The Asia Pacific AI in energy market size was exhibited at USD 5.40 billion in 2023 and is projected to be worth around USD 30.92 billion by 2034, poised to grow at a CAGR of 17.40% from 2024 to 2034.

According to Precedence Research report, the global AI in energy market size was USD 13.18 billion in 2023, calculated at USD 15.45 billion in 2024 and is expected to reach around USD 75.53 billion by 2033, expanding at a CAGR of 17.20% from 2024 to 2034.

In recent years, Artificial Intelligence (AI) has gained relevance in a wide variety of sectors. However, defining the term poses some difficulties. Central to Artificial Intelligence is that it makes and implements decisions based on data (information) independently with regard to the set goals. The term artificial distinguishes AI from the "natural intelligence" attributed to humans and animals. Narrower definitions see AI as a branch of computer science that deals with machine learning and the automation of intelligent behavior. Still, the definition of intelligence remains vague and excludes other areas of research, such as robotics or linguistics.

AI in Energy Market Growth Factors

• Advancements in energy storage and management are expected to drive the AI in energy market growth soon.


• Rising applications of AI in safety and security and infrastructure can propel market growth.


• Many organizations are increasingly utilizing AI to optimize different operations, which is likely to further contribute to market expansion.


• AI can improve grid reliability and accelerate the transition to a sustainable energy future that can fuel market growth further.


• Rapid modernization of energy in developing nations can boost the AI in energy market growth shortly.

AI in Energy Market Key Takeaways

• Asia Pacific dominated the AI in energy market in 2023.


• North America is expected to show the fastest growth in the market over the projected period.


• By component type, the solutions segment dominated the market in 2023.


• By component type, the service segment is expected to grow at a lucrative rate in the market over the forecast period.


• By deployment type, the cloud segment led the market in 2023.


• By deployment type, the on-premise segment is expected to witness significant growth in the market during the projected period.


• By application, in 2023, the safety & security segment dominated the market.


• By application, the demand forecasting segment is expected to grow rapidly in the market during the studied period.


• By end-user, the utility segment held the largest share of the market in 2023.

Drivers, Opportunities & Restraints

A primary driver is the increasing integration of AI technologies with smart grids, which improves load forecasting, demand response, and predictive maintenance, thereby enhancing grid reliability and reducing operational costs. The need to modernize aging infrastructure and accommodate the growing share of renewable energy sources also propels market expansion, as AI helps manage the intermittency of renewables like solar and wind.

The global market presents numerous opportunities driven by technological advancements and increasing demand for efficiency and sustainability. With the proliferation of IoT devices and big data analytics, energy companies can harness vast datasets to optimize operations, enhance predictive maintenance, and improve energy management systems.

A significant challenge is the high initial investment required for adopting AI technologies, which can be prohibitive for many energy companies, especially those operating in regions with limited financial resources. The complexity of integrating AI systems into existing infrastructure also poses difficulties; many energy systems are built on outdated technologies that require substantial upgrades to accommodate AI solutions.

Artificial Intelligence (AI) in the Energy Industry

Artificial Intelligence becomes more and more important in the energy industry and is having great potential for the future design of the energy system. Typical areas of application are electricity trading, smart grids, or the sector coupling of electricity, heat and transport. Prerequisites for an increased use of AI in the energy system are the digitalization of the energy sector and a correspondingly large set of data that is evaluable. AI helps make the energy industry more efficient and secure by analyzing and evaluating the data volumes.

Artificial Intelligence in the Power Grid - Smart Grids and Sector Coupling

In particular, AI is present in the field of intelligent networking of electricity consumers and generators across sector boundaries. With the increasing decentralization and digitalization of the power grid, it is becoming more difficult to manage the large number of grid participants and keep the grid in balance. This requires evaluating and analyzing a flood of data. Artificial Intelligence helps process this data as quickly and efficiently as possible.

Smart grids are another area of application. These networks transport not only electricity but also data. Especially with an increasing number of volatile power generation plants such as solar and wind, it is becoming more and more important for power generation to react intelligently to consumption (and vice versa). AI can help evaluate, analyze, and control the data of the various participants (consumers, producers, storage facilities) connected to each other via the grid.

A particular focus of AI in the energy industry is on the integration of electro mobility. An increase in e-cars offers opportunities and challenges. The charging of electric cars must be coordinated, but at the same time, they offer the possibility of storing electricity and stabilizing the grid, for example by adjusting the charging demand to price signals and availability. AI can help with all this by monitoring and coordinating.

In addition, the AI can stabilize the power grid by, for example, detecting anomalies in generation, consumption, or transmission in near real time, and then develop suitable solutions. Initial research projects in this field, such as at the Fraunhofer Institute, are already underway.

Further, AI can help coordinate maintenance work and determine optimal times for the maintenance of networks or individual systems. This helps minimize costs and loss of profit as well as disturbances of the network operation.

Artificial Intelligence in Electricity Trading

Artificial Intelligence in power trading helps improve forecasts. With AI, it is simpler to evaluate systematically the large amount of data in electricity trading, such as weather data or historical data. Better forecasts also increase grid stability and thus supply security. Especially in the field of forecasts, AI can help facilitate and speed up the integration of renewables . Machine Learning and Neural Networks play an important role in improving forecasts in the energy industry.

Developments in forecasting quality in recent years have shown the potential of AI in this area: There is already a reduction in the demand for control reserve, even though the share of volatile power generators in the market has increased.

