Distributed Energy Resource Management System Market [2031]

Report Description

The Global Distributed Energy Resource Management System Market size was valued at USD 206.39 Million in 2022 and is expected to surpass USD 1033.40 Million by 2031, expanding at a CAGR of 19.6% during the forecast period, 2023–2031.  The market growth is attributed to the increasing demand for distributed energy sources, due to rising industrialization and urbanization across the globe.

A distributed energy resource management system (DERMS) is a platform that helps distribution system operators to manage their grids based on distributed energy resources such as wind turbines, rooftop solar photovoltaic (PV) units, and electrical vehicles (EV) chargers. This system used renewable energy sources for generating power. The system manages, controls, and monitors energy-consuming devices. 

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Distributed energy resource management system generates and stores electricity that can be distributed by a variety of small connected grids. Traditional central power generators such as thermal power plants, nuclear power plants, and hydroelectric dams are centralized, which require electric energy to be transmitted over a long distance.

Distributed energy resources are decentralized and act as the power generation resources that are located close to load centers, which is also known as small-scale power generation or storage technology. It is referred to as a hybrid power station, due to flexible technology, as it is totally dependent on nature for generating power.

COVID-19 Impact on Distributed Energy Resource Management System

The market report finds that the COVID-19 pandemic moderately impacted on the global distributed energy resource management system market. The pandemic hampered the overall revenue generation of the global market. Preventive measures imposed by governments across the globe such as lockdown has disrupted the supply chain of the power industries as many industries have to temporarily shut down their manufacturing facilities.

Moreover, the use of electricity increased in residential buildings, due to the growing adoption of work-from-home, which resulted in increasing demand for energy resources during the COVID-19 pandemic.

Distributed Energy Resource Management System Market Dynamics

The market research report provides a complete overview by providing detailed information and by focusing on growth and historic data to determine the key market trends, major drivers, existing restraints, growing opportunities and potentials, and emerging challenges. The global distributed energy resource management system market report has up-to-date insights about market scenarios that can help in shaping the overall performance and output of the market during the forecast period, 2022 to 2030.

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Major Drivers

• Rising Demand for Energy Using Renewable Sources

Rising demand for renewable energy projects at a rapid pace is a major factor driving the growth of the global distributed energy resource management system market. A positive response towards reducing carbon emissions leads to increased efforts to adopt renewable energy sources. Furthermore, Rapid growth in digitalization along with increasing industrialization and urbanization across the globe demand more power.

• Supportive Government Subsidies

Various government subsidies have encouraged consumers to invest in the generation of distributed energy from rooftop solar PV panels and windmills. Expansion of government schemes and policies offers low-income people to adopt energy at low price than the market rate, which is anticipated to drive the global market during the forecast period.

Existing Restraints

• High Initial Installation Cost

High initial capital is required for setting up a power plant, which hampers the revenue growth of the global market. New emerging technologies in electric power transmission and distribution equipment are quite expensive as compared to the traditional methods. Increasing advanced technologies across the globe needs a high amount of capital to adopt those technologies for setting up the power transmission network system. It restrains the global distributed energy resource management system market growth at a certain limit during the assessment period.

• Increasing Fossil Fuels Cost and Rising Environmental Concern

Fossil fuels such as coal, oil, and natural gas are found in earth’s crust, which need to be found and then extracted. This process requires a lot of time and investment that results in reduction of the fossil fuels supply. Less availability of fossil fuels leads to increasing price at a rapid pace, which hinders the overall revenue generation of the global market. Furthermore, fossil fuels produce a large amount of smoke that increases the risk of global warming.

Increasing awareness regarding the negative effects of fossil fuels on the environment leads to rising environmental concerns among the masses. Growing awareness of the drawbacks of fossil fuels among consumers restrains the growth of the global market in the coming years.

Key Opportunities

• Growth in Investment for Research and Development

Growing investment in researching and developing advanced technologies is a major factor that creates immense growth opportunities for players competing in the market. Various industries growing at a rapid pace highly demand more power at low cost. Market players are focusing on new advanced technologies to reduce the costs of generating power. Industries are increasingly becoming technology-oriented with new innovations, which fuels the global distributed energy resource management system market growth in the coming years.

