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