Global AI in Energy Management Market 2024-2031

Global AI in Energy Management Market 2024-2031

AI in Energy Management Market Size, Share & Trends Analysis Report by Component (Software, and Services), by Deployment (On-Premises, and Cloud-Based), by Solution (Renewable Management, Demand Management, and Infrastructure Management), and by Application (Energy Generation, Energy Transmission, Energy Distribution, and Energy Output Forecasting), Forecast Period (2024-2031)

Artificial intelligence (AI) in energy management market is anticipated to grow at a significant CAGR of 16.3% during the forecast period (2024-2031). AI optimizes the storage and distribution of energy from renewable sources. By considering various factors such as demand, supply, price, and grid conditions, AI algorithms determine the best times to store energy, when to release it, and how much to distribute. According to the International Energy Agency (IEA), in November 2023, AI was an increasingly critical resource. A recent estimate suggests that AI already serves more than 50 different uses in the energy system and that the market for the technology in the sector could be worth up to $13.0 billion.

Market Dynamics

AI-powered Optimization for Renewable Energy Integration

The utilization of modern AI models, assimilation of novel technologies such as blockchain and IoT, enhancement of decentralized energy systems, and augmented global collaboration for inventive resolutions are aiding the global market growth. As renewable energy sources are erratic and intermittent, integrating them into the grid poses special issues. Instances of these include solar and wind power. AI's ability to forecast renewable energy generation based on past data and weather forecasts can be crucial to maximizing this integration. This makes it possible to implement dynamic grid management techniques and energy storage technologies, guaranteeing a more dependable and effective energy mix.

Market Segmentation

Based on the component, the market is segmented into software and services.

Based on the deployment, the market is segmented into on-premises and cloud.

Based on the solution, the market is segmented into renewable management, demand management, and infrastructure management.

Based on the application, the market is segmented into energy generation, energy transmission, energy distribution, and energy output forecasting.

Software is Projected to Hold the Largest Segment

The software segment is expected to hold the largest share of the market. The high adoption of AI in energy management software for greater energy efficiency, high control of energy consumption, and proper energy demand forecast is a key factor driving the growth of this market segment. AI enables utilities and energy suppliers to streamline processes, cut expenses, and quicken the shift to sustainable energy sources. For instance, in February 2024, Enverus announced it added Instant Analyst technology to its market-leading product portfolio. The Instant Analyst technology helps customers across the energy industry quickly find exactly the energy industry insights and operational efficiencies.

Regional Outlook

Global AI in energy management market is further segmented based on geography including North America (the US, and Canada), Europe (the UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America).

Growing Demand for AI in Energy Management in Asia-Pacific

The regional growth is attributed to pivotal factors such as the increasing improved energy efficiency in data centers’ cooling systems, and the growing adoption of AI in data center operations and management in countries such as Indonesia, Vietnam, Philippines, Cambodia, Singapore, and Malaysia.

According to the ASEAN Centre for Energy, in April 2024, Data centers are vital for this interconnectivity to exist. The need for data centers in ASEAN markets will continue to grow, with expected revenue at $13.0 billion in 2028 from $9.6 billion in 2023. These data centers have become an integral part of an economy’s infrastructure, used by private and public sectors.

North America Holds Major Market Share

The market growth is attributed to the active integration of Al to integrate energy produced from both non-renewable and renewable sources into the overall energy supply. The government in the region is investing heavily in the deployment of advanced technology to efficiently manage energy management workflows across an organization. For instance, in April 2024, the US Government announced the allocation of over $30.0 million to capitalize on the tremendous opportunity to transition to a clean energy economy. The Department of the Interior-Bureau of Ocean Energy Management (DOI-BOEM) - InfoSys for renewable energy program $4.4 million. The federal agencies incorporate new technologies into permitting processes, from artificial intelligence and GIS mapping to online applicant portals and innovative data-sharing systems with the management of complex work streams and improve data quality for better coordination, analysis, and decision-making.

Market Players Outlook

The major companies serving the AI in energy management market include Google LLC, IBM Corp., Microsoft Corp., NVIDIA Corp., and Siemens AG among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market.

Recent Development

In February 2024, Salesforce, Inc. introduced clean energy program management for the energy & utilities cloud. This new solution streamlines the launch, management, and oversight of energy efficiency, conservation, electrification, and EV charging programs to help electric, gas, and water utilities increase customer participation in clean energy programs. It also creates better customer experiences and enhances employee productivity with AI to improve profitability for customers with CRM, AI, and data.

In February 2023, Tata Power and AutoGrid expanded AI-enabled smart energy management, supporting India’s net zero goals. The new demand response management program aims to engage 55,000 residential consumers and 6,000 large C&I customers to achieve 75 MW of peak capacity reduction, within the first six months, and then continue to scale up to 200 MW by the summer of 2025.