DERMS market to hit $7.04b by 2035 as data centre demand strains grids
Grid software spending is accelerating as US data centres push electricity demand up 130%, forcing utilities to automate renewable integration.
The global distributed energy resource management system market is expected to grow to $7.04 billion by 2035, according to a forecast published by Asian Power on Wednesday (2026-07-29). The projection rests on two pillars: rising renewable deployment and grid modernisation spending, with utilities turning to digital platforms to manage increasingly complex networks.7
That growth path matters because it tracks a parallel surge in electricity demand that is straining existing infrastructure. The United States accounts for 45% of global data centre electricity consumption, with demand expected to rise by nearly 240 terawatt hours, a 130% increase that is creating grid stress and accelerating adoption of AI-driven predictive management tools. China contributes 25% of global data centre consumption, with demand projected to grow by 175 terawatt hours, or 170%.1
Utilities are not waiting for the problem to peak. A Persistence Market Research analysis found that 41% of utilities have achieved fully integrated AI and analytics systems ahead of schedule, with ABB Ltd. and GE Vernova advancing AI-driven energy platforms. North America leads the AI in energy distribution market with roughly 30% share, while East Asia holds about 22% and is the fastest-growing region, fuelled by industrial digitisation and smart city initiatives across China, Japan and South Korea.1
The broader smart energy complex is expanding on the same logic. The global smart energy market was valued at around $156.1 billion in 2026 and is projected to reach $417.7 billion by 2033, according to a March 9 (2026-03-09) report, with growth driven by the transition toward digital energy infrastructure.3
At the more granular end, smart electricity meters are forecast to grow from $15.02 billion in 2026 to $23.46 billion by 2031, a 9.31% CAGR, per Mordor Intelligence research published on June 10 (2026-06-10). The metering buildout is the physical layer that DERMS platforms need to communicate with distributed solar, storage and flexible load.5
The demand signal is not confined to the US and China. Australia's National Electricity Market is integrating AI-driven renewable forecasting platforms that predict solar irradiance, wind speed and generation output with increasing accuracy, according to a MENAFN analysis from May 12 (2026-05-12). Grid operators there are using the tools to optimise dispatch decisions and schedule maintenance across transmission and distribution networks.2
The spending backdrop is unusually large. Bloomberg Intelligence analysts expect extreme weather to drive more than $20 trillion in global infrastructure spending over the next decade, a capital reallocation that shifts from reactive repair toward preventive grid investment. Heatwaves, storms and floods are increasing in frequency, and each event tests the limits of distribution networks designed for a different climate.4
The market forecasts should be read with caution. Research house projections in this space tend to compound optimistic assumptions about technology adoption rates, regulatory speed and cost declines. The AI-in-distribution figure of $42.7 billion by 2033, for instance, assumes seamless renewable assimilation and significant grid flexibility improvements that utilities have historically been slow to deliver.1
There is also a question of whether the software can keep pace with hardware failures. Power monitoring systems are increasingly used by North American utilities to manage harmonic distortion and frequency variations, with building automation dominating demand for energy efficiency, according to a July 5 (2026-07-05) Yahoo Finance report. That suggests utilities are prioritising operational reliability before they layer on optimisation tools.6
The real test will come as data centre construction accelerates in regions with weaker grid interconnections. The US data centre load is concentrated in a handful of states, and the 130% demand growth projection assumes those regional grids can absorb the interconnection queue. That is exactly the bottleneck DERMS vendors claim to solve, and it is also the risk to their revenue forecasts.
Watch whether utility procurement of AI-driven grid platforms in the US accelerates in the second half of this year, particularly among the 59% of utilities that have not yet reached fully integrated AI systems. The gap between the 41% already there and the rest is where the market's next growth leg will be won or lost.1