AI In Energy Market Regional Insights

North America AI in energy market is driven by significant technological advancements and a strong focus on renewable energy integration. Major utility companies are investing in AI technologies to optimize energy distribution, improve outage response times, and facilitate the transition to cleaner energy sources. Additionally, government initiatives aimed at promoting sustainability and reducing carbon emissions further encourage the adoption of AI-driven solutions.

U.S. AI In Energy Market Trends

The AI in energy market in the U.S. is primarily fueled by the increasing demand for efficiency, sustainability, and advanced technological integration. As the energy sector shifts toward renewable sources, AI plays a crucial role in optimizing energy generation and distribution, particularly in managing the variability of renewable energy supply.

Asia Pacific AI In Energy Market Trends

The AI in energy market in Asia Pacific accounted for the largest revenue share of over 40.92% in 2023. The Asia Pacific region is at the forefront of integrating Artificial Intelligence (AI) solutions within the energy market, driven by a combination of rapid industrialization, urbanization, and a pressing need for sustainable energy management. Countries such as China and India are leading this transformation, leveraging AI to optimize renewable energy generation, enhance grid management, and improve predictive maintenance.

China AI in energy market is propelled by several key factors, including the government's commitment to advancing renewable energy and achieving carbon neutrality. The integration of AI with emerging technologies such as big data analytics and the Internet of Things enhances operational efficiency and enables smarter energy management, particularly in optimizing power grid investments. National policies, like the New Generation Artificial Intelligence Development Plan, support the development of AI across various sectors, including energy, fostering innovation and investment.

The AI in energy market in Japan is growing as government initiatives aimed at reducing carbon emissions and promoting smart city developments further foster the adoption of AI in the energy sector. Additionally, Japan's focus on integrating advanced technologies, such as IoT and big data analytics, enables real-time monitoring and decision-making, which are essential for managing the complexities of modern energy systems. This proactive approach not only supports Japan's transition to a low-carbon economy but also positions it as a leader in the development and implementation of innovative AI-driven energy solutions.

Europe AI In Energy Market Trends

The AI in energy market in Europe is largely influenced by a strong commitment to sustainability and stringent regulatory frameworks aimed at reducing carbon emissions. European countries are actively adopting AI technologies to enhance energy efficiency and facilitate the integration of renewable energy sources into their grids. Government initiatives and policies promoting clean energy are significant motivators for investment in AI-driven solutions, enabling utilities to optimize operations, improve grid flexibility, and manage demand more effectively.

Germany AI in energy market is characterized by a strong focus on sustainability and innovation through the integration of Artificial Intelligence (AI) solutions. The country is leveraging AI to enhance various aspects of its energy system, including predictive maintenance, operational optimization, and real-time demand forecasting, which are crucial for managing the increasing share of renewable energy sources.

The AI in energy market in the UK is driven by several key factors, including the urgent need for sustainability and the transition to renewable energy sources. As the UK aims to reduce carbon emissions and achieve net-zero targets, AI technologies are increasingly being adopted to optimize energy generation, enhance grid management, and improve demand forecasting.

Central & South America AI In Energy Market Trends

The AI in energy market in Central and South America is gaining momentum, driven by the region's commitment to renewable energy integration and grid modernization. Countries like Brazil and Argentina are leveraging AI to optimize the generation and distribution of clean energy sources, such as solar and wind power. AI-powered predictive maintenance and demand forecasting tools are enhancing operational efficiency and reliability across energy infrastructures.

Middle East & Africa AI In Energy Market Trends

The energy market in the Middle East and Africa is increasingly adopting Artificial Intelligence (AI) solutions, driven by the need for improved efficiency, sustainability, and enhanced operational capabilities. In the Middle East, countries are leveraging AI to optimize the production and management of renewable energy sources, particularly solar and wind, while also enhancing traditional oil and gas operations through predictive maintenance and real-time data analytics.

 

AI in Energy Market Companies

• Schneider Electric


• Siemens AG


• Hazama Ando Corporation


• General Electric


• AppOrchid Inc


• Alpiq AG


• ABB Group


• ATOS SE


• Zen Robotics Ltd


• SmartCloud Inc.

Recent Developments

• In February 2023, ABB Group Announced a strategic partnership with Microsoft. to focus on AI-powered industrial automation solutions, which have applications in the energy sector.


• In February 2023, General Electric mentioned GE's continued focus on AI for predictive maintenance in the energy sector in industry publications.


• In January 2023, AVEVA, a global leader in industrial software, announced the completion of its acquisition by Schneider Electric. This move signifies Schneider Electric's continued expansion and investment in digital transformation solutions, particularly those enhancing AI capabilities within the energy sector.


• In June 2022, AIQ, a joint venture of Adnoc and Group 42, and Abu Dhabi's Hub71 are collaborating to research new artificial intelligence solutions for the Fuel industry. Hub71 and AIQ will collaborate as part of the agreement to advance the development of advanced digital technologies to maximize the value of Fuel operations and contribute to the energy sector's sustainability.

Segments Covered in the Report

By Component Type

• Solutions


• Services

By Application

• Robotics


• Renewables Management


• Demand Forecasting


• Safety and Security


• Infrastructure


• Others

By End-user

• Energy Transmission


• Energy Generation


• Energy Distribution


• Utilities

By Deployment

• On-premises


• Cloud

By Geography

• North America


• Asia Pacific


• Europe


• Latin America


• Middle East & Africa

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