Power Generation Market Overview
Power Generation Market reached US$ 1.67 billion in 2024 and is expected to reach US$ 2.30 billion by 2032, growing with a CAGR of 4.1% during the forecast period 2025-2032.
In contemporary economies, electricity is a fundamental resource that is increasingly contributing to the provision of energy services. Rising household incomes, the electrification of transportation and heating and the growing need for digitally connected devices and air conditioning are all factors that are expected to drive up electricity demand.
According to the World Energy Outlook, the global electricity consumption is projected to grow at a pace of 2.1% per year until 2040, which is twice the rate of primary energy demand in the Stated Policies Scenario. In addition, the electrification of key end-use sectors is projected to increase power demand by double by 2050. Moreover, it is estimated that renewable energy production would constitute over 50% of the whole electricity generation after 2035.
New wind and solar PV projects developed over the past year have contributed to a nearly 3% increase in renewable electricity generation. Renewables are typically deployed before conventional sources of electricity. Furthermore, as technology continues to progress quickly, numerous countries, corporations and regions are adopting sustainable energy production, leading to a swift transformation of the industry. Numerous breakthroughs have been made in power generation technologies.
Power Generation Market Trend
The power generation market is undergoing a structural shift, with renewable energy, particularly solar photovoltaic (PV), emerging as a dominant force. In 2024, clean energy sources accounted for over 80% of the global increase in electricity generation, led by solar PV, which contributed approximately 480 TWh. This growth is fueled by declining costs, policy incentives and strong investor interest, positioning solar as a cost-competitive and scalable solution for meeting global electricity demand and net-zero goals.
In the US, utility-scale solar is projected to grow by 34% in 2025 and an additional 18% in 2026, driven by favorable federal policies such as the Inflation Reduction Act and rising corporate demand for clean energy. Integration with battery storage and grid modernization efforts are enhancing reliability and accelerating adoption. These dynamics reflect a broader market trend toward low-carbon generation portfolios and sustained renewable infrastructure investment.
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Market Scope
Metrics | Details |
By Source | Non-Renewable and Renewable |
By Grid | Off-Grid and On-Grid |
By End-User | Industrial, Commercial, Residential and Transportation |
By Region | North America, Europe, Asia-Pacific, South America and Middle East & Africa |
Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth |
Power Generation Market Dynamics
Growing Infrastructure Development and Sustainable Energy Initiatives
The electricity generation industry has seen significant demand driven by several factors, including the growing population and the subsequent rise in the number of users resulting from rapid urbanization. Expected future growth in the share of energy services is projected to drive up the demand for power. Economic development of a country is facilitated by the expansion of its electricity infrastructure components. It contributes to the general well-being of a nation.
Accelerating the development of the current power infrastructure and establishing new power infrastructure is crucial for the economic expansion. Sustainable methods are increasingly being adopted to enable the provision of cost-effective electricity in several countries worldwide, particularly in developing nations. Increased investments in power generation have been observed in both industrialized and developing countries worldwide and this trend is anticipated to have a substantial impact on market expansion.
The successive shutdowns of fossil-fueled power plants, the growing presence of wind, solar, small hydro and other renewable power generation sources, the increasing demand for electric vehicles and heat pumps and the growing export needs through interconnectors have led to a higher need for the installation of Transmission and Distributions (T&D) lines. This has created several prospects for the major companies.
Outdated Infrastructure and Investment Stagnation
The current generating equipment and system primarily depend on outdated infrastructure, which greatly challenges their ability to satisfy the increasing advanced electricity demand. Developing countries are particularly afflicted by infrastructure aging issues, since the replacement of existing infrastructure necessitates substantial investment, so posing a prominent obstacle to the market.
The stagnation in investment in the power industries poses the most significant obstacle to market expansion. The investment in the coal-fired plant has already decreased by 11%, while the investment in gas-fired production is being impacted by delays in developed economies abundant in natural gas.
Power Generation Market Segment Analysis
The global power generation market is segmented based on source, grid, end-user and region.
Non-Renewable Sources Dominated the Market
Several significant reasons largely contributed to the non-renewable sector capturing the largest proportion. Above all, the current infrastructure for non-renewable energy sources, including coal, natural gas and oil, is comprehensive and well-established. Coal thermal power stations are the predominant type of thermal power plant and are projected to become the dominant contributor to the global electricity supply by 2025.
