Power Generation Market Size, Share & Industry Analysis, By Type (Conventional/Non-Renewable {Nuclear and Fossil Fuels}, Non-Conventional/Renewable {Solar, Wind, Hydro, and Others}, By End-User (Residential, Commercial, Industrial, and Others), and Regional Forecast, 2024-2032

The global power generation market size was valued at USD 941.16 billion in 2023. The market is projected to grow from USD 1,062.27 billion in 2024 to USD 2,022.56 billion by 2032, exhibiting a CAGR of 8.38% during the forecast period.

Power generation refers to the production of electrical power from different energy sources such as sunlight, wind, water, fossil fuels, and other sources at the power plants. Power plants use steam boilers, wind turbines, solar panels, and other technologies to convert these sources into electricity. The power generated at plants is transmitted through high-voltage power lines to substations, where it is stepped down to lower voltages and further distributed to homes and businesses through local power lines.

The outbreak of COVID-19 pandemic negatively impacted the market. The temporary halts in commercial and industrial activities and workforce shortages in power plants due to the imposition of lockdowns and government regulations led to a downfall in electricity demand, further affecting the market growth.

Power Generation Market Trends

Installation of Grid-energy Storage Systems to Enhance Market Outlook

Grid-energy storage is gaining traction in the modern power grid for storing surplus energy and releasing it when demand peaks or renewable sources are not generating electricity, such as during nighttime or weather disruptions. It includes several technologies such as Battery Energy Storage Systems (BESS), pumped hydroelectric storage, and others for storing the surplus energy generated from solar, wind, hydro, and other power plants. In addition, due to the rising focus on conserving electricity and increasing the share of renewable energy sources in the energy mix, the installation of grid energy storage systems is witnessing a rise globally. For instance, in April 2024, Socomec, a global energy storage solutions manufacturer, launched the Energy Storage System (ESS) Grid Lab near Strasbourg, France. It is constructed in around 500m² for developing technologies that enhance grid security, resilience, and reliability. 

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Power Generation Market Growth Factors

Urbanization and Industrialization to Play a Key Role in Market Expansion

The rise in urbanization and industrialization, supported by the growth in the population across the world, has been driving the power generation capacities globally. Urbanization leads to the expansion of residential, commercial, and industrial facilities that require reliable power supply for lighting, heating, cooling, machinery, and other essential services. In addition, urban growth necessitates the construction of new buildings, transportation networks, and utilities, all of which require electricity. Moreover, the governments of Brazil, India, and other developing countries are encouraging FDI and supporting the growth of SMEs, which would play a key role in increasing the demand for power during the forecast period. UNCTAD's global Foreign Direct Investment (FDI) has increased from around USD 962 billion in 2020 to about USD 1.3 trillion in 2022. Thus, the expansion of residential, commercial, and industrial sectors due to urbanization and Industrialization is projected to drive the market growth during the forecast period.

Rising Electrification Globally to Stimulate Market Growth

The rising support by nations' governments globally to expand the electricity supply to remote and rural areas contributes to the demand for power generation. The National Electrification Plan (NEP), launched in 2017, aims to achieve universal electricity access across Ethiopia by 2025. The plan targets 65% of the population to be connected to the grid, with the remaining 35% accessing electricity through off-grid technologies such as standalone solar systems and mini-grids. In addition, the transition of the transportation sector from fossil-based fuels to electricity-based is also playing a key role in increasing electricity consumption in the global economy. The EV30@30 campaign, launched in June 2017 at the 8th Clean Energy Ministerial (CEM), aims to speed up the adoption of Electric Vehicles (EVs). Its goal is for electric vehicles to make up at least 30% of new vehicle sales by 2030. The campaign currently includes 13 member countries and has support from 23 companies and organizations. Hence, the electrification of sectors such as transportation, heating (electric heating systems), cooking (induction cooktops), and others would play a key role in driving the global power generation market growth in the forthcoming years.

RESTRAINING FACTORS

High Upfront Costs for the Construction of Power Plants May Constrain Market Expansion

The high cost incurred in the construction of power plants, coupled with the additional cost incurred for operating the power plants, is limiting the global power generation market growth. South Sudan, Niger, Yemen, and many other financially deficit countries are facing the challenges of high costs for the construction of power plants. These nations also struggle to secure affordable financing from the World Bank, IMF, and other global organizations due to perceived risks, inadequate credit ratings, and high interest rates, which hinder their ability to fund large-scale energy infrastructure projects independently. In addition, the financial barrier slows down infrastructure development and limits access to advanced technologies such as renewable energy systems and energy storage solutions that require substantial upfront investment. Hence, the high cost of the development and operation of the power plants results as a significant restraining factor for the development of the global market.

Power Generation Market Segmentation Analysis

By Type Analysis

Non-conventional/Renewable Segment Dominates Due to Rising Carbon Neutrality Initiatives

Based on type, the market is segmented into conventional/non-renewable and non-conventional/renewable. The non-conventional/renewable segment holds the major power generation market share and is anticipated to witness the fastest growth rate during the study period due to its lower carbon emission power generating capacity, which is boosting its installations globally. Furthermore, the rising initiatives by governments of different countries to attain zero carbon emissions by 2050 to 2070 have led to the installation of numerous renewable power plants across different nations globally.

