Ancillary Services Power Market Size

Global Ancillary Services Power Market Size & Share

The Ancillary services power market industry is projected to grow from USD 9.7 Billion in 2023 to USD 18.2 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 8.20% during the forecast period (2023 - 2032). Ancillary Services Power Market Size was valued at USD 9.00 Billion in 2022. Increased integration of renewable energy and electric vehicles (EV) is the key market drivers enhancing the market growth.

 Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Ancillary Services Power Market Trends

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  Integration of renewable energy is driving the market growth

  
  

The auxiliary services power sector is undergoing significant transformation as a result of the integration of renewable energy sources. The need for auxiliary services has increased as the globe shifts to a low-carbon, more sustainable energy future. In this 550–600 word essay, we'll examine how the incorporation of renewable energy is influencing the ancillary services power industry.

A substantial change in the production and distribution of electricity has been brought about by the rise of renewable energy sources, particularly wind and solar energy. These energy sources are defined by their sporadic nature because they change depending on the time of day and the weather. Although renewable energy is a clean and plentiful supply, grid operators face particular difficulties because of its variability. An essential remedy to deal with these issues is ancillary services.

The requirement for grid stability is one of the main forces behind auxiliary services in the context of renewable energy integration. Renewable energy production cannot be managed in the same manner as conventional fossil-fuel power plants, which can be dispatched and changed quickly to match changes in demand. There is an abrupt decrease in generation when the sun sets or the wind stops blowing, which could result in supply and demand imbalances.

The expansion of renewable energy has raised the demand for the power system's flexibility. Demand response and energy storage are two ancillary services that are essential in delivering this flexibility. Batteries and other energy storage technology can store extra renewable energy when it is plentiful and release it when demand is high or renewable energy production is low. This maximizes the use of renewable resources while also assisting in grid balancing. Demand response systems can ease grid stress during periods of peak renewable generation, minimizing the need for additional conventional power plants. These programs encourage users to modify their electricity usage habits based on grid conditions.

The emergence of competitive electricity markets in numerous places has also significantly fueled the market for auxiliary services. Independent power producers and developers of renewable energy are encouraged to participate in these marketplaces by including auxiliary services in their portfolios. As a result of this competition, grid operators now have access to more effective and economical options, which lowers the overall cost of maintaining grid stability in the face of rising renewable energy penetration. Thus, driving the Ancillary services power market revenue.

Ancillary Services Power Market Segment Insights:

Ancillary services power Type Insights

The Ancillary Services Power Market segmentation, based on type, includes spinning, non-spinning and others. The spinning segment dominated the market in 2022. The demand for spinning reserves is being driven by the increased incorporation of renewable energy sources like wind and solar power into the energy mix. Renewable energy sources, in contrast to traditional power plants, are variable and intermittent, which means that their generation is subject to sharp fluctuations. In order to maintain consistent grid frequency even during unexpected fluctuations in generation, spinning reserves are necessary to make up for sharp declines in renewable energy production.

Ancillary services power Application Insights

The Ancillary Services Power Market segmentation, based on application, includes grid stability, frequency regulation and voltage support. The grid stability category generated the most income in 2022. Power routinely travels across regional, governmental, and even worldwide borders thanks to the contemporary grid's frequent high degree of interconnection. Ancillary services that can manage and stabilize the grid across many locations and systems are more necessary as a result of this complexity. These services make sure that power transfers go smoothly and do not jeopardize the network's overall stability.

Figure 1: Ancillary Services Power Market by Application, 2022 & 2032 (USD Billion)

 Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Ancillary services power Regional Insights

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North America Ancillary Services Power Market dominated this market in 2022 (45.80%). Ancillary services are necessary to regulate the flow of electricity across borders and ensure grid stability as part of the integration of renewable energy from Canadian hydropower into the grid in the northeastern United States (known as the "New England Clean Energy Connect"). The need of synchronized auxiliary services to enable effective power transfers between regions is demonstrated by this cross-border energy commerce. Further, the U.S. Ancillary services power market held the largest market share, and the Canada Ancillary services power market was the fastest growing market in the North America region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Ancillary Services Power Market Share By Region 2022 (USD Billion)

 Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe Ancillary services power market accounts for the second-largest market share. Advanced auxiliary services are needed for cross-border power trade within the European Union. For instance, effective management of power flows across borders is required for the integration of Norwegian hydropower into the European system. This integration is made possible by initiatives like the NordLink interconnector, which also emphasizes the importance of ancillary services in preserving cross-border grid stability. Further, the German Ancillary services power market held the largest market share, and the UK Ancillary services power market was the fastest growing market in the European region.

