The global quantum computing in energy and utility market size is estimated to surge around USD 23.72 billion by 2034 from USD 15.42 billion in 2024, at a CAGR of 4.40%.
Quantum Computing in Energy and Utility Market Key Points
- In 2024, North America emerged as the leading region in the quantum computing market for the energy and utility sector.
- Asia Pacific is projected to experience the fastest growth over the forecast period.
- Among technologies, the quantum annealing segment accounted for the largest market share in 2024.
- The quantum computing software segment is anticipated to grow at the highest rate in the coming years.
- In terms of applications, energy grid optimization held the largest share of the market in 2024.
- The battery and energy storage optimization segment is expected to register the fastest growth moving forward.
- By component, the hardware segment dominated the market in 2024.
- The services segment is forecasted to grow at a notable CAGR throughout the forecast period.
How Is Quantum Computing Transforming the Energy and Utility Sector?
Quantum computing is revolutionizing the energy and utility sector by offering advanced solutions for complex challenges such as energy grid optimization, renewable integration, and battery storage enhancement. Its ability to process massive datasets and perform intricate simulations enables better management of power distribution, more accurate renewable energy forecasting, and improved design of energy storage systems. Applications like predictive maintenance and molecular modelling for fuel development also highlight its potential to boost efficiency and reduce operational costs.
The market is driven by growing demand for sustainable energy solutions, increasing complexity of modern energy grids, and rising investments in quantum R&D. While North America currently leads due to strong technological infrastructure, Asia Pacific is expected to grow the fastest. Challenges such as high hardware costs and integration with existing systems remain, but ongoing advancements and collaborations between tech firms and utility providers present significant opportunities for innovation and long-term impact.
What Role Does AI Play in Advancing Quantum Solutions for Energy and Utilities?
Artificial Intelligence (AI) plays a crucial role in enhancing the capabilities of quantum computing in the energy and utility sector. AI helps manage and analyse the massive datasets generated by energy systems, providing insights that guide quantum algorithms toward more efficient problem-solving. When combined, AI and quantum computing can optimize complex processes such as load forecasting, energy demand prediction, and real-time grid management, leading to smarter and more adaptive energy systems.
Moreover, AI supports the development and refinement of quantum algorithms by automating model training, error correction, and hardware calibration. This synergy accelerates innovations in applications like energy storage design, renewable integration, and fault detection. As quantum hardware continues to evolve, AI will be essential in unlocking its full potential, bridging the gap between theoretical models and real-world deployment in energy and utility operations.
Market Scope
| Report Coverage | Details |
| Market Size by 2034 | USD 23.72 Billion |
| Market Size in 2025 | USD 16.10 Billion |
| Market Size in 2024 | USD 15.42 Billion |
| Market Growth Rate from 2025 to 2034 | CAGR of 4.40% |
| Dominating Region | North America |
| Fastest Growing Region | Asia Pacific |
| Base Year | 2024 |
| Forecast Period | 2025 to 2034 |
| Segments Covered | Technology, Application, Component, and Region |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
Market Drivers
The quantum computing in energy and utility market is driven by the rising complexity of modern power grids, the growing demand for efficient energy storage, and the global push toward decarbonization. Quantum computing enables faster simulations and optimization of energy systems, which helps utilities manage fluctuating energy supply and demand, especially with the increasing integration of renewable sources.
Opportunities
There are strong opportunities for collaboration between quantum tech companies and utility providers to develop practical, near-term quantum applications. Advancements in hybrid quantum-classical computing open new possibilities for optimizing grid performance, battery chemistry, and predictive maintenance. As investment in quantum R&D grows, the sector can benefit from early pilot programs and innovation hubs focused on clean energy.
Challenges
Despite its promise, the market faces challenges such as the high cost and limited scalability of current quantum hardware. A lack of skilled professionals, uncertainty around commercial readiness, and integration difficulties with legacy energy infrastructure also pose barriers. Moreover, quantum technologies still require significant testing and refinement before widespread deployment.
Regional Outlook
North America leads the market due to strong research institutions, government funding, and early industry adoption. Europe follows with strategic initiatives focused on green energy and digital transformation. However, Asia Pacific is expected to grow at the fastest rate, fuelled by rising energy demands, technological innovation, and increasing government support for quantum technology.
Segmental Outlook of the Quantum Computing in the Energy and Utility Market
Technology Outlook
Quantum annealing dominated the market in 2024 due to its effectiveness in solving optimization challenges critical for energy grid management, such as load shedding and minimizing energy losses. This approach enables real-time decision-making, making it indispensable for energy providers. Meanwhile, quantum software is the fastest-growing segment, driven by demand for real-time data processing, secure communication protocols like quantum key distribution, and simulations of complex energy systems.
Application Outlook
Energy grid optimization held the largest market share in 2024, as quantum computing enhances renewable energy integration and grid resilience against fluctuations and cyber threats. Battery storage optimization is the fastest-growing application, leveraging quantum algorithms to improve energy density, extend battery lifespan, and reduce manufacturing costs—key factors for stabilizing grids reliant on solar and wind power.
Component Outlook
Hardware led in 2024, supported by advancements in qubit technologies such as superconducting circuits and trapped ions. The services segment is expanding rapidly due to rising demand for hybrid classical-quantum system integration expertise, while software growth stems from its role in optimizing energy distribution and managing real-time grid data.
Quantum Computing in Energy and Utility Market Companies
IBM Corporation: Leads in quantum hardware and software development, focusing on energy grid optimization and renewable integration.
Microsoft Corporation: Provides cloud-based quantum computing through Azure Quantum, aiding in grid management and energy forecasting.
D-Wave Systems Inc.: Specializes in quantum annealing for solving optimization problems in energy storage and load balancing.
Rigetti Computing: Offers quantum hardware and cloud services for simulating energy systems and optimizing grid operations.
Google Quantum AI (Alphabet Inc.): Develops advanced quantum processors to simulate energy materials and enhance grid resilience.
Intel Corporation: Focuses on scalable quantum chip development for energy system simulations and grid optimization.
Xanadu Quantum Technologies: Creates photonic quantum computers for modeling energy distribution and battery storage.
Honeywell Quantum Solutions: Delivers quantum hardware solutions for energy forecasting and renewable integration.
IonQ: Develops trapped-ion quantum computers used for grid management and energy storage optimization.
Zapata Computing: Provides quantum software platforms for data processing and predictive maintenance in utilities.
Q-CTRL: Specializes in quantum control software to improve quantum computer performance in energy applications.
Atos SE: Offers quantum simulation and hybrid computing services for optimizing energy flows.
Fujitsu: Delivers quantum-inspired computing solutions for grid optimization and battery management.
Quantum Computing Inc. (QCI): Provides quantum-ready software and hardware focused on optimization and risk management.
Alpine Quantum Technologies (AQT): Develops ion-trap quantum computers targeting grid management and renewable energy integration.
Source: https://www.precedenceresearch.com/quantum-computing-in-energy-and-utility-market
