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The electricity trading market size is forecast to increase by USD 118.4 billion at a CAGR of 6.6% between 2023 and 2028. The market's growth hinges on multiple factors, including heightened vendor collaborations, a growth in cross-border trading, and the expanding adoption of energy storage systems. These dynamics reflect a shift towards more interconnected and efficient energy networks. Vendor collaborations enable the pooling of resources and expertise, fostering innovation and enhancing market offerings. Cross-border trading signifies a broader and more fluid energy market, promoting stability and resource optimization across regions. Concurrently, the adoption of energy storage systems addresses key challenges like intermittency, enabling better integration of renewable sources and bolstering grid resilience. Together, these trends shape a dynamic landscape, driving advancements and opportunities in the semiconductor memory market. The market report forecast market size, historical data spanning from 2018 - 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
The electricity trading market is a significant component of the larger energy market, where electricity is bought and sold as a commodity. This market intersects with traditional financial markets, including equities, bonds, and commodities. The electricity sector's supply relies on various sources, such as power stations and renewable energy. In real-time, the system operator manages the electricity grid's balance, ensuring frequency stability and coordinating generation data from various participants. Ancillary services are provided to maintain the grid's reliability and stability. News reports and power trading activities influence the electricity market's dynamics. Power purchase agreements (PPAs) are essential contracts in the energy market, governing the sale and purchase of electricity between generators and consumers. The European Green Paper and the Lisbon Strategy have focused the importance of market design in the energy industry. Short-term trading in the electricity market is crucial for managing the supply and demand balance, ensuring a stable power grid. Power generation and distribution are integral parts of the electricity trading market, with participants engaging in various transactions to meet their energy needs.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The day-ahead trading segment is estimated to witness significant growth during the forecast period. Day-ahead trading refers to the trading of electric power for the following day, which takes place in exchanges such as the Exchange in Paris, Energy Exchange Austria (EXAA) in Vienna, or in OTC Trading via contracts negotiated bilaterally. The auction market is a less frequent term of reference for the day-ahead trade.
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The day-ahead trading segment accounted for USD 204.20 billion in 2018. Day-ahead trading is voluntary, financially binding forward electricity trading, wherein sellers and buyers trade for a required volume of electric power for the next day. The characteristics of both physical and financial markets are used as a basis for day-ahead trading.
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APAC is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Another region offering significant growth opportunities to companies is Europe, Europe's electricity trading market is a significant global player, with Independent System Operators (ISO) managing the power grid and facilitating trade between power plant dispatch, generators, suppliers, and consumers. The market's growth is driven by increasing electricity demand, the integration of renewable energy sources, and the adoption of derivatives products such as energy futures and forwards. Crypto-asset exchanges, like Binance, have also entered the scene, offering competitive fees, customer support, and advanced trading tools for investors. Trading in the electricity market involves securing power from various sources, including power stations fueled by fossil fuels and renewable energy. Power generators and suppliers engage in contracts based on generation data and market prices, which can be influenced by weather conditions and ancillary services like frequency, voltage, and reserve power. Consumers, in turn, are paid based on their contribution to the electricity system, including the provision of energy storage and timing of consumption. The electricity trading market is a complex system that requires careful management and coordination. ISOs ensure the system operates efficiently and securely, while traders use price charts, trade history, and auto-investments to make informed decisions. The environmental impact of electricity production is also a critical consideration, with a growing focus on reducing carbon emissions and transitioning to cleaner energy sources.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The rise in companies' collaborations is driving growth in the market. Increasing trade volumes for power exchanges, together with an increasing number of collaborations between suppliers in the electricity sector, will drive the global market during the forecast period. Several power exchange companies across the world are collaborating to explore opportunities in the electricity market.
However, increasing trade volumes, owing to high electricity demand, will stimulate the electricity sector. Europex is a non-profit association comprising European energy exchanges. The exchange and commodity market in electricity will, therefore, benefit from increasing trade volumes, along with favorable initiatives, which will propel the growth of the market during the forecast period.
