Energy Transition Market: Global Industry Analysis and Forecast (2023-2029)

The Global Energy Transition Market size was valued at $2.63 Trillion in 2022 and the total Energy Transition Market revenue is expected to grow at a CAGR of 9.4% from 2023 to 2029, reaching nearly $4.94 Trillion.
Energy Transition Market Overview
The global energy transition is shifting towards renewable energy sources which are often referred to as clean energy such as lithium-ion batteries, and solar as well as wind, and away from fossil-based energy production systems like natural gas, oil, and coal. Industries are responding to the energy transition to renewable energy sources from fossil-based systems of energy consumption and production as industries and more investors have opportunities globally. The transition from non-renewable energy sources to renewable energy is enabled by a societal push and technological developments toward sustainability. The energy transition, fueled by long-term changes in demand, structure, energy supply, and prices, also tries to reduce power-related emissions of greenhouse gases. These aspects are expected to drive the energy transition market scope.

Furthermore, the rising penetration of renewable energy in the supply of energy, electrification, and advancement in the storage of energy are all key drivers of the energy transition market. Commitment and regulation towards decarbonization have been diversified, but the transition of energy is to continue to increase in prominence as financiers prioritize, social, environmental, and governance (ESG) factors. The use of energy transition for residential purpose lowers the carbon footprint and save power. The surge in the growth of solar energy and the development of solar farms in evolving nations are expected to generate electricity prominently and is expected to offer more opportunities for global energy transition market growth during the forecast period. Solar and wind costs have decreased so drastically that wind power is now more economical than conventional high-carbon energy supplies in several parts of the US, as well as the UK and Europe. The energy transition market size is to be developed and solidify as a significant investment opportunity as costs continue to decrease and wind and solar become more mainstream during the forecast period.

For instance, in Jan 2023, as the Earth continues to overheat at an alarming rate, the UN Environment Programme (UNEP)-led Cool Coalition announced the creation of a Global Cooling Pledge and a "Cool COP Menu of Actions" that will be prominently featured at COP28. They developed in partnership with partners such as the International Renewable Energy Agency (IRENA) and Sustainable Energy for All (SEforALL) during the following months.

Some of the energy transition market key players are Exelon Corporation, Pacific Gas and Electric Company, Southern Company, American Electric Power, Edison International, Repsol, Brookfield Renewable Partners, Plug Power Inc., Enphase, First Solar, Sunpower, Enel, Ørsted A/S, and NextEra Energy, Inc.To know about the Research Methodology :- Request Free Sample Report
Energy Transition Market Scope and research methodology:
The energy transition market report provides a comprehensive analysis of the global market in the energy transition industry. It covers various aspects such as type, application, and region. It also covers growth drivers, upcoming challenges, trends, opportunities, risks, and entry barriers. The research methodology involves analyzing product-type literature, industry releases, annual reports, and other relevant documents of key industry participants. The report highlights industry players’ focus on technological advancements to establish dominance in the global energy transition market. Key players are also strengthening their market positions. Overall, the report aims to offer valuable insights and an in-depth analysis of the energy transition market to assist stakeholders in making informed decisions and understanding market dynamics.
Energy Transition Market Dynamics:
Advancement in Technology and Public Policy Drives the Demand for Energy Transition Market

The transition to innovative energy sources is driven by demand, supply, technological advancements, and public policy. With rising demand driven by population expansion and higher living standards, energy has driven the evolution of society — from pre-agricultural foraging to fossil fuel-powered megacities. The energy sector has begun to change in positive ways, with broad acceptance of renewables and allied technologies pointing to a bright future. Renewable energy is sweeping the global energy transition market for new power generation capacity.

However, this energy transformation involves additional acceleration and is not only optimism for the power sector, but also for the end-use sectors of industry, buildings, and transportation. The advancement of renewable energy-producing technology opens up prospects to use clean energy as a driver for decarbonizing end-use sectors are expected to propel the energy transition market driver.

