Global Virtual Power Plant

Global Virtual Power Plant Market Research Report: Forecast (2022-2027)

By Source (Distributed Energy Generation System, Energy Storage Systems), By Technology (Demand Response, Distributed Generation, Mixed Asset), By End-User (Residential, Industrial, Commercial), By Re Read more

  • Energy
  • Mar 2022
  • 178
  • EN33008

Market Definition

A Virtual Power Plant is a cloud-based network of decentralized power generation units like solar plants, wind farms, storage systems, among others, used for releasing the lad from the grid by swiftly dispensing off the power generated by the units during peak load. These power production units are governed in their process & possession through the virtual power plant.

Besides, the virtual power plant sells off the combined energy generation & consumption of different units across the energy interchange platforms. It also intends to integrate large non-conventional energy units at one existing central energy system, which has created fresh growth opportunities within the virtual power plant industry.

Market Insights

The Global Virtual Power Plant Market is projected to grow at a CAGR of around 27% during the forecast period, i.e., 2022-27. The market is driven primarily by the mounting demand for power generation from renewable energy sources, coupled with an essential concern for decentralized power generators in the electricity distribution supply chain to balance energy production & consumption levels.

Report Coverage Details
Study Period Historical Data: 2017-20
Base Year: 2021
Forecast Period: 2022-27
CAGR (2022-2027) 27%
Regions Covered North America: USA, Canada, Mexico
Europe: Germany, UK, France, Italy, Denmark
Asia-Pacific: China, Japan, South Korea, Australia
South America: Brazil, Argentina
Middle East & Africa: UAE, Saudi Arabia, South Africa
Key Companies Profiled Autogrid Systems, Advanced Microgrid Solutions, Inc., CISCO Systems Inc., Enbala Power Networks Inc., Enel X North America Inc., General Electric, Itron Inc., Hitachi Ltd, Mitsubishi Electric Corporation, Next Kraftwerke, Siemens AG, Schneider Electric, Tesla Inc.
Unit Denominations USD Million/Billion

 

Virtual Power Plants integrate technologies like demand response, distributed generation, and mixed assets, offering opportunities to reduce the overall cost of energy. Besides, several public & private partnerships across the world promoting the adoption of Virtual Power Plants are further driving the market. For instance:

  • In February 2017, market leader ABB Ltd. enforced a flywheel energy storage system for stabilizing voltage fluctuations within the grid and bringing efficiency in energy consumption.
  • In the same year, Sweden also introduced a smart grid program, intending to reduce the energy prices during peak hours, where numerous consumers participated

Key Trends in the Market

In July 2021, Tesla announced a plan to use its Powerwall integrated battery system across California as part of a Virtual Power Plant to back the electric grid at times of high temperatures. Besides, the leader is experienced in networking with Virtual Power plants and has deployed around 10% of these units across South Australian plants. This plant has played a crucial role in supporting broader power grids during critical events.

Moreover, the Tesla Powerwall battery system is likely to join the movement to build Virtual Power plants across California with distributed generation technology for residential energy storage and stabilizing the power grids.

Impact of Covid-19 on the Global Virtual Power Plant Market

The Covid-19 pandemic in 2020 catastrophically affected most industries worldwide. However, the Global Virtual Power Plant Market did not observe any direct impact. Due to the severe economic downfalls across different countries, investments in the Virtual Power Plant industry underwent a temporary halt. Several countries across Europe had lowered funding in the IT infrastructure, which consequently brought a pause in technological innovations in the market. 

Since most countries imposed stringent movement restrictions & lockdowns to curb the virus spread, investments in multiple grid projects also witnessed an unprecedented decline. On the bright side, some countries also took initiatives in reducing the burden of energy generation. For instance:

  • A Metropolitan Electricity Authority & Provincial Electricity Authority of Thailand enabled a 3% reduction on all tariff bills, refunded meter deposits for residential sectors, increased grace periods for bill payments, and provided other benefits.  

Furthermore, with the gradual improvement in the pandemic situation, the governments of different countries are swiftly increasing investments in multiple verticals to enhance their national economy, stressing more on national budgets, and reconsidering transitions on renewable energy resources, among others. Hence, the Global Virtual Power Plant Market would gain significant momentum owing to the massive funding in developing energy infrastructure across developing nations in the years to come.