Scope of Distributed Energy Resource Management System Market Report

The global distributed energy resource management system market research report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

Distributed Energy Resource Management System Market Segments Insight

Virtual Power Plant Segment to Expand at a Significant Growth Rate

Based on software, the global market is divided into analytics, virtual power plant (VPP), and management & control. The virtual power plant segment is expected to expand at a significant growth rate during the projected period, as it has the capability to solve the task of distributed energy. Virtual power plants are a network that generates units and power. It offers power flexibility and high efficiency by controlling feed-in and consumption. Virtual power plants are cloud-based power plants, which have an ability to deliver peak load.

The management & control segment is anticipated to hold a key share of the market in the coming years. Management & control software handles the distribution system of energy sources. It detects failures present in the network and smoothly controls the operation. Increasing demand for reliable power with less electricity loss while transmission leads to accelerate the market growth during the forecast period.

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Solar Photovoltaic Segment to Register a Considerable CAGR

On the basis of technology, the global distributed energy resource management system market is segregated into wind generation units, solar photovoltaic (PV), hydropower, combined heat & power generation systems, and others. The solar PV segment is projected to register a considerable CAGR during the forecast period, due to increasing demand for solar energy generation.

Solar PV converts sunlight into electricity. It reduces electricity bills, as it requires low maintenance costs. It is easy to install rooftop solar PV that offers clean and green energy. Solar panels produce power between 250 to 400 watts per hour. Growing environmental concern across the globe highly demand for renewable energy resources that leads to increasing demand for solar PV.

The wind generation unit segment is expected to account for a major market share in the coming years, owing to the rising demand for cost-effective equipment of renewable power generation. Wind turbines are used in different settings to generate energy that depends on natural air, which reduces the use of fossil fuels. It does not create any emissions that can cause harm to the environment and produce clean energy.

Industrial Segment held a Key Market Share in 2021

Based on end-user, the market is fragmented into residential, industrial, and commercial. The industrial segment held a key market share in 2021 and is anticipated to account for a large revenue share during the projected period, owing to the high amount of energy consumption across various industries. Increasing industrialization across the globe demands for extra electricity, as industrial machinery requires high power for better performance. Growing demand for energy across several industries fuels the growth of the global market.

The residential segment is projected to generate a significant revenue share of the global distributed energy resource management system market. Electricity is the most used power source in the residential sector. Rapid growth in residential buildings requires energy for household purposes such as cooling, heating, and lighting. Growing demand for continuous electricity supply from residential buildings is attributed to driving the market growth of the distributed energy market.

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Energy Storage House Segment to Expand at a Rapid Pace

On the basis of application, the global market is segmented into energy storage houses, EV charging stations, batteries, and others. The energy storage houses segment is attributed to fuel the market in the coming years. Storage houses convert electricity into other forms such as kinetic energy and compressed air, which can be stored and then reconverted into electricity as per the need. The rising use of electricity propels the need to store energy for future usage, due to less availability of fossil fuels drives the growth of the market.

Batteries segment is anticipated to contribute to the segment growth in the coming years, due to the wide use of batteries in electrical appliances. Batteries facilitate the conversion of stored energy into chemical potential energy. It acts as a back-up power supply during power off when no renewable energy resources are available. Batteries can store energy for a long period of time. Increasing demand for electronic devices along with extra power increases the demand for batteries, which leads to the market growth.

Asia Pacific to Dominate the Market

In terms of regions, the global distributed energy resource management system market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific accounted for a large market share in 2021 and is expected to dominate the market during the projected period owing to the rapid expansion of renewable power generation using solar PV and wind turbines. Growing industrialization in the region highly demands for renewable energy sources that fuels the regional market growth.

Europe is the second largest region of the global market which held a key market share in 2021 and is anticipated to expand at a rapid pace during the forecast period. The regional market growth is attributed to rising investment in the project of renewable distributed energy resources for green and clean energy. A large number of solar PV farms and wind facilities in the region leads to create immense growth in the Europe.

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