AI in Energy Global Market Opportunities and Strategies to 2033

This report describes and explains the AI in energy market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global AI in energy market reached a value of nearly $15.9 billion in 2023, having grown at a compound annual growth rate (CAGR) of 15.4% since 2018. The market is expected to grow from $15.9 billion in 2023 to $41.8 million in 2028 at a rate of 21.3%. The market is then expected to grow at a CAGR of 20.2% from 2028 and reach $104.7 billion in 2033.

Growth in the historic period resulted from the strong economic growth, rising electricity generation, increasing adoption of microgrids rising deployment of smart meters. Factors that negatively affected growth in the historic period were rising security concerns in the energy sector.

Going forward, the increasing demand for solar energy systems, rising residential building construction, increasing demand for renewable energy, increasing investments in the energy sector will drive the growth. Factor that could hinder the growth of the AI in energy market in the future include loss of jobs due to automation.

The AI in energy market is segmented by offering into support services, hardware, AI-as-a-service and software. The software market was the largest segment of the AI in energy market segmented by offering, accounting for 39.9% or $6.3 billion of the total in 2023. Going forward, the AI-As-A-Service segment is expected to be the fastest growing segment in the AI in energy market segmented by offering, at a CAGR of 25.8% during 2023-2028.

The AI in energy market is segmented by application into demand response management, fleet and asset management, renewable energy management, precision drilling, safety and security, infrastructure management and other applications. The demand response management market was the largest segment of the AI in energy market segmented by application, accounting for 28.3% or $4.5 billion of the total in 2023. Going forward, the renewable energy management segment is expected to be the fastest growing segment in the AI in energy market segmented by application, at a CAGR of 25.6% during 2023-2028.

The AI in energy market is segmented by end-user into energy transmission, energy generation, energy distribution, utilities and other end users. The utilities market was the largest segment of the AI in energy market segmented by end-user, accounting for 37.8% or $6 billion of the total in 2023. Going forward, the energy transmission segment is expected to be the fastest growing segment in the AI in energy market segmented by end-user, at a CAGR of 25.5% during 2023-2028.

The AI in energy market is segmented by deployment mode into cloud and on-premise. The cloud market was the largest segment of the AI in energy market segmented by deployment mode, accounting for 58.6% or $9.3 billion of the total in 2023. Going forward, the cloud segment is expected to be the fastest growing segment in the AI in energy market segmented by deployment mode, at a CAGR of 22.9% during 2023-2028.

North America was the largest region in the AI in energy market, accounting for 40.8% or $6.5 billion of the total in 2023. It was followed by Asia Pacific, Western Europe and then the other regions. Going forward, the fastest-growing regions in the AI in energy market will be Asia Pacific and South America where growth will be at CAGRs of 23.2% and 22.2% respectively. These will be followed by Eastern Europe and Western Europe where the markets are expected to grow at CAGRs of 21.2% and 20.6% respectively.

The global AI in energy market is fairly fragmented, with a large number of players operating in the market. The top ten competitors in the market made up to 22.9% of the total market in 2022. The market concentration can be attributed to the presence of large number of players in different geographies. Prominent players are acquiring the products and entering into partnerships with the other companies to consolidate their market positions across the globe, while others are distributing products. Microsoft Corporation was the largest competitor with a 5.1% share of the market, followed by Amazon.com, Inc. with 4.6%, Oracle Corporation with 3.2%, Schneider Electric SE with 2.2%, Alphabet Inc. with 2%, Siemens AG with 1.4%, Alpiq Holding Ltd with 1.3%, NVIDIA Corporation with 1.2%, ABB Ltd with 1% and Atos SE with 0.9%.

The top opportunities in the AI in energy market segmented by application will arise in the demand response management segment, which will gain $12.1 billion of global annual sales by 2028. The top opportunities in the AI in energy market segmented by offering will arise in the software segment, which will gain $14.4 billion of global annual sales by 2028. The top opportunities in the AI in energy market segmented by end-user will arise in the utilities segment, which will gain $15 billion of global annual sales by 2028. The top opportunities in the AI in energy market segmented by deployment mode will arise in the utilities segment, which will gain $16.8 billion of global annual sales by 2028. The AI in energy market size will gain the most in USA at $13.9 billion.

Market-trend-based strategies for the AI in energy market include innovation in ai energy management systems to address specific market needs, introduction of generative ai assistants using gpt-3.5 technology, development of ai-powered home assessment tools, innovative ai-based software solutions to monitor and optimize energy, strategic partnerships approach to bolster energy solutions.

Player-adopted strategies in the AI In energy market include focus on strategic partnerships to develop its business expertise, focus on enhancing its business operations through new product developments, focus on acquisitions to develop its business expertise, focus on strengthening its business capabilities through strategic partnerships.

To take advantage of the opportunities, the analyst recommends the AI in energy companies to focus on AI-powered energy management systems, focus on GPT-3 powered generative AI assistants, focus on AI-powered home energy assessment tools, focus on AI-based software solutions for industrial sustainability, expand in emerging markets, continue to focus on developed markets, focus on strategic partnerships for energy innovation, provide competitively priced offerings, continue to use B2B promotions, focus on renewable energy and demand response management application segment and focus on energy transmission and energy generation end-user segment.