The conventional/non-renewable segment consisting of coal, oil, gas, and nuclear-based products currently holds a considerable share of the market due to their established infrastructure for a longer period. The drawbacks of carbon emissions from coal, oil, and natural gas have led to a downfall in their installation in recent years. They are poised to continue to diminish during the forecast period as well.

By End-User Analysis

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Industrial Segment Dominates Owing to the Operation of Large-Sized Machinery

Based on end-user, the market is divided into residential, commercial, industrial, and others. The industrial segment holds the dominating share of the market due to the extensive use of electricity for machinery, production processes, heating, cooling, lighting, and others for industrial operations. Moreover, the rising industrialization, propelled by the surge in global population, would lead to the growth of the industrial segment in the market.

The commercial segment is anticipated to grow at the fastest rate in the coming years, owing to the rising inclination from fossil-fuel-based products toward electric products. In addition, the increasing electrification of the commercial buildings is projected to play a key role in the growth of the commercial segment in the forthcoming years.

REGIONAL INSIGHTS

Geographically, the market is studied across North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

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Asia Pacific holds the largest market share and is expected to grow at the fastest rate during the study period owing to the rapid economic development occurring in China, Indonesia, India, and other countries. The expansion of industrial and commercial activities is experiencing a surge, further leading to the demand for power generation in the region.

North America also holds a considerable share of the market due to the rapid transition toward cleaner energy sources such as natural gas and renewable energy. The growing investment in the energy sector for energy storage and grid modernization is also playing a key role in the development of the market.

Europe’s market for power generation holds a significant share owing to the growing installation of solar and wind power projects. The government's commitment to achieve carbon neutrality by 2050 is also contributing to the growth of renewable energies, further propelling the market growth.

Latin America is expected to grow steadily during the assessment period owing to the expansion of hydroelectric power projects. In addition, the growing electrification programs for expanding electricity in rural and remote areas are further leading to market growth.

The Middle East & Africa is witnessing significant growth in the power generation market owing to the construction of new cities and growing residential & commercial sectors. The growing focus of the regional countries' governments on increasing the tourism industry is also leading to the expansion of commercial sectors such as hotels, airports, metros, and others.

KEY INDUSTRY PLAYERS

Key Players Deploy Smart Grid Technologies to Conserve Energy

The leading companies are deploying smart grid technologies and battery storage systems to conserve energy. Enel is one of the key players active in the power generation industry, focusing heavily on the renewable sectors. The company generated 93,986 GWh of electricity from renewable sources in the first nine months of 2023, a 12.6% year-on-year increase. The company’s installed renewables capacity grew to 54,821 MW, up from 51,563 MW the previous year. Significant increases in green power generation were recorded in Italy, Iberia, Latin America, and North America, with a 7.2% rise in North America.

LIST OF TOP POWER GENERATION COMPANIES:

• State Grid Corporation of China (China)


• Enel (Italy)


• EDF Energy (France)


• TEPCO (Japan)


• KEPCO (South Korea)


• Reliance Power (India)


• Iberdrola (Spain)


• NextEra Energy Inc (U.S.)


• American Electric Power (U.S.)


• China Huaneng Group Co Ltd (China)


• China Datang Corp (China)


• Kansai Electric Power Company (Japan)


• NTPC Limited (India)


• China Energy Investment Corporation (China)


• Engie (France)

KEY INDUSTRY DEVELOPMENTS:

• March 2024 - Korea Western Power Co. (KOWEPO) and EDF Renewables entered a joint development agreement for a 1.5 GW solar farm in Khazna, United Arab Emirates (UAE). They are also in advanced talks with Abu Dhabi's Emirates Water and Electricity Co. (EWEC) for a similar project in the Al-Ajban area.


• February 2024 - Energies PH, Inc., through its affiliate San Bernardino Ocean Power Corp., entered a contract with Inyanga Marine Energy Group to build Southeast Asia’s first tidal power plant on Capul Island, Northern Samar, Philippines. The 1 MW plant, using Inyanga's HydroWing technology, will be deployed in late 2025. It will connect to Capul's current 750 kW diesel power plant and include a microgrid with tidal power, solar PV, and energy storage, offering a sustainable alternative to fossil fuels.


• December 2023 - Telstra signed a Power Purchase Agreement (PPA) with Global Power Generation (GPG) for electricity from a 100 MW solar farm near Bundaberg, Queensland, Australia. Construction started in 2024, with operations beginning in late 2025. The agreement secures up to 153 GWh annually, enough to power about 30,000 homes.


• December 2023 - Vestas received an order from Pattern Energy to power the SunZia Wind project in New Mexico, U.S. This 1.1 GW order includes 242 V163-4.5 MW turbines, making it the largest single onshore project and the biggest order globally for Vestas’ newest high-capacity turbine.


• January 2022 - SSE acquired its first solar project, a 30MW solar farm at Littleton Pastures near Evesham, Worcestershire, U.K., which was scheduled for completion in late 2023. The 77-acre site will power approximately 9,400 homes. This project is part of SSE's USD 13.1 billion investment program aimed at achieving net zero. SSE is investing around USD 7.34 million daily in low-carbon infrastructure and developing over 1 GW in solar and battery storage, including a recently announced 50 MW battery storage project in Wiltshire.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects such as prominent companies, product types, and leading applications of the product. Besides, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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Report Scope & Segmentation