AI in Energy Market Size, Share and Trends 2024 to 2034

AI in Energy Market Size and Forecast 2024 to 2034

The global AI in energy market size is worth around USD 15.45 billion in 2024 and is anticipated to reach around USD 75.53 billion by 2034, growing at a solid CAGR of 17.20% over the forecast period 2024 to 2034. The rising adoption of AI by energy companies, utilities, and grid operators is the key factor driving the AI in energy market growth over the forecast period.

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.

Asia Pacific AI in Energy Market Size and Growth 2024 to 2034

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.

Asia Pacific dominated the AI in energy market in 2023. This is due to nations like China, India, Japan, and South Korea are likely to offer lucrative opportunities for AI vendors in the region. Moreover, initiatives aimed at reducing carbon footprints and improving energy efficiency have received significant support which can drive market growth in the region further.

North America is expected to show the fastest growth in the market over the projected period. The dominance of the region can be attributed to the increasing adoption of advanced technologies coupled with the robust digital infrastructure in the region. North America, especially the United States, held the leading position in the market. Furthermore, the region’s commitment to overcoming climate change and converting to more sustainable energy sources has fueled the adoption of AI technologies.

• In September 2024, SLB, an American oilfield services company, introduced its Lumi data and AI platform, a cutting-edge solution designed to integrate advanced AI capabilities across the energy sector. Unveiled at the SLB Digital Forum in Monaco, the Lumi platform is aimed at revolutionizing data management and improving decision-making skills.

Market Overview

Artificial intelligence (AI) is playing a crucial role in the energy sector by changing the way energy is created, distributed, and consumed. The utilization of AI technologies in the energy sector is called AI in energy. This has the potential to improve sustainability and efficiency gains, enhancing decision-making processes that can create significant changes in the AI in energy market, which can be seen in their uses like energy distribution systems and smart automated grids.

Global AI Adoption by Region

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.

Market Scope

Market Dynamics

Driver

Rising demand for renewable energy integration

The growing worldwide emphasis on sustainability, as well as the decrease in carbon emissions, is a significant factor driving the AI in energy market. Renewable energy sources like solar and wind are becoming increasingly important in the energy mix. Moreover, AI's ability to forecast energy supply from renewables using historical data and weather conditions enables more effective management of supply and demand. This capability of AI also enhances grid stability and the generation of renewable energy.

• In July 2024, Spanish Prime Minister Pedro Sanchez announced a new plan worth 2.3 billion euros to boost the country's transition to clean energy, including subsidies for green energy industries and hydrogen made from renewable power.

Restraint

Technological complexities

The complexity of integrating AI systems into current energy infrastructure coupled with the high initial investment needed for implementing AI technologies can hamper the AI in energy market growth significantly. Moreover, the complexity of retrofitting legacy systems with AI abilities creates technical anomalies that can constrain the adoption rate of the market.

Opportunity

Developments in IoT and big data analytics

The ongoing developments in big data analytics and IoT (Internet of Things) create lucrative opportunities for the AI in energy market. The expansion of smart sensor technology generates extensive datasets that, after analyzing with AI, can uncover key insights to fuel efficiency. Furthermore, the combination of technologies enables more dynamic and nuanced control of energy systems, opening new doors for innovation in operational efficiency and energy management.

• In December 2023, Schneider Electric and Cisco collaborated to drive AI and IOT innovation in EMEA. Strategic collaboration to lead digital transformation via artificial intelligence (AI) and the Internet of Things (IoT). The MoU targets four primary areas: energy infrastructure, smart buildings, data centers, and industry solutions.

Component Type Insights

The solutions segment dominated the AI in energy market in 2023. The dominance of the segment can be attributed to the increasing need for integrated solutions that use artificial intelligence to improve energy efficiency and optimize power generation. Additionally, solutions in the AI energy field cover machine learning models, advanced analytics, and IoT integration, which stimulate predictive maintenance and renewables management.

The service segment is expected to grow at a lucrative rate in the AI in energy market over the forecast period. This is because AI services support the integration of AI solutions into core processes and business functions. Furthermore, AI can help companies to get more out of their marketing expenditure. Utilizing data services can also address operational efficiencies and energy security.

Deployment Insights

The cloud segment led the AI in energy market in 2023. The growth of the segment can be linked to the increasing flexibility, scalability, and cheapness of cloud services, which are important attributes for energy companies that are navigating the difficulties of digital transformation. Also, the cloud deployment model provides energy firms the agility to install AI solutions rapidly across numerous operations without the requirement for substantial upfront investment in IT infrastructure.

• In August 2024, Vultr, the world’s largest privately held cloud computing platform, announced the launch of its industry cloud solution, which delivers industry-vertical, cutting-edge cloud computing solutions that meet specific industry needs and regulatory requirements across the retail, manufacturing, healthcare, media, telecommunications, and finance sectors.

The on-premise segment is expected to witness significant growth in the AI in energy market during the projected period. The on-premise segment in the AI energy market offers unparalleled customization and one-size-fits-all cloud services solutions. However, AI on-premises provides scalability to fulfill future energy demands and regulatory requirements efficiently.

Application Insights

The safety & security segment dominated the AI in energy market. This dominance is driven by increasing emphasis on protecting the confidentiality and integrity of data utilized in AI models and systems by market players. Furthermore, AI systems can break down complex data into easily framed insights which can help organisations to make critical decisions for the benefit of the company.

The demand forecasting segment is expected to grow rapidly in the AI in energy market during the studied period. The growth of the segment can be credited to the rising need for accurate and efficient energy management tactics within the evolving energy sector. Additionally, there is a growing global shift towards renewable energy methods amidst changing supply and demand.

• In February 2022, Windward, a predictive intelligence company, is partnering with Avni International, an independent tanker operator active in crude oil and petroleum shipment, to use AI in global maritime trade. To optimize its tank operations, the Windwards AI-powered platform will strengthen the company's sanctions compliance programmer, screen vessels, and assess maritime traffic and port congestion.

End-user Insights

The utility segment held the largest share of the AI in energy market in 2023. This is due to utilities playing an important role in combining AI technologies to enhance reliability, efficiency, and sustainability in energy systems. Moreover, the Utilities segment dominates the market because of the rising pressures of climate change coupled with the increasing need for renewable energy sources. AI helps utilities overcome these challenges by optimizing energy flow and offering data-driven insights.

• In September 2024, SmartMeasures, a leading provider of AI-powered customer engagement solutions, announced the launch of its pioneering Debt Reduction solution in the U.S. energy market for retailers and utilities. This groundbreaking technology harnesses the power of artificial intelligence (AI) and behavioral science to predict customer debt risk and proactively engage customers before their debt escalates.

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