Our second post illustrates the TAM / CAGR of the electric power market, the market segments of the electric power and grid modernization markets by TAM and CAGR, and the important players in each market segment. Investors can use this information to assess investment opportunities, industry professionals can use this to better understand capital investment opportunities, policy impacts on each segment, and growth potential. Job seekers can use this information to selectively target growing companies in these segments.
The Best Investment Opportunities: Total Addressable Market (TAM) and CAGR (Compound Annual Growth Rate) By Electric / Power / Grid Modernization Market Segment
Opportunity Analysis
The largest opportunities in electrification / power / grid-modernization lie in Grid Re-Architecture (20.5% CAGR), Sensor-based Phasor Measurement and Remote Monitoring (20%), Distributed Energy Resource Management or DERM (18.3%), EES or Electrical Energy Storage (11.2%), and Carbon fiber line replacement (8.8%).
Dwarfing all of these opportunity areas, combined, is Offshore Wind Power Generation, forecast to be an astonishing $140B market by 2036. However, this TAM seems unrealistic given the failure of offshore wind to compete effectively with all other forms of power generation due to substantial capital investment, environmental regulation, and maintenance costs. Additionally, US Presidential candidate Donald Trump has targeted offshore wind as a priority to de-emphasize through his administration's policy. Since the offshore wind segment is largely burgeoned by the US Federal government, it is highly unlikely that this market segment will perform as currently forecast by the DoE because of an increasing likelihood that Trump will win the 2024 US election.
Why the Opportunity Exists
For over 100 years, the entire business model of the electric utility was architected around central power generation by regional monopolies, supported by state and Federal government. This model resulted in a largely centralized grid design with materials available in the 1920s-1940s (copper wire) stringing transmission lines to houses across wide expanses in the rural US, and with mazes of overhead lines crisscrossing in cities.
In the past, electric generation was limited to coal, then coal + hydroelectric power. Over time, nuclear power became a viable source of generation. Thanks to R&D advancements and successful demonstration projects, the early 2000's ushered in an era of viable renewable energy, mainly solar and wind, but also including biofuel and biomass. Since the electric grid is based on a centralized model and one way (Direct Current - DC) power, and legacy technology, the grid needs to adapt to incorporate these new sources, and increase its distribution and transmission capacity.
Firms are leading the way in development of new products, services, materials, and software, much of it AI-enhanced, to meet the energy needs of the next American generation.
Market Players by Segment
Below are the major players in each segment, as well as a list of all companies involved in next generation electric power technologies.
The next part of our series will cover publicly traded players in the industry and why each is uniquely positioned to grow in 2025 and beyond.
To view or download our full investors guide, which provides much more insight, visit: ShadowHornet | An Investor's Guide to Companies and Opportunities in the Electrification/ Power / Grid Modernization sector
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