Energy Transition Market Size

Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The Energy Transition Market is expected to grow at a significant rate. In 2024, the market size is expected to be worth US$286.87 billion and by 2035, it is expected to reach US$800 billion. This represents a strong CAGR of 9.77% from 2025 to 2035. The trend is clearly upwards, driven by the growing demand for sustainable energy solutions. The transition to renewable energy, combined with developments in energy storage and smart grids, is transforming the energy landscape. The main driving forces are the need to reduce CO2 emissions, the decreasing cost of renewable energy, and growing awareness of climate change. This is good news for the big energy companies such as Siemens, General Electric and Tesla. They are investing heavily in R&D, forming strategic alliances and developing new products to take advantage of this growth. The development of energy storage by Tesla and the investments by Siemens in smart grids are good examples of how these companies are making strategic investments to stay ahead of the game in this rapidly evolving sector.

Regional Market Size

Regional Deep Dive

Energy transition is gaining momentum in many regions, resulting from the worldwide shift towards sustainable energy. This market is characterized by an increasing share of renewable energy, a regulatory support for decarbonization, and a growing emphasis on energy efficiency. Each region has its own dynamic, influenced by local policies, economics, and culture, which in turn creates different opportunities for innovation and growth.

Europe

• The Green Deal aims to make Europe the first climate-neutral continent by 2050 by driving investment in the most sustainable energy sources and in energy-saving technology. Substantial funding for these projects is being made available under the New Deal for Europe.
• Countries like Germany and Denmark are leading the way in offshore wind energy development, with projects such as the North Sea Wind Power Hub expected to generate substantial renewable energy and enhance energy security.

Asia Pacific

• China continues to dominate the global renewable energy market, with the government setting ambitious targets to reach carbon neutrality by 2060, resulting in massive investments in solar and wind energy technologies.
• India's National Solar Mission aims to achieve 100 GW of solar power capacity by 2022, fostering innovation in solar technology and attracting international partnerships to enhance energy transition efforts.

Latin America

• Brazil is leveraging its vast hydropower resources while also investing in wind and solar energy, supported by government policies that promote renewable energy generation and reduce carbon emissions.
• Chile's commitment to generating 70% of its electricity from renewable sources by 2050 has led to significant investments in solar and wind projects, positioning the country as a leader in energy transition in Latin America.

North America

• The Biden administration's goal of reducing greenhouse gas emissions by 50–52 percent by the year 2030 has prompted an increase in the amount of money spent on clean energy projects, including the recently passed Rebuilding America's Security and Prosperity Act, which allots $65 billion for energy-transition projects.
• Major companies like Tesla and NextEra Energy are spearheading advancements in battery storage and solar energy, respectively, contributing to a more resilient and sustainable energy grid.

Middle East And Africa

• The UAE's Masdar initiative is a leading example of renewable energy investment in the Middle East, focusing on solar and wind projects that aim to diversify the energy mix and reduce reliance on fossil fuels.
• South Africa's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has successfully attracted private investment in renewable energy, significantly increasing the share of renewables in the national energy grid.

Did You Know?

“As of 2023, renewable energy sources accounted for nearly 30% of global electricity generation, with solar and wind energy leading the charge in new capacity additions.” — International Energy Agency (IEA)

Segmental Market Size

Energy transition is characterized by a focus on renewable energy sources and on the development of technology aimed at reducing the carbon footprint. It is currently a dynamic growth area, driven by a growing demand for sustainable energy solutions and the introduction of stricter climate protection legislation. The global drive towards zero emissions and the development of energy storage solutions, which make it possible to store electricity from solar and wind power, are particularly important. In this area, the market is currently at the stage of mass production, with notable market leaders such as Tesla in energy storage and rsted in offshore wind power. Europe and North America are in the forefront of introducing large-scale projects. The most important applications include the charging of electric vehicles, smart grids and energy-saving building systems. The accelerating growth is being driven by governmental support programs and the introduction of voluntary sustainability standards in the private sector. Various technological developments, such as the use of the blockchain for energy trading and artificial intelligence for grid management, are shaping the evolution of the market, enabling a more sustainable and efficient energy landscape to be created.

Future Outlook

Energy Transition Market is expected to grow significantly from 2024 to 2035, with a CAGR of 9.77 per cent. It is a result of a global shift towards sustainable energy solutions, driven by an increase in regulations, technological advances and the growing demand for cleaner energy sources. The report also predicts that by 2035, renewables will account for more than half of the world’s energy needs, significantly increasing their penetration in the transportation, industrial and residential sectors. The report also highlights the significant role that technological advances, such as the development of energy storage, smart grids and the growth of electric vehicles, will play in shaping the energy transition landscape. According to the International Energy Agency, the number of electric vehicles on the road could reach 300 million by 2030, which will accelerate the transition to low-carbon energy systems. The report also cites supportive policies and incentives from governments worldwide, aimed at reducing carbon emissions and promoting the uptake of renewables, as a key driver of investment and innovation. Combined with the rise of decentralised energy systems and the integration of artificial intelligence into energy management, the Energy Transition Market is expected to grow further, becoming a key growth driver for the global economy over the next decade.