Advanced technologies such as Ultra Supercritical Coal Technology, which significantly decrease pollutants per kilowatt, are expected to supplant outdated power plants. According to the Energy Institute Statistical Review of World Energy 2023, a coal-fired thermal power plant accounted for the majority of absolute world power production in 2022. On a global scale, coal continued to be the primary fuel for power production in 2022, with its proportion rising to 35.37% from 35.1% in 2020. By 2022, the total electricity generated from coal had reached 10317.2 terawatt-hours.
For decades, these conventional energy sources have served as the fundamental support for worldwide power production, ensuring a dependable and steady influx of energy. Their advanced technological capabilities and cost-effectiveness make them the preferred option for many areas, particularly if the process of shifting to renewable energy remains financially or logistically difficult.
Power Generation Market Geographical Share
The Power Generation Market in Asia Pacific Is Estimated to Account for the Largest Share
Asia-Pacific holds over 50% of the world's population and 60% of the major urban centers. In the next years, this continent will experience a surge in power consumption due to the rapid population increase and urbanization, which will result in millions of new consumers having access to energy. Specifically, the Energy Institute Statistical Review of World Energy 2023 reports that the main energy consumption in the region rose from 220.48 exajoules in 2013 to 277.60 exajoules in 2022.
In order to provide power to these regions, the involved countries are making substantial investments in the construction of a transmission line network. China exerts significant control over the power market in the region and the energy industry is undergoing a shift towards cleaner and sustainable energy sources with the aim of mitigating carbon emissions and attaining net-zero carbon emissions by 2060.
Furthermore, China has the largest installed renewable capacity in the world. The National Energy Administration of China reported that the country's renewable installed capacity reached 1,213 GW by the end of 2022, representing around 47.3% of the overall installed generation capacity. Specifically, in 2022, the Chinese government declared its intention to construct 450 gigawatts of solar and wind generating facilities in the Gobi Desert areas in order to meet the renewable energy goal by 2030.
India ranks as the third-highest energy-consuming country worldwide, as reported by the International Energy Agency (IEA). It is attributed to the increasing income levels and progressing living standards, which directly contribute to the growth of the power market in the country. In the next years, a significant number of Indian families will purchase new appliances and air-conditioners, driving the demand for power generation systems.
Sustainability Analysis
The global power generation market is shifting toward sustainability as the urgency to reduce carbon emissions and fossil fuel dependency intensifies. Renewable energy sources such as wind, hydropower, biomass and solar are at the forefront of this transformation. These technologies offer scalable, low-emission alternatives that align with global decarbonization goals. Supportive government policies, declining technology costs and rising ESG-focused investments are accelerating their adoption across utility and industrial sectors.
Decentralized solutions, including rooftop solar and mobile solar generators, are driving growth in on-site sustainable power generation. These innovations enhance energy accessibility, reduce grid strain and support energy independence for businesses and households. Emerging technologies such as geothermal power, hydrogen storage and smart energy systems are also gaining traction, expanding the scope for clean energy diversification. As this transition advances, market players investing in sustainable innovation and grid modernization are poised for long-term growth.
Power Generation Market Major Players
The major global players in the market include State Grid Corporation of China, Engie SA, Electricité de France S.A., Iberdrola, S.A., National Thermal Power Corporation Limited, NTPC Ltd, ExxonMobil, Chevron Corporation, ABB Ltd, Inc., AES Corporation and Huaneng Power International, Inc.
Key Developments
In April 2025, West Bengal launched a significant power sector initiative with the foundation of a 1,600 MW ultra-supercritical thermal power plant in Salboni by JSW Energy, backed by a US$ 1.92 billion (₹16,000) crore investment. The project, comprising two 800 MW units, is expected to enhance the state's energy infrastructure, with phased commissioning over the next 42 to 48 months. This development reflects a strategic commitment to industrial expansion and long-term energy security.
In June 2024, Wärtsilä introduced the world’s first large-scale 100% hydrogen-ready engine power plant, enabling flexible, zero-carbon power generation. Built on the efficient Wärtsilä 31 platform and TÜV SÜD certified, the engine operates on natural gas today with full conversion to hydrogen possible, supporting the transition to renewable energy. Available for order in 2025 and delivery from 2026, this innovation advances the path to net-zero power systems.
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Target Audience 2024
Manufacturers/ Buyers
Industry Investors/Investment Bankers
Research Professionals
Emerging Companies
