Virtual Power Plant Global Market Report 2024

The virtual power plant market size has grown exponentially in recent years. It will grow from $2.35 billion in 2023 to $2.86 billion in 2024 at a compound annual growth rate (CAGR) of 21.9%. The growth during the historic period can be largely attributed to the expansion of renewable energy sources, advancements in energy storage technology, government support and incentives, the initiation of pilot projects and demonstrations, as well as the increasing decentralization of energy systems.

The virtual power plant market size is expected to see exponential growth in the next few years. It will grow to $6.1 billion in 2028 at a compound annual growth rate (CAGR) of 20.8%. The anticipated growth in the forecast period can be linked to several factors such as heightened awareness of climate change, the rising adoption of renewable energy sources, and economic expansion. Notably, major trends expected during this time encompass digitalization and IoT integration, increased partnerships and collaborations, technological advancements, and the continued decentralization of energy systems.

Increasing demand for renewable energy is expected to propel the virtual power plant market going forward. Renewable energy refers to the energy that originates from natural resources that replenish more quickly than they are used up. Virtual power plants (VPPs) can balance the production and consumption of renewable energy, and forecasts can help direct consumer behavior as a form of demand response. For instance, in April 2023, according to a report published by the National Renewable Energy Laboratory (NREL), a US-based research institution dedicated to advancing renewable energy and energy efficiency technologies, global photovoltaic (PV) installations reached 231 gigawatts of direct current (GWdc), totaling 1.2 terawatts of direct current (TWdc) cumulatively in 2022. China's annual PV installations surged by 57%, accounting for 42% of global demand, primarily driven by distributed PV, while annual installations are forecast to exceed 300 GW by 2023 and surpass 400 GW by 2025., Therefore, increasing demand for renewable energy is driving the growth of the virtual power plant market.

The anticipated growth in the Virtual Power Plant (VPP) market is linked to the ongoing digitalization of the energy sector. Digitalization in this context involves integrating digital technologies, data analytics, and automation to enhance energy industry efficiency and sustainability. VPPs play a pivotal role in this transformation by efficiently managing distributed energy resources. Reports from July 2023 by the International Energy Agency (IEA) indicate a significant increase in smart power meter installations worldwide, surpassing 1 billion, with a projected rise in connected devices to 13 billion in 2023 and potentially doubling to over 25 billion by 2030. The expansion of digitalization in the energy sector drives the growth forecast for the Virtual Power Plant market.

Advanced technologies are increasingly adopted in the virtual power plant market. Leading companies, such as AutoGrid Systems in October 2022, are leveraging AI-powered VPP platforms. Their partnership with Mysa introduced utility-scale virtual power plants utilizing smart thermostat technology, optimizing energy markets and enhancing capacity through asset optimization and forecasting.

Leading companies in the virtual power plant domain are directing their efforts towards developing innovative solutions such as battery virtual power plants to address the escalating need for energy efficiency and grid flexibility. SolarEdge Technologies, Inc., an Israel-based smart energy technology company, unveiled its pioneering battery virtual power plant in February 2023. This revolutionary system supports the National Grid ESO Demand Flexibility Service (DFS) in Great Britain. The service caters to a substantial number of SolarEdge Home Battery owners equipped with eligible smart meters across Great Britain. These homeowners can leverage stored battery energy strategically during peak demand events, securing financial incentives and contributing to grid stabilization. Owners with eligible export meters can further optimize gains by exporting excess battery energy back into the grid. SolarEdge's cutting-edge technology ensures seamless optimization of battery charge and discharge, allowing homeowners to minimize grid consumption and earn incentives during demand events.

In October 2021 saw BP PLC, a UK-based multinational oil and gas company, acquiring Blueprint Power for an undisclosed sum. This strategic acquisition enables corporate building owners to monetize excess energy generated on-site, whether through techniques such as solar panels or stored in batteries. Blueprint Power, a US-based company, specializes in transforming commercial buildings into virtual power network plants.

Major companies operating in the virtual power plant market report are Robert Bosch GmbH, Hitachi Ltd., Siemens AG, Engie SA, General Electric Ltd., International Business Machines Corporation, Cisco Systems, Inc., Schneider Electric SE, Honeywell International Inc., Asea Brown Boveri Ltd., AGL Energy Ltd., Generac Holdings Inc., EnerNOC, Inc., Enel X Ltd., Osisoft LLC, Limejump Limited, Open Access Technology International Inc., Shell Plc., Stem, Inc., Blueprint Power Technologies Inc., Next Kraftwerke GmbH, Cpower Energy Management, Autogrid Systems Inc., Enbala Power Networks Inc., Comverge, Blue Pillar, Inc., Olivine Inc., Sunverge Energy, Inc., Flexitricity Limited, Toshiba Energy Systems & Solutions Corporation.

North America was the largest region in the Virtual Power Plant market share in 2023. Middle East is expected to be the fastest-growing region in the forecast period. The regions covered in the virtual power plant market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the virtual power plant market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The key technologies include distribution generation, demand response, and mixed assets. Distribution generation encompasses a range of installations such as wind turbines, solar power plants, small hydro units, and more, along with compatible power generators managed centrally by a single control unit. These sources mainly rely on renewable energy, cogeneration, and energy storage, serving diverse end users such as industrial, commercial, and residential sectors.

The virtual power plant market research report is one of a series of new reports that provides virtual power plant market statistics, including virtual power plant industry global market size, regional shares, competitors with a virtual power plant market share, detailed virtual power plant market segments, market trends and opportunities, and any further data you may need to thrive in the virtual power plant industry. This virtual power plant market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The virtual power plant market consists of revenues earned by entities providing energy management systems, power consumers and storage systems services. The market value includes the value of related goods sold by the service provider or included within the service offering. The virtual power plant market also includes sales of thermal and renewable energy units and wind turbines. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.