Digital Power Utility Market Size, Share & COVID-19 Impact Analysis, By Technology (Hardware and Software & Services), By Sector (Power Generation, Transmission & Distribution, and Power Consumption) and Regional Forecasts, 2021-2028

The global digital power utility market size was USD 50.82 billion in 2020. The market is projected to grow from USD 55.02 billion in 2021 to USD 239.38 billion by 2028, exhibiting a CAGR of 23.4% during the forecast period. The global impact of COVID-19 has been unprecedented and staggering, with the global market witnessing a negative demand across all regions. Based on our analysis, the market exhibited a lower growth of about -6.0% in 2020 than average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s growth and demand, returning to pre-pandemic levels once the pandemic is over.  

Access to power or energy is a vital factor for the different regions to boost economic development and the well-being of the local people. Companies involved in the power generation industry are now focused on delivering sustainable and environmentally friendly energy to meet the needs of the people. The power generation, transmission, and distribution processes face numerous challenges and energy losses during their operations. Digital power utility solutions are used to make these processes more efficient. The digital power utility solution helps the power distributor by providing a real-time solution to control the assets using the cloud and Internet of Things applications. It can also enhance the process's security, storage, and flexibility and provide cloud-enabled solutions to optimize the delivery speed.

COVID-19 IMPACT

Supply Chain Disruptions to Hamper Industry Growth

The COVID-19 pandemic and subsequent lockdowns have significantly reduced energy demand, hampering the growth prospect. The maintenance activities have been hit, and there is lower utilization of power plants, which further led to the postponement of the capacity increment plans for these power plants. The pandemic has restricted manufacturing and production centers where industrial demand has decreased; owing to the decrease in need, the prices in electricity markets have declined, along with LNG and CO₂ prices. In addition, the renewable energy projects were also delayed due to a lack of capital and equipment.

LATEST TRENDS

Digitalization of Power Plants Worldwide will Support Market Growth

Digitalization in plants has been increasing due to growing digital technology and the emergence of software distribution models, such as software-as-a-service; this software makes the digital solution affordable for the developers. In addition, the usage of digital solutions in electricity plants can reduce the emission of carbon dioxide by enabling fuel analysis and better combustion performance. It improves the flexibility to increase the share of renewables and manage the impact of cycling. Digitalization also allows the developer to respond to its regulatory and market changes.

Digital Buildings Will Unlock New Opportunities for Energy Efficiency and Better Power Management

The digitalization and technological advancement in the buildings will create an opportunity for energy efficiency and better power management. The digitalization in buildings, such as sensors, should be capable of sensing energy and power demand, temperature, air quality, presence, and impact of moisture. Digital technologies and solutions will be needed to achieve energy efficiency, automated buildings. Several standards and guidelines regarding future-oriented, integrated investment plans for building-related digitalization technologies will be growing in the new construction and existing buildings.

DRIVING FACTORS

Growing Capital Investment in Renewable Energy Projects to Boost Market Growth

The rising focus on renewable energy projects and energy storage devices, thermally activated technologies, and transmission & distribution systems has enabled more investments in renewable energy projects.  The United Nations Environment Programme published a report stating that the global investment in renewable energy projects in 2018 that grew to USD 272.9 billion is considered the 5^th successive year when the investment had crossed USD 250 billion.

Rising Demand for Energy in Various Sectors Will Promote Adoption of Digitalization

The growing industrialization and urbanization have led to a surge in energy demand. To furnish rising energy demand and depletion of fossil fuels, it has become necessary to produce renewable energy globally. In 2018 the investment in renewable capacities had increased three times higher when compared with coal and gas-fired generation capacity. The renewable energy will account for nearly half of global electricity output by 2050 as per the projection given by the U.S. Energy Information Administration (EIA) . The growing population, increasing disposable income and rising urbanization rates have increased electricity demand across the globe. As per the United Nations report, it was projected that around 68% of the world’s population will live in urban areas by 2050. Therefore, and increasing potential for renewable energy across various sectors will support the market during the forecasted period.

