International market research institutions: 2021-26 global distributed energy resource management system compound annual growth rate of 21%
According to a recent report released by Markets and Markets, an international market research organization, the global distributed energy resource management system market is estimated to reach US$286 million in 2021, and this figure is expected to increase to US$750 million by 2026, with a compound annual growth rate during the period. was 21.2%.
Innovative government support for residential buildings and increasing electricity consumption are driving the growth of the distributed energy resource management systems market.
The ongoing COVID-19 pandemic has impacted the global power industry. Distributed energy management system solutions were further negatively impacted in the short term due to the reduction in business activities.
The increasing demand for energy production using renewable energy coupled with various government-backed renewable energy policies will boost this market over the forecast period. In 2020, annual renewables added nearly 280 GW of new capacity, the highest year-over-year increase since 1999. Despite the strong impact of the pandemic on global supply chains, new renewable energy capacity additions in 2020 increased by more than 45% compared to 2019, which is expected to drive the demand for distributed energy resource management systems market.
At the same time, increasing investments in the digitization of power grids through the implementation of advanced communication technologies will drive the growth of the distributed energy management systems market. Over the next decade, China plans to invest $6 trillion in infrastructure as part of its urbanization development plan. Private and public investment in UK infrastructure urbanisation is expected to be worth around $375 billion. Hence, these investments create opportunities for the distributed energy resource management system market.
The initial phase of DER deployment is capital-intensive, and the role of local and national governments in infrastructure transformation is critical. The technology initially required huge investments to build transmission networks between customers and the smart grid. In addition, effective deployment requires strong coordination across customary organizational boundaries, significant process changes, and strict governance. High post-deployment operating and maintenance costs are also a major concern for utility providers. Therefore, higher installation and maintenance costs are the main factors restricting the development of this market.
On the other hand, distributed energy resource management systems make extensive use of information and communication technologies, automated control capabilities, and advanced metering and energy storage technologies to meet electricity demand. Data from these devices is vulnerable to cyber-attacks and data breaches. Preventive measures require significant investment, which can negatively impact the implementation of new technologies such as smart grids. Therefore, cybersecurity issues related to the energy sector as well as distributed energy resources are a major challenge for the industry.
By component, the distributed energy management system market software market is expected to grow at the fastest rate during the forecast period. The growth of the software components market is attributed to the continuous monitoring of forecasting solutions, management of communication devices, and real-time configuration data.
Based on the application industry, the market has been segmented into solar photovoltaic installations, wind turbines, energy storage systems, cogeneration systems, and electric vehicle charging stations. From 2021 to 2026, the growth rate of solar PV is expected to be higher than that of other segments.
For end users, the industry is expected to grow at the fastest rate during the forecast period. The industrial sector will hold the largest market size during the forecast period. The growth of this segment is driven by the growing electricity demand in the industrial sector and the need to utilize electricity efficiently.
From a regional market perspective, North America is expected to be the largest market during the forecast period. North America, Europe, South America, Asia Pacific, Middle East, and Africa are the key regions studied for the Distributed Energy Resource Management Systems market. North America is expected to be the largest market during the forecast period, driven by substantial growth in electricity demand in North America, whose power sector faces challenges in meeting energy efficiency goals, complying with federal carbon policies, and consolidation. Therefore, investments in distributed energy resource management systems are increasing to overcome these challenges.