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Distributed Generation Market: Snapshot

The global market for distributed generation has gained immense popularity, increased focus from policy-makers, and an increased influx of new vendors in the past few years. The constant rise in demand for clean energy, increased funds being diverted towards the development of renewable energy generation infrastructure, and conducive policies encouraging the adoption of clean energy are all expected to continue to drive the market for distributed generation in the next few years. The constant rise in demand for electricity across residential as well as industrial sectors across developed as well as developing economies, rising costs and stringent regulations limiting the use of power generated from fossil fuels, and focus on the development of power distribution infrastructure in off-grid locations are also expected to drive the market.

According to the report, the global distributed generation market will expand at a promising 8.2% CAGR from 2017 to 2025, rising from a valuation of US$15.03 bn in 2016 to a revenue opportunity of US$35.56 bn by 2025.

distributed generation market

Fuel Cell-based Energy Generation Technology Sees Massive Rise in R&D Activities

The report segments the global distributed generation market based on technology into reciprocating engines, combined heat and power (CHP), solar photovoltics, wind turbines, fuel cells, and micro turbines. The CHP technology features a high quotient of flexibility and can be readily used with other energy production technologies such as micro turbines, reciprocating engines, and fuel cells, thus generating clean energy with an improved efficiency and low carbon emission levels. Thus the technology accounts for a significant share in the global distributed generation market and is likely to continue to hold a large share in the overall market in the next few years.

Despite boasting good energy efficiency levels, technologies such as micro turbines and fuel cells carry the disadvantage of high cost of installation, hindering their scope of adoption in cost-sensitive regional markets to a certain extent. Nevertheless, the vast rise in R&D activities surrounding the fuel cell-based energy generation technology is expected to help the technology account for a notable share in the overall distributed generation technology in the next few years.

Asia Pacific Region Presents Promising Growth Opportunities

Geographically, it is estimated that the market in Asia Pacific exhibits the most promising Y-o-Y investment potential and is expected to observe a steady increment in its share in the global market over the forecast period. The market in Asia Pacific will benefit from the vast rise in installed capacity, rise in stringent environment protection regulations, rising demand for power from residential and industrial users, and increased focus on providing power to off-grid locations.

Increased focus on the development of renewable energy-based power generation through government policies will also enable the positive development of the distributed generation market in the region. China and Japan are presently the key enablers of growth of the regional market, thanks to high installed solar PV capacities and a vast rise in new projects based on solar PV, which is expected to increase the collective renewable power generation capacity of these countries in the near future.

However, the markets in North America and Europe, which are considered well-developed and markets, are likely to witness a decline in their share in the global market over the forecast period. In these regions, the well-established renewable energy infrastructure encouragement from governments in the form of incentives for using renewable power, and strict environment protection norms have worked well in favor of the distributed generation market over the years. Nevertheless, the rising usage and installation of fuel cell-based energy generation systems in North America is expected to lead to new growth opportunities for companies operating in the distributed generation market.

Some of the key players operating in global distributed generation market are Siemens Energy, Doosan Fuel Cell America, Alstom S.A., Ballard Power Systems, Mitsubishi Hitachi Power Systems, Bloom Energy, E.ON. SE, Rolls-Royce Power Systems, Capstone Turbine Corporation, Sharp Corporation, Caterpillar Power Plants, Fuel Cell Energy, OPRA Turbines BV, General Electrical Power, Americas, Inc., and Enercon.

Global Distributed Generation Market: Overview

Distributed energy generation is defined as the power generation at the point of consumption. Distributed generation generates power by utilizing various technologies such as solar photovoltaic, wind turbines, CHP (combined heat and power), reciprocating engines, micro turbines, and fuel cells in order to provide on-site power to consumers. Distributed energy generation systems provide clean power by means of renewable technologies such as solar photovoltaic and wind turbines in combination with energy storage systems in order to provide clean electricity to consumers. Distributed energy generation systems based on renewable energy are proving helpful in providing low cost and clean energy to the population living in bad-grid and off-grid areas. Rising demand for power, recovering economies of developed countries, increasing cost of fossil fuels-generated power, growing emphasis on reduction of carbon emissions, and a lack of power transmission & distribution infrastructure in off-grid areas are key factors that are boosting the demand for distributed energy generation systems across the globe.

Other distributed power generation technologies such as CHP (combined heat and power), reciprocating engines, and micro turbines are utilized to provide back-up support to the main electricity grid. CHP-based distributed energy generation technology utilizes the heat from waste exhaust gases from gas/steam turbines to generate steam from the boilers, which then run secondary steam turbines in order to generate additional power. The distributed energy generation systems market can be segmented based on technology, application, and end-user. The technology segment can be sub-segmented into solar photovoltaic, wing turbines, CHP, reciprocating engines, micro turbines, and fuel cells. CHP technology can be readily employed with reciprocating engines, micro turbines, and fuel cells to generate clean energy with low carbon emissions and also improve the overall electricity generation capacity.