The Asia-Pacific Ancillary Services Power Market is expected to grow at the fastest CAGR from 2023 to 2032. The economic expansion of China and India fuels a rising need for power. Ancillary services are necessary to support this expansion and keep the grid stable. Large coal and nuclear power facilities are being built, and renewable energy is being integrated, which underlines the variety of energy sources that ancillary services must manage to assure stability. Moreover, China’s Ancillary services power market held the largest market share, and the Indian Ancillary services power market was the fastest growing market in the Asia-Pacific region.

Ancillary services power Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the Ancillary services power market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, Ancillary services power industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global Ancillary services power industry to benefit clients and increase the market sector. In recent years, the Ancillary services power industry has offered some of the most significant advantages to medicine. Major players in the Ancillary services power market, including General Electric Company, Siemens AG, ABB Ltd., Schneider Electric SE, Enel S.p.A., Duke Energy Corporation, Dominion Energy, Inc., NextEra Energy, Inc., EDF Energy, BP plc., Total SE and others, are attempting to increase market demand by investing in research and development operations.

Siemens AG (Siemens) is a technology company. The automation, digitalization, and electrification fields are all covered by its operations. The company designs, develops, and manufactures goods in addition to installing complex projects and systems. Additionally, it provides a range of uniquely created solutions for various demands. Power generation and delivery, intelligent building infrastructure, and distributed energy systems are Siemens' areas of expertise. It provides medical technology, smart mobility solutions, and digital healthcare services for the road and rail transportation sectors. Siemens maintains locations for its manufacturing plants, distribution centers, and sales offices all around the world. It offers clients services in a variety of industries, such as manufacturing, infrastructure, process, and energy. Siemens has its headquarters in Munich, Bavaria, Germany.

In the Southeast and Midwest of the United States, Duke Energy Corp. (Duke Energy), an integrated energy utility, manages the production, transmission, distribution, and sale of electricity, the transportation, and the sale of natural gas, as well as the provision of related energy services. Additionally, it buys and sells electricity and gasoline. The company manages power facilities that utilize coal, nuclear power, natural gas, oil, and renewable energy sources, among other fuels. Duke Energy operates in the US states of Indiana, Florida, Kentucky, Tennessee, North Carolina, Ohio, and South Carolina through legally recognized subsidiaries. It also owns a business that provides power transmission. The Duke Energy corporate office is located in Charlotte, North Carolina, in the United States.

Key Companies in the Ancillary services power market include

• General Electric Company


• Siemens AG


• ABB Ltd.


• Schneider Electric SE


• Enel S.p.A.


• Duke Energy Corporation


• Dominion Energy, Inc.


• NextEra Energy, Inc.


• EDF Energy


• BP p.l.c.


• Total SE

Ancillary services power Industry Developments

January 2023:The NextEra Energy-owned Florida Power & Light Company (FPL) reported a 23% increase in net income year over year, bringing it to US$ 763 Mn. The business's ongoing investment and FPL's robust retail sales in Florida, where it served more than 5.8 million customers, were the main drivers of the expansion.

March 2022:An additional regulation was released by CERC, India's central power sector regulator that broadened the definition of ancillary services and listed large users and energy storage as prospective service providers.

Ancillary Services Power Market Segmentation

Ancillary services power Type Outlook

• Spinning


• Non-spinning


• Others

Ancillary services power Application Outlook

• Grid Stability


• Frequency Regulation


• Voltage Support

Ancillary services power Regional Outlook

• North America
  
  
  
  • U.S.
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America