Market outlook
Renewable energy market continues strong growth
The global climate goals and policies intended to mitigate climate change and reduce human emissions of greenhouse gases have an increasing significance for the future of our globe. At the same time, the share of renewable forms of energy is growing in total energy production and the energy market is going through a major structural change.
The UN climate summit in Baku decided to triple the funding granted to developing countries for boosting the green transition. At the same time, it was acknowledged that climate change targets must be sped up in the future. The purpose of the targets is to boost the green transition globally and limit climate warming to 1.5 degrees Celsius. 1)
An estimated 2,000 billion dollars is invested in renewable energy projects per year. The IEA calls for stronger action to improve energy efficiency. Energy efficiency improvements have the potential to reduce emissions more than any other actions.2)
The EU has defined a shared target of renewables covering a 42.5% share of electricity production by 2030. To reach the minimum target of the EU, renewable electricity production deployment should double from the current numbers.3) Currently, Sweden and Finland have the highest shares of renewable energy in the EU 4).
The company estimates that the short and long-term market outlook for renewable energy and for energy storage in particular remains positive, and the market is expected to grow strongly. In Merus Power’s home market in the Nordic countries, different sources indicate continued growth. The energy storage market in Europe is also growing. Electricity market development is at different stages in different countries, and this development creates a favorable market for energy storage at different times in different countries. This non-simultaneity creates continuity for the company’s energy storage market growth. However, the unifying European electricity market will make the market development clearer and more predictable in the long term.
The energy transition and growing investments require smart technology
Alongside other factors, also development of technology expedites the energy transition by lowering the costs of switching to renewable energy. Energy production is distributed around the grid and to new areas. This characteristic of the energy transition causes challenges in forecasting and controlling the status of the grid. Supply and demand must be constantly balanced. The fragmentation and variability of the new energy sources increases their complexity, which underlines the significance of efficient energy management. Hence, it is all the more important to manage, regulate, and store energy efficiently so as to ensure a balance between demand and supply.
Market outlook
Development of the energy storage market has been positive and the trend is expected to continue. It has been estimated that there were approximately 7 GW of energy storages in the EU in 2023, and the amount must increase to 57 GW by the year 2030. The energy storage market in Europe is expected to grow to EUR 33 billion by 2030. 5)
The power quality market is likewise estimated to continue on a strong growth path of approximately 7%. Market size is estimated to have been USD 17 billion in 2024 and to grow to USD 24 billion in 2029. 6)
From the point of view of the company’s products, the power quality market forecasts remain similar to those of last year. From the point of view of the company’s business, the most important product segments for power quality solutions are active harmonic filters, static synchronous compensators and static VAR compensators. Their combined market size was approximately USD 3.1 billion in 2024. This market is expected to grow to USD 6.0 billion by 2033.
1) cop 29, 24.11.2024 , https://unfccc.int/news/cop29-un-climate-conference-agrees-to-triple-finance-to-developing-countries-protecting-lives-and
2) IEA, Energy Outlook 2024: https://www.iea.org/reports/world-energy-outlook-2024
3) European Commission, https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-targets_en
4) EEA 10-2024, share of energy consumption from renewable source in Europe, https://www.eea.europa.eu/en/analysis/indicators/share-of-energy-consumption-from
5) Aurora, European Battery Market, February 2024
6) https://www.mordorintelligence.com/industry-reports/energy-storage-market