This blog post by Advanced Energy United President and CEO Heather O'Neill is an excerpt of the Foreword from the Advanced Energy Now 2023 Market Report, prepared for Advanced Energy United by Guidehouse Insights. This post will be the first in a series of excerpts from the report.
This week, we launched the Advanced Energy Now 2023 Market Report, prepared for Advanced Energy United by Guidehouse Insights. In addition to covering the main trends in advanced energy markets we’ve been tracking since 2011, the 2023 edition contains U.S. and global revenue for 2021 and 2022 – two years shaped in large part by the COVID-19 pandemic and the ensuing recovery.
2022 was a year of strong advanced energy market growth, with revenues up about 14% overall in both the U.S. and globally. Since 2011, global and U.S. growth averaged about 9.5% per year, and the global market is now about $2.1 trillion, and the U.S. market is almost $375 billion. With COVID-19 now more clearly in the rear-view mirror, we can say that the industry showed notable resilience and continued to grow throughout this tumultuous period.
Perhaps the biggest story since the last edition of this report in 2021 is the fast-accelerating growth of plug-in electric vehicles (PEVs - including battery electric and plug-in hybrid vehicles). Globally and in the U.S., PEV sales revenue grew more than 60% in 2022, driving overall Advanced Transportation growth of more than 40%, making it the largest advanced energy segment globally. In the U.S., we expect it will overtake Building Efficiency in 2023, which remains the largest segment domestically. As we’ve seen with other advanced energy technologies, growth is often not linear, and we appear to be approaching – and in some markets, have passed – an inflection point in electrified transportation market development.
Since the last publication of this report, we likewise saw the U.S. pass landmark federal legislation in the form of the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA). Together these bills represent a historic investment in clean energy and transportation electrification. We are already seeing the impacts of these laws – despite being in the early years of implementation– with the announcement of billions in new investment for domestic advanced energy manufacturing, PEV charging, clean energy generation, and storage facilities.
These new projects represent a significant opportunity for the states and communities in which they’re located, in the form of new economic investment and job creation. However, they also present a challenge – further adding to the backlog of projects seeking to interconnect to the grid. Infrastructure is key– for PEVs, it's about ensuring sufficient charging infrastructure and the associated grid upgrades, including smarter energy management. For Electricity Generation, interconnection, and transmission buildout have become a bottleneck. While this is not an advanced energy issue specifically, advanced energy technologies, like high voltage direct current (HVDC) transmission and energy storage (which grew to $7.4 billion in the U.S. in 2022), have a role to play in helping alleviate the backlog. Fortunately, the IIJA and IRA are not just focused on clean energy production, but on the infrastructure buildout that will be needed to bring that clean energy to market, and Advanced Energy United is hard at work addressing these issues in many of the venues where we engage.