The rise in the entry of new players is the key trend in the market. The electricity trading market is a dynamic segment of the energy industry where participants engage in short-term trading activities, including power purchase agreements (PPAs), to buy and sell electricity. This market caters to the needs of power generation and distribution companies, utility firms, power producers, and power consumers. The energy market is characterized by various components such as power generation, distribution, and balancing groups that work together to ensure the efficient operation of electricity systems. The European Green Paper and the Lisbon Strategy have significantly influenced the electricity market by promoting market liberalization and vertical integration. Power exchanges and stock exchanges serve as crucial platforms for electricity trading, facilitating transactions through short-term spot markets, day-ahead markets, and intraday markets. Market coupling and cross-border intraday trade enable the balancing responsible party to manage forecast deviations and transmission capacity effectively.
Moreover, in the conventional power industry and the renewables industry, power purchase agreements play a vital role in securing transactions between power producers and power consumers. The transaction form can be OTC (over-the-counter) or standardized, depending on the preferences of the parties involved. Power storage solutions, such as virtual power plants and subsidies schemes, help in managing the power delivery timeframe and reference tariff level. The IT system, including the Standard Order Book, Capacity Management Module, and Shipping Module (SM), plays a crucial role in managing the electricity trading market. Portfolio management tools enable participants to optimize their positions and manage risk effectively. Power exchanges provide a secure payment security mechanism, ensuring the financial settlement of transactions. Thus, such trends will shape the growth of the market during the forecast period.
The self-generation of electricity and growth in the adoption of microgrids is a major challenge in an market. The alternatives to electricity trading include microgrids and the generation of power themselves, which have also been increasingly adopted. Several businesses and homes are installing methods to generate their electricity through solar panels and small wind turbines, thus reducing their dependence on electricity companies.
As they provide electricity to remote and rural areas, microgrids have gained importance. The self-generation of electricity is also gaining popularity among customers owing to clean energy and supportive government policies. This will negatively affect the growth of the global market during the market forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Deutsche Borse AG- The company offers Electricity trading services under the subsidiary European Energy Exchange AG.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The electricity trading market is a significant sector that facilitates the buying and selling of electricity between various entities. Markets play a crucial role in this process, enabling effective price discovery and ensuring a balanced electricity supply and demand equation. Electricity generation is a vital component of this market. Various sources, such as coal, natural gas, renewable energy, and nuclear power, contribute to the generation of electricity. Markets facilitate the trading of this electricity based on its production and consumption patterns. Traders play an essential role in this market. They buy electricity from generators and sell it to consumers or other traders. The pricing of electricity is a critical factor in this market, influenced by various factors such as fuel prices, weather conditions, and regulatory policies. The electricity trading market is dynamic and complex, with numerous players and factors at play. It requires a deep understanding of the generation, transmission, and distribution of electricity, as well as the economic and regulatory factors that influence its pricing. Electricity consumers, including industries, commercial establishments, and residential consumers, also play a role in this market. They purchase electricity from traders or directly from generators based on their energy needs and budgets. In conclusion, the electricity trading market is a vital sector that facilitates the buying and selling of electricity. Markets, generation sources, traders, consumers, and various economic and regulatory factors all play a role in this dynamic and complex market.
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Market Scope |
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Report Coverage |
Details |
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Page number |
171 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.6% |
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Market growth 2024-2028 |
USD 118.4 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
6.2 |
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Regional analysis |
Europe, APAC, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 42% |
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Key countries |
US, China, Germany, UK, and Japan |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Axpo Holding AG, BP Plc, Deutsche Borse AG, Energy Trading Co. Sro, Equinor ASA, Euronext N.V., Fortum Oyj, Indian Energy Exchange Ltd., Intercontinental Exchange Inc., Japan Electric Power Exchange, JSW Group, Manikaran Power, Next Kraftwerke GmbH, NTPC Ltd., Power Exchange India Ltd., Statkraft AS, Tata Power Co. Ltd., Vattenfall AB, and VECO Power Trading LLC |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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