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.
In its 2022 Outlook, the International Energy Agency (IEA) revised its estimate for renewable energy investments considerably upwards, as the speed of investments in renewable energy has exceeded prior estimates, particularly in Asia and Europe. The IEA predicts that the share of renewable energy of total energy production will rise to 43% by 2023.1) According to the International Renewable Energy Agency (IRENA), the intergovernmental organization supporting countries in their transition to sustainable energy, the 1.5 degree stabilization in global average temperature is vital and to reach it, necessitating considerable investments in energy efficiency in the future. According to their estimate, the share of renewable energy production should be 65% by 2030.2)
The EU’s renewable energy targets call for a 45% share of renewable energy in total energy production by 2030 and a reduction of greenhouse gas emissions by at least a minimum of 55% by 2030 compared to 1990. Under the European Climate Law, the EU commits to become carbon neutral by 2050, as the first continent in the world to do so.3) The European Green Deal for Europe’s investment plan finances and promotes renewable energy projects in Europe.4) The energy crisis triggered by Russia’s invasion of Ukraine has accelerated renewable energy deployment in Europe.1) Thus the growth drivers for the renewable energy market have remained at least the same as before.
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.
As a result of the energy transition, investments in the power grid and its resilience are estimated to be of the order of 650 mrd USD by 2030 and almost 800 mrd USD by 2050.2)
Market outlook
Development of the energy storage market has been positive and the trend is expected to continue. In Europe, energy storage capacity is expected to grow by 25 GW by 2030 and the size of the market to reach 15 mrd USD not later than in 2027.5)
The global market is estimated at 51 mrd USD in 2024 and 100 mrd USD in 2029. The annual growth rate is forecast at 14%.6)
The power quality market is likewise estimated to continue on a strong growth path of approximately 7%.
The market size is estimated to reach 44 mrd USD by 2025 and 70 mrd USD by 2033.7) and 8) The forecasts remained very much on the same level compared to last year.
For the Company’s power quality solutions business, the key markets are active harmonic filters, static synchronous compensators, and static VAR compensators, with a total market value of approximately 2.6 mrd USD in 2022, and this market is expected to grow to 4.4 mrd USD by 2031. The size and growth estimates in the key markets are estimated to remain as before.9, 10, 11)
1) IEA Renewable Energy Market Update (kesäkuu 2023)
2) IRENA, 2022: World Energy Transitions Outlook, A roadmap to 2030, https://www.irena.org/Digital-Report/World-Energy-Transitions-Outlook-2022
3) European Commission, https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-targets_en
4) https://investeu.europa.eu/contribution-green-deal-and-just-transition-scheme_en
5) Aurora Jul22 European Battery Market Attractiveness Report
6) https://www.mordorintelligence.com/industry-reports/energy-storage-market
7) Market Research Future, https://www.marketresearchfuture.com/reports/power-quality-equipment-market-3088
9) UMR, Global Harmonic Filter Market 2016-2031, https://upmarketresearch.com/
10) Future Market Insights, https://www.futuremarketinsights.com/reports/static-var-compensator-market
11) Business Research Insights, https://www.businessresearchinsights.com/market-reports/gate-bipolar-transistors-statcom-market-107313