For instance, In Nov 2022, Appalachian Power added a third solar project to its Virginia energy portfolio, gained clearance for 209 MW of wind and solar facilities, and published RFPs for over 1,500 MW of wind, solar, and battery storage.

The High Cost of Installation Restraints the Market Growth

High installation costs, as well as the loss of natural resources, are acting as market limitations for the energy transition market throughout the projection period. Growing levels of global warming and a rapid increase in population are expected to be the most significant challenges to the growth of the energy transition market during the forecast period. The development of dispatchable renewables is important to integrating additional wind and solar, although its growth is expected to delay slightly. Hydropower, bioenergy, geothermal, and concentrated solar power expansion account for only 11% of global renewable capacity expansion over the projected timeframe. Flexible and dispatchable renewables hampered energy transition market share due to their relatively higher costs, lack of regulatory support, and limited payment.

Regulatory Measures and Government Push to Create Sustainable Measures across the World to Foster the Growth of the Energy Transition Market

The level of commitment to the energy transition is greater than ever at the start of 2022, with around 21% of the world's largest 2,000 corporations now committed to net zero targets through energy transitions. While authorities continue to be expected to lead on net zero targets, businesses are also increasingly taking the lead in implementing decarbonization routes. The energy transformation could lead to job creation in communities throughout the world. One notable example is in the US, where building an offshore wind sector is seen as a priority not only for its contribution to climate change mitigation but also because it has the potential to employ 44,000 people by 2030. According to experts, solar, Wind, and energy storage, might help decarbonize up to 90% of electricity output. Many of the survey's conclusions align with conventional wisdom, such as the notion that electrification will be critical to economy-wide decarbonization. In addition, technological innovation and an increase and government investment in R&D are expected to boost the energy transition market opportunity in the forecast period.

For instance, in Feb 2022, Southwestern Electric Power Company (SWEPCO) was seeking permission from authorities in Arkansas, Louisiana, and Texas for three clean energy projects totaling 999 megawatts (MW). The projects involve a $2.2 billion investment in environmentally friendly, cost-effective resources.
Energy Transition Market Segment Analysis:
Based on type: The energy transition market is segmented into renewable energy, energy efficiency, electrification, hydrogen, and others. The renewable energy segment dominated the energy transition market in 2022 and is expected to continue to dominate during the forecast period. Renewable energy is derived from natural sources such as sunlight and wind. Hydropower solar, wind, geothermal, bioenergy, and ocean power are some of the key sources of renewable energy. Several factors contribute to the increased use of renewable energy, the most prominent of which is the attribution of global warming to carbon dioxide (CO2) emissions from the combustion of fossil fuels.

At present, renewable energy is used in the electricity, heating, cooling, and transport sectors. It collectively provides around 7% of the energy demand globally. Renewable energy is comparatively more expensive than fossil fuel. Governments in both emerging and wealthy countries have prioritized the promotion of renewable energy sources due to increased output efficiency, less pollution, and cheap maintenance costs. All of these factors combine to increase demand for renewable energy, hence boosting global energy transition market growth.
Based on Application: Energy transition market is segmented into residential, commercial, and utility scale. The residential segment dominated the energy transition market in 2022 and is expected to continue to dominate during the forecast period. Several factors are associated with the increasing demand for residential in the market, such as the rise in demand for electric water heaters from water heating applications such as space heating, bathing, cleaning, cooking, and others, which is expected to drive the growth of the energy transition during the forecast period.
Transforming Generation Fleet:
According to American Electric Power Company to compete with carbon-free baseload replacement technology, wind and solar must be combined with storage and to achieve net-zero energy by 2032.
Energy Transition Market Regional Insights
The Asia Pacific region consumes more than half of the world's renewable energy. The region's growing industry and urbanization have increased pollution levels. Furthermore, a significant expansion in the population in that region and an increase in residential construction are driving up the electricity demand.

