Rising Renewable Adoption Powers $5.6 Trillion Energy Transition Market by 2031

Energy Transition Market to Reach $5.6 Trillion by 2031, Growing at 9.3% CAGR

WILMINGTON, DE, UNITED STATES, October 13, 2025 /EINPresswire.com/ -- The Energy Transition Market is undergoing a massive transformation as the global focus shifts from fossil fuels to renewable energy sources, driven by the urgent need to reduce carbon emissions and promote sustainable energy production. According to a recent report published by Allied Market Research, the global energy transition market size was valued at $2.3 trillion in 2021 and is projected to reach $5.6 trillion by 2031, registering a robust CAGR of 9.3% from 2022 to 2031.

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🔋 What is Energy Transition?

The term energy transition refers to the global movement from conventional fossil fuel-based energy sources, such as coal, oil, and natural gas, towards cleaner, renewable energy solutions. This transition helps decrease greenhouse gas emissions, curtail environmental degradation, and ensures a sustainable and efficient energy system for the future. The key sectors driving the energy transition include renewable energy, bioenergy, electrification, energy efficiency, hydrogen technologies, and others.

☀️ Renewable Energy Leads Investment

Among the various segments, renewable energy emerged as the largest sector in the energy transition market in 2021, attracting global investment of $366 billion. Solar and wind energy are at the forefront of this transformation. For instance, in the Netherlands alone, solar energy capacity grew by 1,500 MW in 2018, reaching a total of 4,400 MW, with residential rooftop solar systems contributing significantly.

The offshore wind energy sector is expanding rapidly due to its high-capacity factor and significant potential for large-scale deployment. Innovations such as larger turbines, taller towers, and longer cables are improving the efficiency of wind farms, making offshore wind a viable solution in the energy transition. Leading oil and gas companies are increasingly investing in offshore wind projects, reorienting towards a low-carbon, sustainable energy industry.

🚗 Electrification Gains Traction

The electrified transport sector is the fastest-growing part of the energy transition market, with investment reaching $273 billion in 2021 — a remarkable 77% increase from the previous year. Electrification of vehicles not only helps reduce air pollution but also supports the decarbonization of the transportation sector. The market for electric vehicles, electric charging infrastructure, and related technologies is expected to expand significantly over the coming decade.

⚡ Bioenergy and Hydrogen: Emerging Frontiers

Bioenergy and hydrogen also play critical roles in the energy transition market. Hydrogen, in particular, is gaining attention for its potential in energy storage and as a fuel for industrial applications and transportation. With increasing research, innovations, and strategic partnerships, these segments are poised for rapid growth in the near future.

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🏠 Market Segmentation: Type, Application, and Region

By Type:

The energy transition market includes segments such as renewable energy (wind, solar, hydropower), bioenergy, electrification, energy efficiency, hydrogen technologies, and others.

By Application:

The market applications are classified into residential, commercial, and utility-scale systems. The utility segment is expected to grow at the fastest pace, with a CAGR of 9.6% during 2021–2031, due to strong demand for large-scale renewable power generation facilities and grid modernization efforts.

By Region:

The Asia-Pacific region dominated the global energy transition market in 2021, accounting for more than 48.7% of the total revenue share. Countries such as China, India, Japan, and South Korea are investing heavily in renewable energy infrastructure, smart grids, and electric mobility solutions. North America and Europe follow, contributing significantly to the market growth with aggressive renewable policies and established green energy frameworks.

🏢 Key Industry Players

The report identifies major companies leading the energy transition movement, including Exelon Corporation, Duke Energy Corporation, Pacific Gas and Electric Company, Southern Company, American Electric Power, Edison International, Repsol, Brookfield Renewable Partners, Ørsted A/S, and NextEra Energy, Inc. These industry giants are deploying innovative strategies such as expanding production capacities, acquiring technology providers, forming strategic partnerships, and investing heavily in solar and wind energy applications.

⚠️ COVID-19 Impact

The COVID-19 pandemic posed challenges for the energy transition market due to reduced investments in 2020, supply chain disruptions, and a temporary slowdown in the expansion of clean energy technologies. However, the residential and utility sectors saw a strong surge in electricity demand during lockdowns, supporting the market to some extent. Post-2021, as economic activities resumed and governments ramped up green stimulus programs, the energy transition market rebounded.

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🔮 Future Outlook

The Energy Transition Market is set for sustained growth, fueled by government regulations promoting clean energy, technological innovations, and an increasing global shift toward decarbonization. As renewable energy and electrified transport sectors expand, investments in energy storage solutions and hydrogen technologies will accelerate, driving the market towards its projected $5.6 trillion value by 2031.

The push for a sustainable future, reduction of greenhouse gas emissions, and global net-zero targets are strong growth drivers. With continuous technological advancements and increasing public and private sector commitment, the energy transition market is poised to reshape the global energy landscape in the coming years.

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About Us

Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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Allied Market Research
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