Global Virtual Power Plant Market Research Report: Forecast (2022-2027)

Market Segmentation

Based on the Technology, the Global Virtual Power Plant Market segments into:

  • Demand Response
  • Distributed Generation
  • Mixed Asset

Of them all, the Demand Response technology is anticipated to dominate the market with the largest share during the forecast period. The increasing demand for this technology is mainly due to its ability to enhance the overall energy efficiency of the grid, along with its long-term benefits like peak load management for end-users, which is why there are increasing investments in these solutions. Through these tools & strategies, utility end-users balance out the high & low energy consumption levels.

On the other hand, the Distributed Generation is projected to acquire a considerable share in the market. It owes to the rapidly increasing concerns over pollution & carbon emissions, i.e., propelling the demand for alternatives like renewable power generation resources to address the environmental issues and fulfill the energy requirements across different verticals. With better integration of distributed power generation resources through Virtual Power Plants, grid operations would experience operational optimization. It shall further soar the demand for distributed generation technology and drive the overall market during the forecast period.

Based on the End-User:

  • Residential
  • Industrial
  • Commercial

Of them all, the Residential sector is dominating the market with the largest share, principally due to the extensive demand for renewable energy in different home applications. Besides, with the rising prevalence of smart meters to monitor the energy consumption levels accurately, coupled with the increasing adoption of smart home appliances, and the utilization of several Home Energy Management Services, the demand for virtual power plants is significantly soaring across the residential sector.

Hence, with a greater focus on developing smart cities, several homeowners are investing in solar power generation & storage to exercise various benefits like cost efficiency, consistent power flow, etc., and strongly contributing toward reducing carbon emissions. Virtual Power Plants enable homeowners to bring more resilience to the power grid by offering new & dispatchable utility resources.

On the other hand, the Industrial & Commercial sector is anticipated to demonstrate significant market growth during the forecast period. It owes to the mounting inclination of this sector toward Virtual Power Plants to acquire benefits like lower emissions, efficiency in energy consumption, and lower costs of power. Besides, stringent government regulations associated with Green House Gas (GHG) emissions are driving the use of renewable energy resources and, as a result, promoting the virtual power plant market growth across Industrial & Commercial sectors.

Regional Landscape

Geographically, the Global Virtual Power Plant Market expands across:

  • North America
  • South America
  • Europe
  • Asia-Pacific
  • Middle East & Africa

Of them all, North America is anticipated to dominate the market with the largest share during the forecast period. It owes principally to the increasing number of sanctioned projects for the deployment of Virtual Power Plants in the US & Canada. The market growth across the US is expected to rise owing to the greater focus on adopting renewable energy & addressing several concerns associated with the depleting environment. For instance:

  • SimpliPhi deployed a Virtual Power Plant demonstration project in Louisiana in May 2020.

Besides, the region is witnessing an active deployment of Virtual Power Plants across the residential & industrial sectors. Moreover, the governments of different countries across North America are laying out favorable policies to encourage the leading market players toward adopting Virtual Power Plants, thereby fueling the regional market growth. 

On the other hand, Europe is projected to attain the second-largest market share during the forecast period. It owes primarily to the rapidly increasing investments by the leading players in the Virtual Power Plant industry and stringent regulations by several countries in Europe to curb the carbon emissions across the region. Besides, the extensive presence & participation of prominent market players are also contributing substantially to the market growth. 

Furthermore, across Asia-Pacific, the market is anticipated to observe rapid growth during 2022-27, mainly due to the rapidly expanding residential & commercial sectors entwined with the incredible potential for renewable resources, thereby soaring the demand for Virtual Power Plants across Asia-Pacific. 

Countries like China & India are among the prominent energy consumers in the region and, in turn, propelling the demand for renewable power sources. Moreover, the increasing deployment of smart metering systems, massive investments in energy generation & storage, mounting adoption of demand response technologies are other crucial factors surging the demand for Virtual Power Plants across Asia-Pacific. 

On the other hand, the Middle East & Africa is projected to witness steady market growth in the coming years. It owes primarily to substantial investments by the governments of various regional countries in several virtual power plant projects toward increasing the capabilities of renewable energy generators while reducing dependency on fossil fuels. For instance:

  • In April 2019, Dubai Electricity & Water Authority (DEWA) joined hands with a Canadian Smart Grid solution provider 'Enbala' and built the first Virtual Power Plant in the Middle East. This project is in line with the Dubai Clean Energy Strategy 2050 to surge the renewable energy integration capabilities and produce around 75% of Dubai's total energy from clean energy sources.

