Distributed energy generation refers to small-scale power generation near the point of consumption by utilizing renewable sources such as solar PV, wind, hydropower and biomass. These distributed generators offer several advantages such as enhancing energy independence, grid resiliency and reducing carbon footprint.
The global Distributed Generation Market is estimated to be valued at US$ 364.46 Billion in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Expanding distributed energy infrastructure is one of the major trends propelling the growth of the distributed generation market. Distributed energy resources (DERs) are gaining traction globally as they allow harnessing renewable energy sources closer to end users and reduce grid congestion issues. Government bodies across various countries are extensively funding and promoting installation of renewable DERs to boost decentralized power generation. For instance, in the US, the Federal Energy Regulatory Commission issued Order 2222 in 2020 directing grid operators to develop rules facilitating DERs integration with the main power grid. Such initiatives are creating conducive environment for distributed generation uptake.
SWOT Analysis
- Strength: Distributed generation provides greater energy independence for consumers and businesses as it allows them to generate their own electricity. It also enhances grid reliability as distributed resources can provide power during outages.
- Weakness: High initial capital costs for distributed generation equipment and installation. Interconnection challenges with the existing electric grid infrastructure. Reliability and maintenance issues for some distributed technologies.
- Opportunity: Increasing demand for reliable and affordable electricity. Rapid drops in renewable technology costs like solar PV making distributed generation more economical. Supportive government policies and incentives for distributed energy adoption.
- Threats: Resistance from utilities due to loss of centralized control and potential loss of revenues. Potential oversupply of energy during certain times of the day challenging centralized grid operations. Higher integration costs if not properly planned.
Key Takeaways
The global distributed generation market is expected to witness high growth over the forecast period driven by declining technology costs, increasing demand for reliable power supply and supportive government policies. The global Distributed Generation Market is estimated to be valued at US$ 364.46 Billion in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2024 to 2031.
The Asia Pacific region currently dominates the global distributed generation market due to rapidly growing energy needs and capacity additions in China and India. Supportive government initiatives and investments in clean energy are also boosting adoption of distributed solar PV and wind power in the region. North America is another major market spurred by rising emphasis on energy independence, access to affordable power and technology advancements.
Key players operating in the distributed generation market are Siemens, General Electric, Schneider Electric, MAN Diesel & Turbo, Vestas, Suzlon, Wood Group, Caterpillar, Cummins and Capstone Turbine. Leading solar PV companies include SunPower, SolarEdge, Yingli and First Solar. The distributed generation market is characterized by presence of both international manufacturers and local players. Ongoing partnerships and collaborations are helping to address integration challenges with the electric grid.
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