Growth Opportunities in Distributed Energy, Forecast to 2030

Growth Opportunities in Distributed Energy, Forecast to 2030

Nearly $1 Trillion is Expected to be Invested Over the Course of the Decade as the Power Sector Continues to Transition to a More Decarbonised and Flexible System

RELEASE DATE
05-May-2020
REGION
Global
Research Code: MF1A-01-00-00-00
SKU: EG02075-GL-MR_24375

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Description

Investments into distributed energy resources (DER) technologies reached $53.14 billion in 2019. Total capacity commissioned was 51.04 GW, meaning the total global installed capacity for DER increased by 10% in the year to 528.93 GW. Strong growth is expected for the global market across the decade as a whole. About $846.12 billion is forecast to be invested in new DER capacity over the next decade (2020–2030). The investment will be driven by a combination of favourable regulations, declining project and technology costs, high electricity and demand charges, availability of funding, and new financing models that offset initial investment barriers. Solar PV will dominate global investment throughout the decade, accounting for 88.2% of the funding. Of this, residential solar PV will account for 49.3% of the total investments, and commercial and industrial (C&I) solar PV the remaining 38.9%. By the end of the next decade, Asia will account for approximately 48% of the total investment, followed by North America (approximately 17.5% share) and Europe (approximately 16%). Total distributed generation (DG) installed capacity is projected to reach 1182.00 GW by 2030, accounting for 10% of the global installed power generation in the year.

The DER model will play an increasingly pivotal role in the global power mix, as part of a wider drive to decarbonise the sector. Frost & Sullivan firmly believes that participants in the power generation market must consider the impact of DER and should adapt accordingly.

Behind-the-meter energy storage is set to become a game changer for DER as it enhances its value proposition and enables revenue stacking. The cost of the energy storage system is forecast to decline by 35% over the course of the decade, making it an increasingly attractive proposition. New solar PV customers will opt for a solar + storage system as standard and existing customers will increasingly look to add a storage system to their existing solar PV DER units.

Prosumers will continue to invest in DER projects to mitigate energy cost uncertainty, and avoid increases in demand charges. They will also increasingly benefit from selling electricity back to the grid and from participating in the wholesale electricity, capacity and ancillary service markets.

The transition from a pure pay-and-purchase model to operation and output based OPEX contracts that include maintenance, performance guarantees, and availability of the installed equipment will increasingly be preferred by residential and C&I consumers.

Security of supply will become a key factor for investing in DERs, as major climate incidents increase. DERs that can operate in microgrid mode will bring increased resiliency to local grids.

Author: Maria Benintende

RESEARCH: INFOGRAPHIC

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Table of Contents

Key Findings

Top Predictions for the Decade Ahead

Impact of COVID-19

DER and its Role in the Internet of Energy

Key Growth Opportunities for Market Participants

Key Regional Growth Opportunities

Global Distributed Energy—Annual Capacity Installation Forecast

Global Distributed Energy—Annual Investment Forecast

Global Distributed Energy Forecast

Research Scope

Market Definitions

Geographic Segmentation

Key DER Market Trends

Storage as a Key Enabler for Renewable DERs

DER Aggregation—New Revenue Streams from the Provision of Grid Services

Blockchain will Bring Flexibility to DER Transactions

XaaS is Shaping and Driving the Deployment of DERs

Growth in Microgrids

Energy Supply and Demand Services

Market Drivers

Drivers Explained

Drivers Explained (continued)

Market Restraints

Restraints Explained

Restraints Explained (continued)

Technology Analysis—Overview

Technology Analysis—Distributed Solar PV

Distributed Solar PV Installed Capacity Forecast—The Decade Ahead

Distributed Solar PV Investment Forecast—The Decade Ahead

Technology Analysis—Diesel Gensets

Diesel Gensets Installed Capacity Forecast—The Decade Ahead

Diesel Gensets Investment Forecast—The Decade Ahead

Technology Analysis—Gas Gensets

Gas Gensets Installed Capacity Forecast—The Decade Ahead

Gas Gensets Investment Forecast—The Decade Ahead

Technology Analysis—Industrial Turbines (<30MW)

Industrial Turbines Installed Capacity Forecast—The Decade Ahead

Industrial Turbines Investment Forecast—The Decade Ahead

Technology Analysis—Distributed Wind

Distributed Wind Installed Capacity Forecast—The Decade Ahead

Distributed Wind Investment Forecast—The Decade Ahead

Technology Analysis—Small Hydro Power

Small Hydro Installed Capacity Forecast—The Decade Ahead

Small Hydro Investment Forecast—The Decade Ahead

Regional Analysis—DER Investment Growth

North America—Regional Overview

North America—Capex by Technology

North America—Annual Capacity Additions by Technology

North America—Country Highlights

Europe—Regional Overview

Europe—Capex by Technology

Europe—Annual Capacity Additions by Technology

Europe—Country Highlights

Asia—Regional Overview

Asia—Capex by Technology

Asia—Annual Capacity Additions by Technology

Asia—Country Highlights

Latin America—Regional Overview

Latin America—Capex by Technology

Latin America—Annual Capacity Additions by Technology

Latin America—Country Highlights

Africa and Middle East—Regional Overview

Africa and Middle East—Capex by Technology

Africa and Middle East—Annual Capacity Additions by Technology

Africa and Middle East—Country Highlights

DER Market Ecosystem

DER Market Participants and Strategic Focus—Traditional Energy Participants

DER Market Participants and Strategic Focus—Newer Participants

Key Growth Opportunities for Market Participants

Growth Opportunity 1—Risk-Gain Share Models and M&A: New Opportunities for Technology OEMs

Companies to Action—Case Study

Companies to Action—Case Study (continued)

Growth Opportunity 2—Expanding Current Solution Offering: New Opportunities for System Integrators & Installers

Companies to Action—Case Study

Companies to Action—Case Study (continued)

Growth Opportunity 3—Consumer to Prosumer: New Opportunities for End Users

Companies to Action—Case Study

Growth Opportunity 4—Market Entry to DER: New Opportunities for Utilities

Companies to Action—Case Study

Growth Opportunity 5—Expanding Solution Offering: New Opportunities for ESCOs

Companies to Action—Case Study

Strategic Imperatives for Distributed Energy

Key Conclusions

Legal Disclaimer

List of Exhibits

List of Exhibits (continued)

List of Exhibits (continued)

List of Exhibits (continued)

The Frost & Sullivan Story

Value Proposition—Future of Your Company & Career

Global Perspective

Industry Convergence

360º Research Perspective

Implementation Excellence

Our Blue Ocean Strategy