Recent Developments by the Leading Companies

  • In July 2021, Hawaiian Electric initiated a program allowing several residential & industrial customers to add energy storage to the solar arrays & get cash rebates. In return, customers had to opt for virtual power plant programs to use or transfer the energy from the storage during peak hours.
  • In April 2019, another leading player ABB, incorporated with Rolls-Royce to develop microgrid technology & advanced automation solutions for industrial & commercial sectors, thereby benefiting the global market.    

Market Dynamics:

Key Driver: Growing Inclination toward Distributed Power Generation

The surging demand for virtual power plants with distributed generation technology owing to its cost-effectiveness, coupled with favorable government regulations & policies toward encouraging the deployment of renewable technologies, are the prime aspects driving the global market through 2027.

Moreover, decentralized power generation helps provide electricity when there are power outages & high-energy requirements. Hence, several countries, which are ambitious to reach clean energy targets, are increasingly investing in & installing virtual power plants powered with this technology.

Moreover, the mounting focus of various countries on reducing carbon emissions & promoting electrification entwined with numerous advancements in power generation & storage technologies is also propelling the adoption of distributed generation.

Possible Restraint: Insufficient Infrastructure Available for Virtual Power Plants

Setting up a Virtual Power Plant requires advanced communication systems like the Energy Management System to enable efficient monitoring, controlling, & managing of different energy units. The sufficient unavailability of these systems can restrain the operational efficiency of power plants and, as a result, hamper the overall market growth during 2022-27.

Moreover, Virtual Power Plants function with advanced technologies like Artificial Intelligence (AI) & Machine Learning (ML) enabled tools for different business operations, including collecting & monitoring large data volumes, etc. Hence, there's a need for highly skilled professionals & investments to integrate these tools into Virtual Power Plants. However, the unavailability of these assets is another significant growth challenge for the global market.

Competitive Landscape

According to MarkNtel Advisors, the leading players in the global Virtual Power Plant market are ABB Ltd, AutoGrid Systems, Advanced Microgrid Solutions, Inc., CISCO Systems Inc., Enbala Power Networks Inc., Enel X North America Inc., General Electric, Itron Inc., Hitachi Ltd, Mitsubishi Electric Corporation, Next Kraftwerke, Siemens AG, Schneider Electric, and Tesla Inc.

Key Questions Answered in the Market Research Report:

  1. What are the overall market statistics or estimates (Market Overview, Market Size- by Value, Forecast Numbers, Market Segmentation, and Market Shares) of the Global Virtual Power Plant Market?
  2. What is the region-wise industry size, growth drivers, and challenges?
  3. What are the key innovations, opportunities, current & future trends, and regulations in the Global Virtual Power Plant Market?
  4. Who are the key competitors, their key strengths & weaknesses, and how they perform in the Global Virtual Power Plant Market based on a competitive benchmarking matrix?
  5. What are the key results derived from the market surveys conducted during the Global Virtual Power Plant Market study?   

Market Outlook, Segmentation and Statistics 

  • Impact of COVID-19 on Global Virtual Power Plant Market
  • Market Size & Analysis
    • By Revenue
  • Market Share & Analysis
    • By Source
      • Distributed Energy Generation System 
      • Energy Storage Systems
    • By Technology
      • Demand Response
      • Distributed Generation
      • Mixed Asset
    • By End Users
      • Residential
      • Industrial
      • Commercial
    • By Region
      • North America
      • South America
      • Europe
      • Middle East & Africa
      • Asia-Pacific
    • By Competitors
      • Competition Characteristics
      • Market Share & Analysis
      • Competitive Matrix
  • Global Virtual Power Plant Market Hotspots & Opportunities
  • Global Virtual Power Plant Market Regulations & Policy
  • Key Strategic Imperatives for Success and Growth
  • Global Competition Outlook
    • Competition Matrix
    • Company Profile

Frequently Asked Questions

A. The Global Virtual Power Plant Market is projected to grow at a CAGR of around 27% during 2022-27.

A. The booming demand for virtual power plants in the Residential sector is anticipated to emerge as an area of remunerative opportunities for the leading players in the Global Virtual Power Plant Market during 2022-27.

A. The Distributed Generation technology for renewable power generation is set to witness increasing deployment in the coming years, owing to its lower capital investment & energy security and the rising support from the governments worldwide through favorable policies & regulations. It, in turn, would help countries reach clean energy targets easily and provide the global virtual power plant market with lucrative growth opportunities during 2022-27.

A. With the swiftly increasing investments by the governments of different countries to revive the national economy, they are increasingly amplifying national budgets and reconsidering transitions on renewable energy resources. It, in turn, shall display an increasing inclination of virtual power plants and enable the market to regain its momentum during the forecast period.