Renewable energy-based distributed energy generation systems of low, medium, and high power generation capacities can generate affordable and low-cost electricity for consumers in off-grid areas. High generation capacity distributed energy generation systems generate grid scale power through solar or wind farms, which can form mini/micro grids in order to distribute low-cost power. Small- and medium-scale distributed energy generation systems can be utilized as roof top solar power generation units to generate independent grid-free electricity for residential or commercial usage. Most distributed energy generation systems are grid connected; however, the off-grid sector is anticipated to provide significant growth opportunities for renewable energy-based distributed energy generation systems in the near future. Distributed energy generation systems produce clean and low-cost power. This generated power is mostly consumed by the industrial sector, followed by residential, commercial, and buildings & institutions sectors. The industrial sector also consumes most of the electricity produced from power plants. Usage of distributed energy generation systems can help provide low cost and clean power to the industrial sector. District heating and cooling services can be provided at cheaper cost, by using CHP and CCHP distributed energy generation technologies. They can also be utilized to provide heating services to the residents, buildings, and institutions during winter time. They can also be employed to provide cooling services during the summer time.

Increasingly stringent environmental regulations regarding air emissions, rising cost of fossil fuels-generated electricity, increasing demand for electricity from off-grid areas, and the high cost of grid transmission and distribution infrastructure in off-grid areas are anticipated to boost the distributed energy generation systems market during the forecast period.

The report estimates and forecasts the distributed generation market on the global and regional levels. The study provides forecast between 2017 and 2025 based on cumulative installed capacity or volume (MW) & Y-o-Y investment potential (US$ Mn) with 2016 as the base year. The report comprises an exhaustive value chain analysis for each of the segments with detailed list of distributed generation technology providers. It provides a comprehensive view of the distributed generation market. The study also provides the utility scale potential customers for distributed generation. The study includes drivers and restraints for the distributed generation market along with their impact on demand during the forecast period. The study also provides key market indicators affecting the growth of the market. The report analyzes opportunities in the distributed generation market on the global and regional level. Drivers, restraints, and key trends mentioned in the report are justified through quantitative and qualitative data. These have been verified through primary and secondary resources. Furthermore, the report analyzes the cumulative installed capacity addition scenario of distributed generation and Y-o-Y investment potential analysis during the forecast period.

The report includes Porter’s Five Forces Model to determine the degree of competition in the distributed generation market. The report comprises a qualitative write-up on market attractiveness analysis, wherein end-users and regions have been analyzed based on attractiveness for each region. Growth rate, market size, impact strength, technology, competition, and other factors (such as environmental and legal) have been evaluated in order to derive the general attractiveness of the market.

Global Distributed Generation Market: Segmentation

The study provides a comprehensive view of the distributed energy generation systems market by segregating it into distributed energy generation by technology, by application, by end-user, and by geography segments. In terms of technology, the distributed energy generation systems market has been segmented into solar photovoltaic, CHP, wind turbine, reciprocating engines, micro turbines, and fuel cells. Based on application, the market has be classified into on-grid and off-grid segments. In terms of end-use, the market has been divided into residential, building & institutions, commercial, and industrial. These segments have been analyzed based on historic, present, and future trends.

Regional segmentation includes the current and forecast consumption of distributed energy generation systems in North America, Latin America, Europe, Asia Pacific, and Middle East & Africa (MEA). Market segmentation includes demand for consumption in all the regions, individually.

Global Distributed Generation Market: Competitive Landscape

The report covers detailed competitive outlook that includes market share, product mapping, and profiles of key players operating in the global distributed generation market. Key players profiled in the report are Alstom S.A., E.ON. SE, Caterpillar Power Plants, Siemens Energy, Doosan Fuel Cell America, Ballard Power Systems, Bloom Energy, General Electrical Power, Sharp Corporation, Enercon, Fuel Cell Energy, Rolls-Royce Power Systems, Mitsubishi Hitachi Power Systems, Americas, Inc., Capstone Turbine Corporation, and OPRA Turbines BV. Company profiles include attributes such as company overview, number of employees, brand overview, business overview, business strategies, recent/key developments, acquisitions, and financial overview (wherever applicable).

The global distributed generation market has been segmented as follows:

Distributed Generation Market – By Technology

  • Solar Photovoltaic
  • CHP
  • Wind Turbine
  • Reciprocating Engines
  • Micro Turbines
  • Fuel Cells

Distributed Generation Market – By Application

  • On-Grid
  • Off-Grid

Distributed Generation Market – By End-user

  • Residential
  • Building & Institutions
  • Commercial
  • Industrial

Distributed Generation Market – By Region

  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Spain
    • Denmark
    • Russia
    • Netherlands
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of Middle East & Africa

Key Takeaways

  • An extensive analysis of the distributed generation market trends and shares from 2016 to 2025 to identify the market opportunities and analyze industry development
  • Technological scenario by region, value chain analysis, and a list of technology providers
  • Country wise analysis for distributed generation market
  • Key customer analysis with respect to the end-users industry
  • A list of key factors responsible for building the upcoming opportunistic roadmap for the distributed generation market at a global, regional, and country level
  • Comprehensive analysis with respect to investments, regulatory scenario, and price trends that impact the outlook of the global distributed generation market between 2016 and 2025
  • The report provides insights into market opportunities for various stakeholders in the value chain and a detailed competition landscape for key players dominating the industry to understand competition level
  • Porters’ Five Forces and SWOT analyses to make profit-oriented business decisions. They analyze the strengths and weaknesses to gain strategic position in the market.
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