RESTRAINING FACTORS

High Operating Cost to Transform the Existing Infrastructure Could Hamper Market Growth

The need for a massive influx of funds is expected to challenge key industry players in the landscape. The India requires an investment of USD 60-80 billion to upgrade its grid infrastructure over the next five years as per the IEE (Institute of Energy Economics) and Financial Analysis estimations. The electric utilities are forecast to invest USD 3.2 trillion globally in new and replacement transmission and distribution infrastructure. The transformation or up-gradation of existing infrastructure digitally will require high investment, which is hindering the market. However, the transformation of existing infrastructures improvements and proficiencies of the electricity delivery systems are supporting the digital power utility market growth

SEGMENTATION

By Technology Analysis

Hardware Technology Will Dominate the Global Market

Based on technology, the market is bifurcated into hardware and software& services. The hardware segment dominated the global market owing to significant investment in smart metering and EV charging. Furthermore, the hardware is extensively used in next-generation equipment. The demand for traditional metering systems is declining, which has promoted the inclination towards technologies and smart meters. However, the software and services segment is also observing substantial growth owing to new software solutions, such as Artificial intelligence, machine learning, or other digital approaches available to the utility industry. Furthermore, the shifting trends toward automation of the system also enable the growth of the software & service segment, as automated systems require digital support to run their processes smoothly.

By Sector Analysis

Power Consumption Segment to Dominate the Market during the Forecast Timeframe

On the basis of sector, the market is segmented into power generation, transmission & distribution, and consumption. The power consumption sector is expected to dominate the global market owing to the growing demand for electricity from non-residential buildings and increased usage of the HVAC. The transmission & distribution segment is expected to be the fastest-growing segment in the global market because the digital utility solution enables users to perform the transmission and distribution activities effectively.

REGIONAL INSIGHTS

The market has been examined geographically across five major regions: North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa. North America region dominated the global digital power utility market share owing to the increase in the footprint of different industries in the region, which has led to the growth of the power transmission & distribution industry. The market is expected to witness healthy growth in the region. The growing demand for intelligent buildings and building automation has boosted the installation of smart metering and sensors in the area, which also supported the market growth. Additionally, an increasing share of renewable power generation and energy efficiency activities is estimated to drive the market in this region. The rising standard and initiatives by the government, the growing number of smart cities, smart communities, and electric vehicles are boosting the market.

Europe region is also accounted for significant share in global digital power utility market due to rising renewable power generation and growth in the industrial sector. The report circulated by the European Energy Industry in 2017 shows that the power industry's investment is expected to reach USD 86.73 billion during the 2021-2030 period from USD 58.73 billion over 2011-2020. Therefore, the rising industrial and renewable energy investments offer lucrative growth opportunities for the market. Furthermore, installing the smart grid also drives the sales of the market in the region.

The Asia Pacific region is likely to be the fastest-growing market due to increasing investment in large industries and commercial projects. For example, In 2019, India had more than 300 smart city projects worth USD 2 billion in the pipeline. Moreover, the increasing investment in renewable energy, adoption of green building models, and rising government support are the prominent factors attributed to the market's growth. The growth of fossil power generation in countries, including China and India is expected to boost the region's global market.

The Middle East & African countries are focused on developing smart grids and increasing entrance to the use of power. The growth in these activities is expected to have a positive impact. The advancement in augmented data analytics integrated distributed energy resource (iDER) and Artificial Intelligence is evolving, which will add a positive outlook for the growth of this market during the forecast period. The Latin American region is focused on increasing its power transmission and distribution capacities in various countries, such as Brazil, Mexico, and Argentina, supporting the market's growth.

KEY INDUSTRY PLAYERS

ABB, GE, and Siemens the Leading Players Shaping the Market Size

Current trends suggest that the market will be mainly dominated by the services being provided by major participants. In recent years, new key players have entered the market and continuous research and development activities are being carried out to keep pace with the evolving technologies and market players.

LIST OF KEY COMPANIES PROFILED:

• ABB  (Switzerland)


• General Electric Company (U.S.)


• Siemens (Germany)


• Accenture Plc (Ireland)


• Capgemini Ltd (France)


• SAP SE (Germany)s


• IBM Corporation (U.S.)


• Microsoft Corporation (U.S.)


• Oracle Corporation (U.S.)


• Wipro Ltd (India)


• Infosys Ltd (India)


• Cognizant Technology Solutions (U.S.)

KEY INDUSTRY DEVELOPMENT:

• October 2021 – Wipro Limited, an Indian multinational organization, has signed a multi-year global strategic IT and digital deal with the National Grid, a British multinational electricity and gas utility provider, to accelerate its digital innovation journey.


• June 2019 –  General Electric, an American multinational company, has signed a 3-year agreement with Enel green power to provide centralized data collection, remote monitoring services, on-site sensor assessment, and predictive analytics solutions to advance its operation and maintenance service.

REPORT COVERAGE

The global digital power utility market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and upcoming product developments. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the growth of the market over recent years.

Report Scope & Segmentation