Global power generation markets

In the September 2026 issue of ISMR, we outline market trends, forecasts and drivers in global power generation markets. The impacts of energy price volatility continue to be felt today with manufacturers once again facing rising costs amid the current energy crisis.

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According to analyst, Grand View Research, the global power generation market size was valued at US$ 2,386.6 billion in 2025 and is projected to grow from US$ 2,574.5 billion in 2026 to US$ 4,451.3 billion by 2033, at a CAGR of 8.1% from 2026 to 2033. 

The power generation market refers to the global revenue generated from the production of electricity through various energy sources including fossil fuels, nuclear energy and renewable sources such as solar, wind and hydropower. They are supported by advanced generation technologies, grid infrastructure and energy management systems.

The fossil fuel segment held the largest market share of 58.6% in 2025, said the analyst, while the Asia Pacific region took the largest share of 49.9% of the global market in 2025. The solar segment is projected to register the fastest CAGR of 17% during the forecast period, supported by the accelerating global transition towards clean and renewable energy sources. The market is experiencing steady growth as governments and utilities increasingly prioritise energy security, grid reliability and sustainable electricity supply to meet rising global demand.

The International Energy Agency (IEA) has reported that the market for key energy technologies – solar PV; wind; batteries; electric vehicles; heat pumps; electrolysers – surpassed US$ 1.1 trillion in 2025, after sustaining average annual growth of around 20% over the past decade. This expansion occurred despite continued price declines for many technologies. During the period 2023-2025 alone, solar PV module prices fell by around 50% and battery pack prices by around 30%, it confirmed.

Electricity in focus

“Global electricity demand is forecast to increase at a brisk average annual rate of 3.6% over the 2026-2030 forecast period, supported by rising consumption from industry, electric vehicles, air conditioning and data centres. Worldwide electricity demand grew by 3% year-on-year in 2025. This followed growth of 4.4% in 2024, when intense heat waves and strong industrial activity in many regions boosted electricity use. Looking ahead, annual demand growth over the next five years is set to be 50% higher on average, compared to the average across the previous decade,” highlighted the IEA.

“Rising global electricity consumption driven by urbanisation, industrialisation and digital transformation is accelerating investments in new power generation capacity. Countries are expanding their generation mix through the integration of renewable energy sources such as solar, wind and hydropower, alongside conventional sources such as coal, natural gas and nuclear energy. Ageing power infrastructure in several regions is further driving modernisation efforts, including the deployment of smart grids, distributed energy resources and advanced energy storage systems to enhance grid stability and ensure uninterrupted power supply across developed and emerging economies,” added Grand View Research.

Energy price volatility

Energy often represents a major operating expense for SMEs and larger firms. Price increases and market volatility can hit manufacturers hard, especially SMEs. 

“In 2022, when Russia’s full-scale invasion of Ukraine led to sharply higher fuel costs, 8% of SMEs in the European Union reported that declines in productivity and revenue threatened their survival. In the same survey, many SMEs reported absorbing rising energy costs by accepting lower profits (58%) or raising consumer prices (52%). These pressures can ripple through employment, supply chains, local economies and household purchasing power worldwide,” outlined the IEA.

The impacts of energy price volatility continue to be felt today, with manufacturers once again facing rising costs amid the current energy crisis. This is particularly challenging for businesses that already operate on thin profit margins.

To read the rest of this article in the September 2026 issue of ISMR, see https://joom.ag/Ozfd/p20