Europe Smart Energy Market Outlook, 2029

Spanning diverse landscapes and cultures, the European continent is united by a shared commitment to harnessing the power of technology and collaboration to shape a cleaner, more efficient, and sustainable energy future. With a rich history of energy innovation and a legacy of leadership in renewable energy deployment, Europe is leading the way in the adoption of smart energy solutions that optimise energy generation, distribution, and consumption. From the wind-swept shores of Northern Europe to the sun-drenched Mediterranean coast, smart energy technologies are revolutionising the way energy is produced, managed, and consumed across the continent.

This transformative shift is driven by a convergence of factors, including ambitious climate targets, rapid technological advancements, favorable regulatory frameworks, and growing consumer demand for clean and sustainable energy solutions. A scenario known as Smart Energy Europe has been developed by analysing the previously disclosed Smart Energy System idea within an EU framework. This section presents the outcome of this situation. An alternative 100% renewable energy scenario for Europe, dubbed Smart Energy Europe, is contrasted with the EU28 Ref2050, or business as usual, model for the energy sector in 2050. European countries are investing heavily in smart grid infrastructure to modernise their electricity grids and accommodate the growing share of renewable energy. The European Union is working towards greater integration of energy markets across member states through initiatives such as the European Single Market for Electricity and the European Green Deal.

According to the report “Europe Smart Energy Market Outlook, 2029,”, the Europe Smart Energy market is anticipated to grow with more than 9% CAGR from 2024-2029. Europe is undergoing a significant transition towards renewable energy sources to reduce greenhouse gas emissions and combat climate change. Policies such as the European Green Deal and the Renewable Energy Directive set ambitious targets for renewable energy deployment, driving demand for smart energy solutions that enable the integration of renewable energy into the grid and enhance energy efficiency. For European nations, securing a reliable and secure energy supply is of paramount importance.

Demand response technologies, energy storage systems, and smart grids are examples of smart energy solutions that improve energy security by lowering reliance on imported fossil fuels, increasing grid resilience, and lessening the effects of interruptions and outages. Furthermore, improving energy efficiency is a key focus area for European countries to reduce energy consumption, lower carbon emissions, and achieve sustainability targets. Smart energy technologies such as energy management systems, smart metres, and building automation systems help businesses and consumers optimise energy use, reduce waste, and lower energy bills, driving demand for energy-efficient solutions. Furthermore, advances in technology, including IoT sensors, data analytics, artificial intelligence, and blockchain, have enabled the development of smarter and more efficient energy solutions. These technologies enhance the performance, reliability, and cost-effectiveness of smart energy systems, driving demand for innovative solutions that leverage digitalization and automation. The growth of urbanisation and the development of smart cities create opportunities for innovative energy solutions that improve quality of life, enhance sustainability, and optimise resource use. Smart energy technologies such as smart metres, energy-efficient buildings, and integrated energy management systems support the development of smart cities and drive demand for intelligent energy solutions.

Major Drivers

• Urbanisation and Smart Cities: Urbanisation refers to the increasing population concentration in urban areas, resulting in the growth and expansion of cities. Smart cities leverage technology, data, and innovation to improve quality of life, enhance sustainability, and optimise resource use. In the context of the European smart energy market, urbanisation drives demand for smart energy solutions by creating opportunities to deploy innovative technologies that address the unique energy needs and challenges of urban areas. Smart energy solutions such as smart grids, energy-efficient buildings, intelligent transportation systems, and integrated energy management platforms enable cities to optimise energy consumption, reduce emissions, enhance resilience, and improve overall urban livability.
• Electric Vehicle Adoption: Electric vehicle (EV) adoption refers to the increasing uptake of electric cars, buses, bicycles, and other modes of transportation powered by electricity instead of fossil fuels. In Europe, there is a growing trend towards electric mobility as countries seek to reduce air pollution, greenhouse gas emissions, and dependence on imported oil. The adoption of electric vehicles drives demand for smart energy solutions such as EV charging infrastructure, grid integration, and demand management. Smart charging technologies, vehicle-to-grid (V2G) systems, and intelligent charging networks enable efficient charging, grid balancing, and optimisation of energy resources, facilitating the integration of electric vehicles into the energy ecosystem and supporting the transition to sustainable transportation.

Major Challenges

• Grid Infrastructure and Grid Congestion: Grid infrastructure refers to the physical components of the electricity grid, including transmission lines, substations, transformers, and distribution networks. In the context of the European Smart Energy market, grid infrastructure and congestion pose significant challenges to the integration of renewable energy, smart grids, and distributed energy resources (DERs). Upgrading and modernising the grid infrastructure is essential to address grid congestion and ensure a reliable, resilient, and efficient electricity supply. Investments in grid upgrades, grid-scale energy storage, grid management technologies, and grid optimisation solutions are needed to alleviate congestion, balance supply and demand, and support the integration of renewable energy and smart energy technologies into the grid.
• Consumer Awareness and Engagement: Consumer awareness and engagement refer to the knowledge, understanding, and involvement of consumers in energy-related issues, technologies, and practices. In the context of the European smart energy market, consumer awareness and engagement are critical challenges that can hinder the adoption of smart energy solutions such as energy management systems, smart metres, and demand response programs. Despite the potential benefits of smart energy technologies, many consumers lack awareness of their existence, benefits, and how they can contribute to energy savings, environmental sustainability, and grid reliability. Increasing consumer awareness, education, and engagement through targeted outreach, information campaigns, incentives, and user-friendly interfaces can help overcome these challenges and encourage consumers to adopt smart energy solutions, participate in energy-saving programmes, and make informed choices about their energy use.

