Virtual Power Plant Market Report by Technology (Distribution Generation, Demand Response, Mixed Asset), Source (Renewable Energy, Cogeneration, Energy Storage), End User (Industrial, Commercial, Residential), and Region 2024-2032

Virtual Power Plant Market Report by Technology (Distribution Generation, Demand Response, Mixed Asset), Source (Renewable Energy, Cogeneration, Energy Storage), End User (Industrial, Commercial, Residential), and Region 2024-2032

Report Format: PDF+Excel | Report ID: SR112024A5688
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Market Overview:

The global virtual power plant market size reached US$ 1.7 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 11.6 Billion by 2032, exhibiting a growth rate (CAGR) of 23.42% during 2024-2032. The growing adoption of renewable energy sources, increasing development of advanced energy management and control systems, and rising adoption of electric vehicles (EVs) as a sustainable alternative to fuel-run cars are some of the major factors propelling the market.

Report Attribute 
Key Statistics
Base Year
2023
Forecast Years
2024-2032
Historical Years
2018-2023
Market Size in 2023
US$ 1.7 Billion
Market Forecast in 2032
US$ 11.6 Billion
Market Growth Rate 2024-2032 23.42%


A virtual power plant (VPP) is a virtual, cloud-based power station that connects and controls a multitude of decentralized energy assets, including solar panels, wind turbines, and energy storage systems. It enhances the resilience of energy grids by efficiently balancing supply and demand, reducing the risk of outages during peak periods or unforeseen events. It also helps reduce electricity costs by optimizing energy production and consumption, leading to savings for both consumers and grid operators. It empowers consumers to become prosumers, fostering a more decentralized and democratized energy system.

At present, the increasing demand for VPP to enable peer-to-peer energy trading among participants is impelling the growth of the market. Besides this, the rising environmental awareness and the imperative to reduce carbon emissions, prompting governments and utilities worldwide to embrace VPPs to efficiently manage intermittent energy sources, are contributing to the market growth. In addition, the growing deployment of advanced technologies, including Internet of things (IoT) devices, smart meters, and grid-edge solutions, is offering a favorable market outlook. Apart from this, the increasing adoption of electric vehicles (EVs) as a sustainable alternative to fuel-run cars is supporting the growth of the market. Additionally, the rising proliferation of advanced analytics and artificial intelligence (AI), which empower VPP operators to forecast energy demand more accurately, optimize energy dispatch, and predict equipment failures, is bolstering the growth of the market.

Virtual Power Plant Market Trends/Drivers:

Growing adoption of renewable energy sources

The growing adoption of sustainable or renewable energy sources is currently exerting a profoundly positive influence on the expansion of the virtual power plant (VPP) market. Besides this, the rise in renewable energy installations like solar panels and wind turbines, is increasing the decentralized energy generation paradigm. This proliferation of distributed energy resources (DERs) is creating a pressing need for efficient management and optimization of these assets. VPPs are proving to be indispensable in harnessing the potential of renewables, as they enable seamless integration, aggregation, and control of diverse DERs, thereby enhancing grid stability and reliability. Furthermore, as the global community intensifies its commitment to mitigating climate change and decreasing greenhouse gas emissions, governing agencies and regulatory bodies are actively promoting the utilization of renewable energy.

Rising shift towards grid decentralization

The rising shift towards grid decentralization is propelling demand for virtual power plants (VPPs). Besides this, grid decentralization is fostering greater incorporation of renewable energy sources into the grid. In addition, solar panels and wind turbines are being installed in various locations, from residential rooftops to commercial facilities, contributing to a distributed energy generation system. This proliferation of decentralized renewable resources plays a pivotal role in the expansion of VPPs. Moreover, the trend of grid decentralization is facilitating enhanced grid resilience. This is particularly important for dealing with climate-related challenges and natural disasters. Apart from this, with decentralized resources spread across a broader geographic area, the grid becomes less susceptible to single points of failure, ensuring a more reliable and robust energy supply. This heightened reliability is a driving force behind the growing interest in VPPs.

Increasing development of advanced energy management and control systems

Presently, the increasing development of advanced energy management and control systems is bolstering the growth of the virtual power plants (VPP) market. Besides this, advancements in energy management technologies are enhancing the efficiency and reliability of VPPs. These systems are becoming increasingly sophisticated in their ability to aggregate, monitor, and optimize distributed energy resources in real time. This continuous improvement ensures that VPPs can respond more effectively to fluctuations in energy supply and demand, ultimately bolstering their appeal to utilities, grid operators, and energy consumers. Moreover, the incorporation of artificial intelligence (AI) and machine learning (ML) algorithms within energy management and control systems is enabling VPPs to predict and adapt to energy market dynamics with unprecedented precision. This real-time analysis allows VPPs to maximize the utilization of renewable energy sources, storage systems, and demand-side resources, thereby contributing to grid stability and reducing greenhouse gas emissions.

