Critical Power and Cooling Market Report - Global Size, Share, Developments, and Growth Forecasts, 2024–2030

Critical Power and Cooling Market Overview

The critical power and cooling solutions market size has been estimated at USD 25.5 Billion in 2023, and it will touch USD 56.0 Billion by 2030, powering at a rate of 12.1% between 2024 and 2030.

This is because of the development of edge computing, the growing need for data centers, industrial automation & smart manufacturing, and the emphasis on energy efficiency.

• For example, in 2023, AWS plans to open 15 more availability zones and 5 more AWS regions in Germany, Canada, Malaysia, Thailand, and New Zealand.

Critical power and cooling infrastructures are important for the uninterrupted operation of data centers and other important infrastructure. They guarantee a reliable power supply, prevent downtime, and keep the optimal temperatures, protecting sensitive equipment. With technological advances and digital dependency increasing, these solutions are of major importance, not only for operational continuity but also for energy efficiency and environmental sustainability.

Drivers

• Development of Edge Computing: The deployment of edge computing is surging, as data processing gets closer to the source. These smaller, geographically dispersed facilities need reliable power and cooling systems, thus, generating new opportunities in the industry.
• For example, in May 2022, Verizon and AWS announced the expansion of edge computing to 19 metro areas in the U.S.
• Growing Need for Data Centers: The constantly growing demand for cloud computing, data storage, and internet connectivity is causing the emergence of new data centers all over the world. These facilities need dependable as well as competent power and cooling systems that help to accelerate the industry expansion.
• For instance, the global demand for data centers will reach a value of USD 602.76 billion in 2030.
• Industrial Automation & Smart Manufacturing: The rapid expansion of automation in the industry as well as the emergence of smart manufacturing services requires a constant power supply without interruption. This is driving the need for developed power backup as well as cooling solutions in the industrial sector.
• Emphasis on Energy Efficiency: Environmental issues as well as high energy costs are making companies move towards energy-efficient power and cooling solutions. This is leading to innovation in fields such as free cooling, AI-driven optimization, and liquid cooling.
• In April 2021: Schneider Electric introduced the “Galaxy VL”, a highly efficient 3-phase UPS for industrial applications.

Trends

A key trend being witnessed in the industry is a move towards flexible as well as scalable solutions. Vendors are becoming aware of the shifting demands of data centers and critical infrastructure, developing flexible solutions capable of responding to changing needs. Another trend is the incorporation of smart grid technologies, in which power and cooling solutions are linked for real-time monitoring and power consumption optimization. This allows for a more intelligent as well as reactive infrastructure.

• In November 2023, Schneider Electric announced that the company is driving Generative AI productivity as well as sustainability solutions by incorporating Microsoft Azure OpenAI.
• In October 2022, Vertiv introduced “Vertiv SmartCabinet 2M”, offering an all-in-one solution of monitoring, cooling, power, and racks.

Moreover, the industry is also observing an extensive acceptance of cloud-based monitoring and management platforms. The features of the cloud are utilized for remote monitoring of power and cooling systems, thus improving efficiency and reducing downtime. At the same time, there is an increasing focus on sustainability, as manufacturers continuously develop solutions that utilize renewable power sources to reduce ecological influence. This concentrated effort shows a commitment to producing environmentally friendly as well as energy-effective power & cooling solutions for the future.

Challenge

• Skill Gap in Workforce: The rising need for experienced technicians to install, operate, or manage modern energy and cooling systems is resulting in a skills gap in the workforce in the sector.
  • According to a survey, 53 percent of data center operators have difficulty finding skilled candidates, which is an increase from 47 percent in 2021.
• Incorporation of New Technologies: Integration of new technologies such as artificial intelligence and advanced analytics into power and cooling systems can be difficult and need large-scale investments.
• Increasing Material Price: The rise in the price of raw materials such as steel and copper puts a strain on the profitability of vendors.
  • As per the World Bank, the metals & minerals price index increased 10% in the 1st quarter of 2023.
• Cybersecurity Threats: Data centers, along with other critical infrastructure, are progressively becoming vulnerable to cyberattacks. Therefore, power and cooling systems need strong cybersecurity protection.
  • According to IBM, in 2023, the global average cost of a data breach was USD 4.45 million, which is an increase of 15% over 3 years.
  • Moreover, 51% of establishments are preparing to enhance security investments owing to a breach.

Industrial Category Account Significant Share

The industrial category, based on end-use, is a significant contributor to the industry. Many industrial processes are highly sensitive to interruptions in power supply. Generally, chemicals, food production, and pharmaceuticals sectors, function in regulatory environments with stringent needs for safety & environmental control. Adherence to these regulations involves the deployment of dependable critical power and cooling systems. These facilities are often characterized by the presence of complicated and sensitive machinery such as production equipment, control systems, and robotics. These systems will work efficiently and precisely as long as they have a steady power supply.

• For instance, the global demand for industrial refrigeration systems is expected to reach USD 41.1 billion by 2030.

Critical power solutions prevent this equipment from failing due to power quality problems or outages. Temperature control and conditions of the environment are important for many industrial processes. Critical cooling solutions are an important part of the process that helps to provide the most favorable operating conditions for equipment, avoid overheating, and deliver consistent quality of the final product.

Explore more about this report - Request free sample

UPS will Advance Significantly

The UPS category, based on type, is likely to advance at a significant CAGR during this decade. A UPS system acts as a central element in preventing power disruptions, which in turn guarantees the continuous operation of vital equipment in different sectors. Data centers – large-scale as well as edge facilities – are characterized by their high demand for UPS systems. 

• For example, the demand for data center UPS will reach USD 10,096.5 million in 2030.

The tremendous rise in demand for data centers powered by cloud computing, digital services, and the Internet of Things has been the main driver of category expansion. UPS systems are the key element of industrial automation and control systems, ensuring continuous operation and reducing expensive downtime.

North America Dominating

North America is the largest contributor to the industry. This can be ascribed to technological developments, digitalization, adherence to standards, and a strong need for dependable power infrastructure. North America hosts a large number of data centers thanks to the explosive growth in the demand for big data, digital services, and cloud computing. With the continuous growth of data centers, reliable critical power and cooling systems are essential to maintain seamless operations. 

• For instance, there are more than 2,500 data centers in the U.S.

Moreover, the continent has witnessed fast growth in edge computing, with the setting up of edge data centers to lower latency and serve real-time applications. These edge facilities demand the use of specific critical power and cooling infrastructure. 

APAC is likely to advance significantly in the coming years. This is because of the rapid industrial growth, coupled with the increasing demand for backup power and cooling systems which help prevent data loss, hardware damage, and downtime. In addition, the increased need for electricity in different end-use areas including hospitals, BFSI, and power plants, will eventually boost the requirement for critical power and cooling solutions during this decade.

• For instance, Singapore will invest approximately USD 7.5 billion to USD 9 billion in new data centers over the next 10 years.

Competitive Landscape

The critical power and cooling solutions market is dynamic, with both new and established players contributing to a range of offerings. Moreover, the industry is dynamically evolving to meet the demand from data centers and infrastructure, which is encouraging innovation as well as adaptation.

Major Players in the Industry

• ABB Ltd
• Daikin Industries Ltd.
• Schneider Electric SE
• Ac Power Corp
• Eaton Corporation plc
• Asetek A/S
• General Electric Company
• Johnson Controls International Plc
• Socomec Group
• Riello Industries S.R.L.
• STULZ GMBH
• THL-Nortek Investors LLC
• Kehua Data Co. Ltd.