The global IoT market in the energy industry is expected to more than double from 2023 to 2031, according to a new report from Skyquest, reaching $68.2 billion USD from $28.1 billion USD in 2023. That represents a CAGR of 11.7 percent.

The primary driver of this growth is increased use of automation within the energy industry, according to the report. Anticipated deployment of smart meters and rising demand for smart grid integration are also significant growth factors.

The report segments the IoT in energy market into three parts: component, application, and technology. The component segment includes platforms, solutions, and services. Application refers to IoT use in areas such as oil & gas, smart grid, and coal mining. Technologies covered include cellular, satellite, and radio networks. The report also offers breakdowns by region and organization size.

Most IoT devices in the energy sector connect through a cellular network, the report found, because the cellular infrastructure is already established. Cellular networks offer connectivity for mobile IoT devices and systems used in the energy sector. Growing demand for better connectivity for automation of the energy industry is projected to help this segment account for a substantial share of the global IoT in the energy market, the report’s authors stated. The advent of 5G technology is also estimated to create new opportunities for IoT in energy providers.

IoT and telecommunication network providers are focusing on developing satellite constellations, especially for IoT devices, according to the report. Low earth orbit (LEO) satellites are being used to establish new communication networks for IoT in energy and other applications. High demand for resilient and reliable connectivity will also help this segment generate new business opportunities.

Large investments in grid modernization are creating smart grid applications that drive IoT in energy adoption. Smart technologies are being integrated into energy applications to satisfy surging demands for energy and efficient energy management. The use of smart meters and the high demand for automation in modern energy grids will also create new opportunities for IoT in energy, as will demand for predictive maintenance capabilities in smart grids.

Skyquest projects the platform segment to account for “a dominant market share” because of its crucial role in the functional operation of IoT devices and systems. The firm also recommends that IoT in energy companies should focus on device connectivity, which it projects to be highly dependent on platforms, to bolster market share.