Virtual Power Plant Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional and country levels from 2024-2032. Our report has categorized the market based on technology, source and end user.

Breakup by Technology:

  • Distribution Generation
  • Demand Response
  • Mixed Asset
     

Demand response dominates the market

The report has provided a detailed breakup and analysis of the market based on the technology. This includes distribution generation, demand response, and mixed asset. According to the report, demand response represented the largest segment.

Demand response is a strategy used to balance electricity supply and demand by adjusting the consumption of electricity during times of high or low availability. It involves incentivizing consumers to reduce or shift their electricity usage when the grid is stressed or when electricity prices are high. VPPs continuously monitor the electricity grid, including supply, demand, and pricing data, in real-time. They also gather information on the state of the distributed energy resources within the system. VPPs use advanced algorithms and ML to forecast electricity demand patterns. They predict when demand will peak and when there will be excess supply from renewable sources.

Breakup by Source:

  • Renewable Energy
  • Cogeneration
  • Energy Storage
     

A detailed breakup and analysis of the market based on the source has also been provided in the report. This includes renewable energy, cogeneration, and energy storage.

Renewable energy sources are sources that can be replenished naturally and are considered environmentally sustainable because they do not deplete finite fossil fuel reserves and produce fewer greenhouse gas emissions. They play a crucial role in VPPs as they can help reduce carbon footprint and provide clean and sustainable energy.

Cogeneration is a valuable source of energy for virtual power plants (VPPs). Virtual power plants are typically composed of a diverse set of distributed energy resources that can be aggregated and controlled as a single entity to optimize energy generation and consumption. Cogeneration fits well into the concept of VPPs because it can provide both electricity and useful heat from a single energy source.

Energy storage systems are an important part of virtual power plants (VPPs) as they enable the efficient management and optimization of diverse distributed energy resources. Energy storage provides flexibility by storing excess energy when it is abundant and releasing it when demand is high or renewable energy generation is low.

Breakup by End User:

  • Industrial
  • Commercial
  • Residential
     

Industrial holds the largest share in the market

A detailed breakup and analysis of the market based on the end user have also been provided in the report. This includes industrial, commercial, and residential. According to the report, industrial accounted for the largest market share.

VPPs help industrial facilities manage and optimize their energy consumption by integrating various DERs, such as solar panels, wind turbines, combined heat and power (CHP) systems, and energy storage devices. Industrial VPPs participate in demand response programs by changing their energy consumption in response to grid signals or price fluctuations. This helps balance supply and demand on the grid and can generate revenue for industrial facilities. They can also automate load shedding or load shifting processes to reduce energy consumption during peak demand events. They enhance energy resilience by enabling seamless transitions between grid power and on-site generation/storage during disruptions, minimizing downtime, and ensuring uninterrupted operations.

Breakup by Region:

  • North America
    • United States
    • Canada
  • Asia-Pacific
    • China
    • Japan
    • India
    • South Korea
    • Australia
    • Indonesia
    • Others
  • Europe
    • Germany
    • France
    • United Kingdom
    • Italy
    • Spain
    • Russia
    • Others
  • Latin America
    • Brazil
    • Mexico
    • Others
  • Middle East and Africa
     

North America exhibits a clear dominance, accounting for the largest virtual power plant market share

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America accounted for the largest market share.

North America held the biggest market share due to the rising focus on integrating renewable energy sources, such as hydel, wind, and solar into the grid. Besides this, the increasing awareness about the importance of maintaining grid resilience is contributing to the growth of the market. Apart from this, the rising conduction of demand response programs, allowing consumers to actively participate in managing their energy consumption is supporting the growth of the market. Additionally, the increasing construction of solar and hydel power plants is strengthening the growth of the market.

Asia Pacific is estimated to expand further in this domain due to the rising awareness about the negative impacts of climate change and harmful gas emissions. Moreover, the increasing energy demands in commercial and industrial sectors are bolstering the growth of the market.

Competitive Landscape:

Key market players are investing in research operations to enhance their VPP technology by improving the software that manages distributed energy resources (DERs), enhancing grid integration capabilities, and incorporating AI and ML to optimize energy generation and distribution. They are also working on making their solutions more scalable by designing systems that can easily accommodate additional DERs, whether they are solar panels, wind turbines, battery storage, or demand response resources. Top companies are collaborating with utilities and grid operators to ensure seamless communication and coordination between the VPP and the grid infrastructure. They are also leveraging advanced analytics to gather insights from huge amounts of data generated by DERs.