The renewable energy industry is expanding rapidly in emerging economies such as China and India, owing to increased industrialization and strong economic growth. Government initiatives are important to the agreement of renewable energy across a wide range of end-user applications. Several governments are pushing for higher renewables to lower greenhouse gas emissions and promote energy transition, creating a more favorable atmosphere for the growth of the renewable business. When it comes to following through on commitments connected to RE100 the global corporate renewable energy project, unites a huge number of ambitious businesses dedicated to using only renewable energy and science-based targets, renewable electricity procurement at the corporate level is essential in addition to Net Zero targets at the national level. The demand for Renewable Energy sources and energy-efficient systems in the Asia-Pacific region is driven by stringent emission rules and regulations, the development of energy transition, and supporting government policies are to be important drivers of the Asia-Pacific energy transition market over the next five years.
Competitive Landscape
Key Players of the energy transition market profiled in the report include Exelon Corporation, Duke Energy Corporation, Pacific Gas and Electric Company, Southern Company, American Electric Power, Edison International, Repsol, Brookfield Renewable Partners, Plug Power Inc., Enphase, First Solar, Sunpower, Enel, Ørsted A/S, and NextEra Energy, Inc
These Key manufacturers have a prevalent existence worldwide. This provides huge opportunities to serve many end-user & customers and expand the energy transition market.

Technological advancement, partnership, and acquisition are the common strategies used by major market players for the expansion of business.

For instance, in Jan 2023, Pacific Gas and Electric Company (PG&E), a subsidiary of PG&E Corporation and Energy Vault Holdings, Inc. which is a leader in sustainable grid-scale energy storage solutions, announced the companies are collaborating to operate and deploy a utility-scale battery plus green hydrogen long-duration energy storage system (BH-ESS) with a 293 megawatt-hours (MWh) minimum of dispatchable carbon-free energy.

For instance, in June 2023, Irish state-owned utility ESB and leading offshore wind developer Ørsted A/S formed a partnership that delivers green hydrogen projects up to 5 GW of offshore wind energy in Ireland.
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Energy Transition Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2017 to 2022
Market Size in 2022:
US $ 2.63 Trillion.


Forecast Period 2023 to 2029 CAGR:
9.4%
Market Size in 2029:
US $ 4.94 Trillion.


 Segments Covered:
by Type
1. Renewable Energy
1.1. Wind Power
1.2. Solar Power
1.3. Bioenergy
1.4. Hydropower
2. Energy Efficiency
3. Electrification
4. Hydrogen
5. Others


by Application
1. Residential
2. Commercial
3. Utility Scale



Energy Transition Market Regional Insights:
North America (United States, Canada, and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria, and the Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, Bangladesh, Pakistan, and the Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria, and the Rest of ME&A)
South America (Brazil, Argentina, and the Rest of South America)
Energy Transition Market Key Players:
1. Exelon Corporation
2. Duke Energy Corporation
3. Pacific Gas and Electric Company
4. Southern Company
5. American Electric Power
6. Edison International
7. Repsol
8. Brookfield Renewable Partners
9. Plug Power Inc.
10. Enphase
11. First Solar
12. Sunpower
13. Enel
14. Ørsted A/S
15. NextEra Energy, Inc

FAQs:

1. What are the growth drivers for the energy transition market?
Ans. An increase in the penetration of renewable energy in developing markets is expected to be the major driver for the energy transition market.

2. What is the major restraint for the energy transition market growth?
Ans. High installation costs are expected to be the major restraining factor for the market growth.

3. Which region is expected to lead the global energy transition market during the forecast period?
Ans. Asia-Pacific is expected to lead the global market during the forecast period.

4. What is the projected market size & growth rate of the energy transition market?
Ans. The energy transition market size was valued at USD 2.63 trillion in 2022 and the total market revenue is expected to grow at a CAGR of 9.3% from 2022 to 2029, reaching nearly USD 4.94 trillion.

5. What segments are covered in the energy transition market report?
Ans. The segments covered in the market report are type, application, and Region.