The global distributed energy resource management system market is characterized by the presence of many local, regional, and global vendors. The market is highly competitive, with all the players continually competing to gain a larger market share. High competition, rapid advances in technology, frequent changes in government policies, and stringent environmental regulations are some of the critical factors that could restrain the market growth. The vendors compete in terms of cost, product quality, reliability, and aftermarket services. It is crucial for vendors to provide cost-effective and efficient products to survive and succeed in a competitive market environment.
The growth of the vendors is dependent on market conditions, government support, and industrial development. Thus, the vendors should focus on expanding their presence and improving their services. ABB, General Electric, Schneider Electric, Doosan, and Siemens are some of the key players operating in the global market. These companies compete in terms of availability, quality, price, and technology. They consider product development as their key strategy in the global distributed energy resource management system market. Although the international players are dominating the market, regional and foreign players with small market shares also have a significant presence. The international players may strengthen their presence in the global market by heavily investing in product development during the forecast period.
THREAT OF NEW ENTRANTS
The global distributed energy resource management system market is expected to witness significant growth, owing to the growing use of combined heat & power (CHP) plants and high investments in electric vehicles (EVs). Factors such as the need for high initial investments and a vast customer base might hinder the entry of new players. The key players operating in the global distributed energy resource management system market have high technical expertise, and they hold a majority of the market share, owing to various innovative and strategic approaches, which leads to the effective implementation of technologies. This results in a further reduced threat of new entrants. Some of the key players of the market are ABB, Siemens, and General Electric. The wide geographic reach of the players makes it difficult for new players to achieve economies of scale and large profit margins. However, due to the growing number of regional market players, the profit margins of companies operating in the market are moderate. Therefore, the threat of new entrants in the global distributed energy resource management system market is expected to be moderate.
BARGAINING POWER OF SUPPLIERS
The key suppliers of DERMSs include the providers of hardware and software that are required for the integration and enabling of DERMSs. A high concentration of suppliers restricts their bargaining power. The need for reliable and efficient DERMSs makes it necessary for the system integrators and enablers to form contracts with the suppliers, who invest in research & development to offer innovative software and hardware solutions specific to the industry verticals. This leads to a dependence of the integrators on the suppliers and raises the bargaining power of suppliers to an extent. Thus, the bargaining power of suppliers in the global distributed energy resource management system market is expected to be moderate.
BARGAINING POWER OF BUYERS
The buyers in this market, who can broadly be categorized into energy, automotive, government & municipalities, renewable energy systems, and other users who have adopted DERMSs extensively. The concentration of buyers in the market is high, which reduces their bargaining power. They form long-term contracts with the system integrators, which leads to an increased cost of switching and reduces their bargaining power. However, a large number of international and domestic sellers provide DERMSs at relatively competitive prices, which increases the bargaining power of buyers to an extent. Thus, the bargaining power of buyers is expected to be moderate.
THREAT OF SUBSTITUTES
A DERMS is a software platform comprised of hardware and software to monitor, regulate, and control the distribution grids that are mainly based on distributed energy resources. It enables the critical tasks of monitoring and controlling of equipment, organizing the operation of the aggregated distributed energy resources within a power grid, and delivering real-time information to control centers. DERMSs may be installed on the substations or are connected to computers set up at a certain distance from the substations. There are no substitutes for DERMSs. Therefore, the threat of substitutes in the global distributed energy resource management system market is expected to be low.
RIVALRY
There is intense competition among the players such as ABB, Siemens, General Electric, Open Access Technology International, Inc., and Autogrid Systems, Inc. and the vendors invest heavily in research & development to meet the growing demand for DERMSs in various industries. Moreover, these players hold a majority of the share of the global distributed energy resource management system market. Key players in the global market are enhancing their product portfolios and are regularly participating in seminars and conferences to penetrate the market. Thus, the intensity of rivalry in the global distributed energy resource management system market is expected to be high.
