Distributed Generation is Estimated to Witness High Growth Owing to Opportunity in Reducing Grid Dependency

 

Distributed Generation Market

Distributed generation refers to the use of small-scale power generation technologies located close to the end-users of the power, as opposed to conventional centralized power generation and long-distance bulk transmission. Distributed generation resources allow users to supplement their electrical needs or provide resiliency in case of utility power disruptions and outages. Common distributed generation technologies include solar PV systems, wind turbines, fuel cells, reciprocating engines and microturbines. The global distributed generation market is estimated to be valued at US$ 270.46 Bn in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

 

Market Dynamics:

Increased demand for reliable power supply is one of the key drivers expected to augment the growth of global distributed generation market over the forecast period. Growing reliance on conventional power grids to fulfill energy needs has resulted in negative impacts such as grid failures and power outages, especially in developing countries. Moreover, economic growth and industrialization have further increased the demand for electricity. However, aging transmission and distribution infrastructure in many countries have hindered their ability to ensure reliable power supply. Distributed generation offers an effective solution through location of power sources closer to demand centers, which help improve reliability and resiliency of power supply.

 

Another major driver fueling the market growth is supportive government policies and regulatory schemes related to distributed generation adoption. Many countries and regulatory bodies around the world are offering incentives such as feed-in-tariffs, subsidies, tax incentives and net metering policies to promote distributed renewable technologies. This has made distributed generation competitive compared to conventional power sources. Supportive regulatory frameworks help lower financial barriers for customers and thus encourage greater distributed generation integration within the overall power grid.

 

SWOT Analysis

Strength: Distributed generation provides customers with greater energy independence by relying on multiple smaller generators rather than one large centralized generator. This allows customers more resilience against power outages as they do not rely solely on the main grid. Distributed generation also reduces transmission and distribution losses that occur from transporting power over long distances. Environmental benefits as distributed energy resources tend to be cleaner sources such as solar PV, wind turbines, fuel cells etc.

 

Weakness: Initial installation costs of distributed generation systems tend to be higher than relying solely on centralized power. Maintenance and upgrading costs over the system lifetime also need to be considered. Integration of distributed generators with the main grid can pose technical challenges to ensure stability and power quality is maintained. Dependence on variable renewable energy sources like solar and wind pose the risk of unreliable power supply when resources are not available.

 

Opportunity: Growing customer preference for clean and renewable sources of energy provides opportunities for distributed solar PV and wind power companies. Increasing focus on energy efficiency and carbon reduction targets set by governments opens up prospects for fuel cell and combined heat and power distributed generation. Remote and off-grid applications that lack transmission infrastructure can utilize distributed generation to meet demand. Emerging technologies like energy storage provides synergistic opportunities when paired with distributed renewable energy resources.

 

Threats: Declining costs and subsidies for centralized utility-scale renewable energy projects increase competition for distributed generation projects. Stricter interconnection standards and regulations imposed by utilities can increase compliance requirements. Emergence of microgrids and virtual power plants threatens traditional business models of distributed generation system owners and integrators.

 

Key Takeaways

The Global Distributed Generation Market Size is expected to witness high growth over the forecast period supported by favorable government policies and initiatives to promote cleaner sources of energy production and reduce carbon emissions. North America currently dominates the market owing to supportive renewable energy policies and aggressive carbon reduction targets set by countries like the US and Canada. The Asia Pacific region is expected to emerge as the fastest growing regional market for distributed generation led by increasing investments in renewable energy especially solar and wind power projects in countries like China, Japan and India.

 

Regional analysis

The Asia Pacific region accounts for over 35% of the global distributed generation market share currently led by countries like China, Japan and India. China has been investing heavily in renewable energy capacity additions through distributed solar rooftop projects as part of its ambitious carbon neutrality goals. India too has ambitious solar targets under its National Solar Mission to install 100GW of solar capacity by 2022, a large portion of which is expected to come from distributed generation sources. Advances in energy storage technology coupled with falling battery costs is also driving higher adoption of solar+storage distributed systems across the region.

 

Key players

Key players operating in the distributed generation market are Doosan Heavy Industries & Construction, Toyota Turbine and Systems Inc., Ballard Power Systems Inc., Mitsubishi Electric Corp., Suzlon Energy Ltd., Vestas Wind Systems A/S, Rolls-Royce Plc, Capstone Turbine Corp., Sharp Corp., and General Electric.


Get More Insights Here

https://www.newswirestats.com/distributed-generation-market-size-share-growth-outlook-2023/

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