Distributed Power Generation Market

Global Distributed Power Generation Market Size (2024 to 2032)

The size of the global distributed power generation market was worth USD 313.60 Billion in 2023. The global market is anticipated to grow at a CAGR of 12.40% from 2024 to 2032 and be worth USD 897.99 billion by 2032 from USD 352.48 billion in 2024.

Distributed Power Generation (DPG) is a term used to describe the generation of electricity from multiple small-scale power sources that are located close to the point of use rather than a centralized large-scale power plant. These small-scale power sources can include renewable energy technologies such as solar panels, wind turbines, micro-turbines, fuel cells, and small-scale hydroelectric generators. By generating electricity locally, DPG can reduce transmission losses and increase the efficiency of the power system. DPG can be particularly useful in remote areas where it may be difficult or expensive to connect to a centralized power grid and in urban areas where demand for electricity is high, and transmission and distribution infrastructure may be overloaded. DPG can also help to reduce carbon emissions and improve energy security by increasing the use of renewable energy sources.

MARKET DRIVERS

The increasing energy demand is one of the key drivers of the Distributed Power Generation (DPG) market.

As traditional centralized power plants struggle to keep up with this demand, DPG offers a solution by generating electricity locally and reducing transmission losses. This localized approach to energy generation can help to improve the efficiency of the power system and reduce the strain on transmission and distribution infrastructure.

The cost-effectiveness of Distributed Power Generation (DPG) is a key driver of its adoption in the market. DPG can be more cost-effective than centralized power generation in certain situations, particularly in remote areas where it may be expensive to connect to a centralized power grid. Additionally, as the cost of renewable energy technologies like solar panels and wind turbines continues to decrease, DPG is becoming an increasingly attractive option for consumers looking to reduce their energy costs.

The global transition towards low-carbon energy sources in response to climate change is a major driver of the Distributed Power Generation (DPG) market. DPG is powered by renewable energy technologies such as solar panels, wind turbines, and small-scale hydroelectric generators, which do not emit greenhouse gases and contribute to reducing carbon emissions. As the world becomes more conscious of the impacts of climate change, the demand for the distributed power generation market is expected to continue to grow as consumers and businesses seek out more environmentally friendly options.

MARKET RESTRAINTS

The limited scalability of Distributed Power Generation (DPG) systems is a key restraint that can impact their ability to compete with traditional centralized power generation in certain situations.

While DPG systems offer numerous advantages, they are typically smaller in scale and may not be able to meet large-scale energy demands. This can make it challenging for DPG systems to compete with traditional centralized power generation in certain situations, such as powering large cities or industrial facilities. As a result, DPG may be better suited for smaller-scale applications or in areas where centralized power generation is not feasible, such as remote or off-grid locations.

MARKET OPPORTUNITIES

The Distributed Power Generation (DPG) market is poised for growth with the continued development of renewable energy technologies and energy storage systems. Advancements in technology can increase the efficiency and scalability of DPG systems, making them more competitive with traditional centralized power generation. For instance, improvements in battery storage technologies can help to address the intermittency of renewable energy sources and enable DPG systems to provide a more stable and reliable energy supply. These advancements can create new opportunities for DPG manufacturers and suppliers to meet the growing demand for sustainable and resilient energy solutions.

The development of microgrids is creating new opportunities for Distributed Power Generation (DPG) systems. Microgrids can integrate multiple small-scale power sources, including renewable energy technologies like solar panels and wind turbines, to create a more reliable and resilient energy solution for remote or off-grid locations. With the ability to operate independently or in parallel with the main power grid, microgrids can provide a reliable and consistent energy supply, even in the event of power outages or grid failures. This creates new opportunities for DPG manufacturers and suppliers to provide energy solutions for remote or off-grid locations, improving access to electricity and enabling sustainable economic development.

