comprehensive analysis of the global power grid market trends by thoroughly studying different aspects of the market including major segments, market statistics, market dynamics, regional market outlook, investment opportunities, and top players working towards the growth of the market. The report also highlights the present scenario and upcoming trends & developments that are contributing toward the growth of the market. Moreover, restraints and challenges that hold power to obstruct the market growth are also profiled in the report along with the Porter’s five forces analysis of the market to elucidate factors such as competitive landscape, bargaining power of buyers and suppliers, threats of new players, and emergence of substitutes in the market.

Impact of COVID-19 on the Global Power Grid Industry

• The pandemic led to disruptions in global electricity demand and consumption patterns owing to reduced energy demand from commercial and industrial sectors. This caused disruptions for the power grid operators as they have to adapt to the varying power demand.
• Also, supply chain disruptions experienced by the power grid manufacturers led to delay in manufacturing and delivery of components such as transformers, distributors, and control systems.
• The industrial and commercial sectors where the power demand is high faced delays due to restrictions on movement, labor shortages, and other logistical challenges. This led to setbacks in the deployment of new grid infrastructure.

Key Findings of the Study

• Based on component, the power generation sub-segment emerged as the global leader in 2022 and is predicted to show the fastest growth in the upcoming years.
• Based on energy source, the natural gas sub-segment emerged as the global leader in 2022 and the wind sub-segment is predicted to show the fastest growth in the upcoming years.
• Based on region, Asia-Pacific registered the highest market share in 2022 and Europe is projected to be the fastest growing during the forecast period.