  1. Introduction
    1. Product Definition
    2. Research Process
    3. Glossary
    4. Market Segmentation
  2. Executive Summary
  3. Expert Verbatim- Interview Excerpts of Industry Experts
  4. Impact of COVID-19 on Global Virtual Power Plant Market
  5. Global Virtual Power Plant Market Start-up Ecosystem and Investment Climate
    1. Leading Start-ups & Their Specialties
    2. Funding Under Multiple Rounds  
    3. Prominent Investors & Their Portfolio
  6. Global Virtual Power Plant Market- Business Cases/Use Cases
  7. Global Virtual Power Plant Market Outlook, 2017-2027F
    1. Market Size & Analysis
      1. By Revenue
    2. Market Share & Analysis
      1. By Source
        1. Distributed Energy Generation System
        2. Energy Storage Systems
      2. By Technology
        1. Demand Response
        2. Distributed Generation
        3. Mixed Asset
      3. By End Users
        1. Residential
        2. Industrial
        3. Commercial
      4. By Region
        1. North America
        2. South America
        3. Europe
        4. Asia-Pacific
        5. Middle East & Africa
      5. By Company
        1. Revenue Shares
        2. Strategic Factorial Indexing
        3. Competitor Placement in MarkNtel Quadrant
  8. North America Virtual Power Plant Market Outlook, 2017-2027F
    1. Market Size & Analysis
      1. By Revenue
    2. Market Share & Analysis
      1. By Source
      2. By Technology
      3. By End Users
      4. By Country
        1. US
        2. Canada
        3. Mexico
    3. US Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    4. Canada Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    5. Mexico Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
  9. South America Virtual Power Plant Market Outlook, 2017-2027F
    1. Market Size & Analysis
      1. By Revenue
    2. Market Share & Analysis
      1. By Source
      2. By Technology
      3. By End Users
      4. By Country
        1. Brazil
        2. Argentina
    3. Brazil Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    4. Argentina Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
  10. Europe Virtual Power Plant Market Outlook, 2017-2027F
    1. Market Size & Analysis
      1. By Revenue
    2. Market Share & Analysis
      1. By Source
      2. By Technology
      3. By End Users
      4. By Country
        1. The UK
        2. Germany
        3. France
        4. Italy
        5. Denmark
        6. Others
    3. UK Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    4. Germany Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    5. France Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    6. Italy Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    7. Denmark Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
  11. Asia-Pacific Virtual Power Plant Market Outlook, 2017-2027F
    1. Market Size & Analysis
      1. By Revenue
    2. Market Share & Analysis
      1. By Source
      2. By Technology
      3. By End Users
      4. By Country
        1. China
        2. Japan
        3. Australia
        4. South Korea
        5. Others
    3. China Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    4. Japan Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    5. Australia Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    6. South Korea Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
  12. Middle East & Africa Virtual Power Plant Market Outlook, 2017-2027F
    1. Market Size & Analysis
      1. By Revenue
    2. Market Share & Analysis
      1. By Source
      2. By Technology
      3. By End Users
      4. By Country
        1. UAE
        2. Saudi Arabia
        3. South Africa
    3. UAE Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    4. Saudi Arabia Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
    5. South Africa Virtual Power Plant Market Outlook, 2017-2027F
      1. Market Size & Analysis
        1. By Revenue
      2. Market Share & Analysis
        1. By Source
        2. By Technology
        3. By End Users
  13. Global Virtual Power Plant Market Dynamics
    1. Drivers
    2. Challenges
    3. Impact Analysis
  14. Global Virtual Power Plant Market Trends
  15. Global Virtual Power Plant Market Value Chain Analysis
  16. Global Virtual Power Plant Market Regulations, Product Standards
  17. Global Virtual Power Plant Market Hotspots & Opportunities
  18. Competition Outlook
    1. Competitor Wise Growth Strategies
      1. Product Portfolio
      2. Brand Specialization
      3. Target Markets
      4. Research & Development
      5. Strategic Alliances & Initiatives
    2. Company Profiles
      1. ABB Ltd
      2. AutoGrid Systems
      3. Advanced Microgrid Solutions, Inc.
      4. CISCO Systems Inc.
      5. Enbala Power Networks Inc.
      6. Enel X North America Inc.
      7. General Electric
      8. Itron Inc.
      9. Hitachi Ltd
      10. Mitsubishi Electric Corporation
      11. Next Kraftwerke
      12. Siemens AG
      13. Schneider Electric
      14. Tesla Inc.
  19. Disclaimer
Virtual Power Plant Segmentation Slide