Based on product segment, the market includes smart grid, digital oilfield, smart solar, and energy management systems. Among them, the smart grid product segment is expected to dominate the European smart energy market.

Europe has been at the forefront of renewable energy adoption, with significant investments in wind, solar, and other renewable sources. The Smart Grid facilitates the integration of these variable renewable energy sources into the grid by providing real-time monitoring, control, and optimization. This capability is crucial for managing the variability and intermittency of renewable energy generation and ensuring grid stability. The electrical infrastructure in many European nations is out-dated and has to be updated to suit 21st-century needs.

The Smart Grid upgrades the grid infrastructure, increases operational efficiency, and strengthens the grid's resilience against interruptions and outages by introducing cutting-edge technology, including smart metres, sensors, automation, and communication systems. Europe is experiencing a rapid increase in the adoption of electric vehicles (EVs) as part of efforts to reduce air pollution and greenhouse gas emissions. The Smart Grid facilitates the integration of EV charging infrastructure with the grid, enabling intelligent charging strategies, vehicle-to-grid (V2G) capabilities, and load management to optimise EV charging and support grid stability. In order to facilitate the adoption of smart grid technology, European governments and regulatory bodies have put laws and regulations into place. The Smart Grids Task Force and the EU's Clean Energy Package are two examples of initiatives that offer incentives, finance, and direction to speed up the adoption of smart grid technologies and stimulate innovation in the smart energy sector.

Based on the end user segment, the market is majorly categorised into residential, industrial, and commercial. The industrial sector is expected to remain a major end user of smart energy in Europe during the forecast period.

Industrial buildings frequently use a lot of energy, which results in high energy costs. Industrial businesses optimise energy use, spot inefficiencies, and cut down on energy waste with the help of smart energy solutions, including energy management systems, real-time monitoring, and predictive analytics. These actions save money and increase profitability. European industrial sectors are subject to stringent energy efficiency regulations and carbon emission targets set by the European Union. Implementing smart energy technologies helps industrial companies comply with regulatory requirements, meet sustainability goals, and avoid penalties for exceeding emission limits or failing to meet energy efficiency standards.

Furthermore, industrial facilities have the flexibility to participate in demand response programmes, where they can adjust their energy consumption in response to grid conditions or price signals. By reducing energy usage during peak demand periods or shifting production schedules to off-peak hours, industrial companies can earn incentives, reduce electricity costs, and support grid stability and reliability. As well, many industrial sectors in Europe are investing in renewable energy sources, such as solar, wind, and biomass, to reduce their carbon footprint and dependence on fossil fuels. Smart energy technologies, such as onsite renewable energy generation, energy storage systems, and microgrids, enable industrial facilities to integrate renewable energy into their operations, optimise self-consumption, and reduce reliance on the grid.

Based on the report, the major countries covered in the report include Germany, the UK, France, Italy, Spain, Russia, and the rest of Europe.

Germany is leading the smart energy market; Germany has demonstrated a strong commitment to renewable energy and sustainability through its Energiewende (energy transition) policy. The country aims to phase out nuclear power and significantly reduce carbon emissions by increasing the share of renewable energy in its energy mix. Germany's aggressive renewable energy targets and generous feed-in tariffs have spurred massive investments in wind, solar, and biomass energy, making it a leader in renewable energy deployment. Germany has implemented pioneering legislation to support the expansion of renewable energy generation and incentivize investment in clean energy technologies.

The Renewable Energy Sources Act (EEG) guarantees fixed prices for renewable energy producers and provides priority grid access, creating a favourable environment for renewable energy development and driving innovation in the smart energy sector. Furthermore, Germany’s energy system is characterised by a high degree of decentralisation, with a large number of renewable energy installations, energy cooperatives, and community-owned energy projects. The decentralised nature of Germany's energy system creates opportunities for innovation and experimentation with smart energy solutions, such as peer-to-peer energy trading, virtual power plants, and demand response programs. Germany invests heavily in research and development (R&D) initiatives to support its energy transition goals and drive innovation in the smart energy sector. Institutions such as the Fraunhofer Society, the Max Planck Society, and the German Aerospace Centre (DLR) conduct cutting-edge research on renewable energy technologies, grid integration, energy storage, and smart grid solutions, contributing to Germany's leadership in the smart energy market.

Product launches and developments, followed by expansions, mergers and acquisitions, contracts, agreements, partnerships, and collaborations, have been the key business strategies utilized by leading companies to grow their market share. The companies used a variety of tactics to increase market penetration and strengthen their position in the competitive industry. For example, in February 2023, Itron Inc. collaborated with SEW, a well-known provider of cloud-based software solutions for the water and energy industries. The alliance hopes to create new solutions based on Itron's OpenWay Riva IoT system, which includes smart power meters and other smart grid technologies. Furthermore, it would offer utilities with vital information about their customers' energy usage and assist them control their energy consumption.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Smart Energy market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Product

• Smart Grid
• Digital Oilfield
• Smart Solar
• Energy Management System

By End User

• Residential
• Industrial
• Commercial

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Smart Energy industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.


This product will be delivered within 2 business days.