IMPACT OF COVID-19 ON THE DISTRIBUTED POWER GENERATION MARKET

The pandemic has led to disruptions in supply chains, delays in project timelines, and reduced investments in new energy projects. This has had a negative impact on the growth of the DPG market in the short term. On the other hand, the pandemic has also highlighted the importance of resilient and reliable energy systems, particularly in remote or off-grid locations. As a result, there has been increased interest in DPG systems as a way to provide reliable and sustainable energy solutions in these areas. Additionally, the pandemic has led to a greater focus on reducing carbon emissions and transitioning to renewable energy sources, which has also increased demand for DPG systems. Overall, while the COVID-19 pandemic has had an impact on the growth of the DPG market in the short term, it has also created new opportunities for sustainable and resilient energy solutions, which is expected to drive the long-term growth of the market.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Distributed Power Generation Market Analysis By Technology Type

Solar PV is dominating the market due to its simplicity, scalability, and declining costs. It is also a clean and renewable energy source that can be easily installed in various locations such as rooftops, carports, and open fields. Furthermore, solar PV technology has seen significant advancements in efficiency, durability, and energy storage capabilities in recent years, making it a viable option for a wide range of applications.

Global Distributed Power Generation Market Analysis By End-User Type

The industrial sector is dominating the Distributed Power Generation Market revenue shares due to their higher energy demands and a need for more reliable and cost-effective energy solutions. Additionally, many industrial facilities are located in remote areas, and connecting to the traditional power grid can be expensive and challenging. DPG systems provide a reliable and decentralized energy source, reducing the reliance on the traditional power grid.

REGIONAL ANALYSIS

The Asia-Pacific region dominates the distributed power generation market with rapid urbanization, increasing energy demand, and favorable government policies and incentives. China is a major player in the DPG market, with the government focusing on increasing the share of renewable energy in the energy mix and promoting the deployment of DPG systems. North America and Europe also have significant market shares in the DPG market, driven by the increasing adoption of renewable energy sources and the need for reliable and resilient power supply. The United States and Germany are major players in these regions, respectively. The Middle East and Africa region, despite having abundant renewable energy resources, may face market growth hindrances due to the lack of infrastructure and high upfront costs of DPG systems. In Latin America, countries such as Brazil and Chile have favorable policies and incentives to support the deployment of DPG systems, particularly in the commercial and industrial sectors. Overall, the DPG market is expected to continue growing globally, driven by the increasing demand for reliable and sustainable energy sources, technological advancements, and favorable government policies and incentives.

KEY PLAYERS IN THE GLOBAL DISTRIBUTED POWER GENERATION MARKET

Companies playing a prominent role in the global distributed power generation market include General Electric Company, Siemens AG, Schneider Electric SE, Mitsubishi Heavy Industries Ltd., Caterpillar Inc., Cummins Inc., Rolls-Royce Holdings plc, Wärtsilä Corporation, Bloom EnergyCorporation, Capstone Turbine Corporation and Vestas

RECENT HAPPENINGS IN THE GLOBAL DISTRIBUTED POWER GENERATION MARKET

• In 2021, Schneider Electric announced the launch of a new range of energy storage systems, which can be used in conjunction with DPG systems to provide a more reliable and consistent energy supply.
• In 2021, General Electric (GE) announced the completion of a new 2 MW solar project in Egypt, which is part of the country's efforts to increase its use of renewable energy sources and reduce its carbon emissions.
• In 2022, Vestas announced the development of a new hybrid power plant that combines wind energy with solar photovoltaics and energy storage, providing a more flexible and reliable energy solution.

DETAILED SEGMENTATION OF THE GLOBAL DISTRIBUTED POWER GENERATION MARKET INCLUDED IN THIS REPORT

This research report on the global distributed power generation market has been segmented and sub-segmented based on technology type, end-user type and region

By Technology Type

• Solar photovoltaic
• Wind turbine
• Micro-turbine 
• Fuel cell
• Small-scale hydroelectric generators

By End-User Type

• Residential
• Commercial 
• Industrial

By Region

• North America
• Europe
• Asia-pacific
• Middle East and Africa
• Latin America