The market research report has provided a comprehensive analysis of the competitive landscape. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

  • ABB Ltd.
  • AGL Energy Ltd.
  • Autogrid Systems Inc.
  • Enel Spa
  • Flexitricity Limited (Reserve Power Holdings (Jersey) Limited)
  • General Electric Company
  • Hitachi Ltd.
  • Next Kraftwerke GmbH
  • Osisoft LLC (AVEVA Group plc)
  • Schneider Electric SE
  • Siemens Aktiengesellschaft
  • Sunverge Energy Inc.

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Recent Developments:

  • In 2023, ABB Ltd acquires a minority stake in WindESCo through a strategic partnership, which will help it improve the performance and reliability of wind turbines.
  • In 2023, AGL Energy Ltd. and RayGen opened the world's largest next generation long duration energy storage plant in Carwarp, which will supply synchronous power along with increasing the capacity and flexibility of the local electricity grid.
  • In 2022, Autogrid Systems Inc. partnered with Mysa to launch utility-scale virtual power plants by employing smart thermostat technology for grid modernization.

Virtual power plant Market Report Scope:

Report Features Details
Base Year of the Analysis 2023
Historical Period 2018-2023
Forecast Period 2024-2032
Units US$ Billion
Scope of the Report Exploration of Historical Trends and Market Outlook, Industry Catalysts and Challenges, Segment-Wise Historical and Future Market Assessment:
  • Technology
  • Source
  • End User
  • Region
Technologies Covered Distribution Generation, Demand Response, Mixed Asset
Sources Covered Renewable Energy, Cogeneration, Energy Storage
End Users Covered Industrial, Commercial, Residential
Regions Covered Asia Pacific, Europe, North America, Latin America, Middle East and Africa
Countries Covered United States, Canada, Germany, France, United Kingdom, Italy, Spain, Russia, China, Japan, India, South Korea, Australia, Indonesia, Brazil, Mexico
Companies Covered ABB Ltd., AGL Energy Ltd., Autogrid Systems Inc., Enel Spa, Flexitricity Limited (Reserve Power Holdings (Jersey) Limited), General Electric Company, Hitachi Ltd., Next Kraftwerke GmbH, Osisoft LLC (AVEVA Group plc), Schneider Electric SE, Siemens Aktiengesellschaft, Sunverge Energy Inc., etc.

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
Customization Scope 10% Free Customization
Report Price and Purchase Option Single User License: US$ 3899
Five User License: US$ 4899
Corporate License: US$ 5899
Post-Sale Analyst Support 10-12 Weeks
Delivery Format PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request)

Key Benefits for Stakeholders:

  • IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the virtual power plant market from 2018-2032.
  • The research report provides the latest information on the market drivers, challenges, and opportunities in the global virtual power plant market.
  • The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
  • Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the virtual power plant industry and its attractiveness.
  • Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.

Key Questions Answered in This Report

The global virtual power plant market was valued at US$ 1.7 Billion in 2023.

We expect the global virtual power plant market to exhibit a CAGR of 23.42% during 2024-2032.

The continuous upgradation of existing power infrastructures, coupled with the increasing demand for clean electricity from renewable energy sources, is primarily driving the global virtual power plant market.

The sudden outbreak of the COVID-19 pandemic had led to the implementation of stringent lockdown regulations across several nations resulting in the temporary closure of numerous end-use industries, thereby limiting the demand for virtual power plants.

Based on the technology, the global virtual power plant market has been segmented into distribution generation, demand response, and mixed asset. Currently, demand response technology holds the majority of the total market share.

Based on the end user, the global virtual power plant market can be divided into industrial, commercial, and residential. Among these, the industrial sector exhibits a clear dominance in the market.

On a regional level, the market has been classified into North America, Asia-Pacific, Europe, Latin America, and Middle East and Africa, where North America currently dominates the global market.

Some of the major players in the global virtual power plant market include ABB Ltd., AGL Energy Ltd., Autogrid Systems Inc., Enel Spa, Flexitricity Limited (Reserve Power Holdings (Jersey) Limited), General Electric Company, Hitachi Ltd., Next Kraftwerke GmbH, Osisoft LLC (AVEVA Group plc), Schneider Electric SE, Siemens Aktiengesellschaft, and Sunverge Energy Inc.

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Virtual Power Plant Market Report by Technology (Distribution Generation, Demand Response, Mixed Asset), Source (Renewable Energy, Cogeneration, Energy Storage), End User (Industrial, Commercial, Residential), and Region 2024-2032
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