Quantum Computing in Energy and Utility Market Size, Share and Trends 2025 to 2034

Quantum Computing in Energy and Utility Market Size and Forecast 2025 to 2034

The global quantum computing in energy and utility market size accounted for USD 15.42 billion in 2024 and is predicted to increase from USD 16.10 billion in 2025 to approximately USD 23.72 billion by 2034, expanding at a CAGR of 4.40% from 2025 to 2034. The market is witnessing rapid growth due to higher demand for developing renewable energy technologies and improving energy distribution, along with the requirement for faster and more efficient solutions for complex problems, specifically in optimizing power grids. By addressing all these concerns, this technology leads to significant cost savings, enhanced reliability, and improved environmental performance in the energy sector.

Quantum Computing in Energy and Utility Market Key Takeaways

• In terms of revenue, the quantum computing in energy and utility market is valued at $16.10 billion in 2025.
• It is projected to reach $23.72 billion by 2034.
• The market is expected to grow at a CAGR of 4.40% from 2025 to 2034.
• North America dominated the quantum computing in energy and utility market in 2024.
• Asia Pacific is anticipated to grow at the fastest rate in the market during the forecast period.
• By technology, the quantum annealing segment held the major share of the market in 2024.
• By technology, the quantum computing software segment is expected to witness the fastest growth during the projected timeframe. 
• By application, the energy grid optimization segment captured the biggest market share in 2024.
• By application, the battery and energy storage optimization segment is expected to grow at the fastest rate in the upcoming years.  
• By component, the hardware segment held a dominant share of the market in 2024.
• By component, the services segment is expected to grow at a significant CAGR during the forecast period. 

How Does Artificial Intelligence Alter the Quantum Computing in Energy and Utility Market?

Artificial intelligence (AI) is transforming the market for quantum computing in energy and utility by enhancing energy management, facilitating renewable energy integration, and advancing decarbonization efforts. AI enables more accurate forecasting of renewable energy generation, such as solar and wind, which helps integrate these sources more effectively into the power grid and improves energy trading strategies. Moreover, Quantum AI can perform calculations that are impossible for classical computers, leading to faster machine learning, more accurate predictions, and better optimization. This advancement contributes to the discovery of new materials for energy storage and other applications.

Market Overview

The quantum computing in energy and utility market encompasses the use of quantum computing technologies to address challenges in the energy systems. There is rising adoption of quantum computing technologies to address issues such as simulating material properties for cleaner fuels, optimizing renewable energy generation, enhancing grid management, improving smart grid security through quantum key distribution, and developing energy forecasting solutions. It also encompasses quantum hardware, software, and services tailored for energy companies and utility providers. The market is witnessing rapid growth due to the rising need to optimize power grids. In addition, the rising demand for risk management and predictive analytics creates the need for quantum computing technologies as they can improve risk assessment and predictive analytics by analyzing vast datasets and identifying potential failures.

What Are the Key Trends in the Quantum Computing in Energy and Utility Market?

• Growing Adoption of Quantum Computing: As the energy sector begins to recognize the potential of quantum computing, its adoption is anticipated to grow in addressing several challenges associated with optimizing power grids.
• Government Investments: Governments around the world are investing in quantum technologies to boost research and development of advanced materials. Quantum computing accelerates the discovery of new materials for energy storage, solar cells, and other applications.
• Potential for Transformative Disruption: Quantum computing has the potential to transform energy systems by improving their efficiency, sustainability, and security.
• Technological Advancements: Advancements in quantum hardware and software are fostering innovation and enhancing the capabilities of quantum computers. These developments in quantum computing technology are facilitating more complex and powerful applications.

Market Scope

Market Dynamics

Drivers

Increasing Demand for Renewable Energy Sources

The primary factor driving the adoption of quantum computing in the energy and utility sector is the increasing demand for renewable energy sources. Quantum computing has the potential to enhance efficiency and optimize energy systems. Quantum algorithms can assist in optimizing the integration of renewable energy sources, such as solar and wind, making them more reliable and efficient. Additionally, quantum computing can be applied to simulate materials for cleaner fuels, optimize electric vehicle charging, and secure smart grids, providing robust protection against cyber threats and data breaches.

• In April 2025, Bengaluru-based startup QpiAI launched one of the nation’s most powerful quantum computers, equipped with 25 superconducting qubits on World Quantum Day, aligning with global celebrations of quantum science and its transformative potential. The QpiAI-Indus system integrates superconducting quantum processors, high-performance control platforms, and AI-enhanced software for hybrid quantum-classical computing, aiming to revolutionize various fields.

Restraint

Shortage of Skilled Labor and High Development Costs

The main restraint in the quantum computing in energy and utility market is the shortage of skilled labor and high development costs. Developing quantum algorithms and installing quantum computing solutions require skilled knowledge. There is a shortage of skilled professionals in the quantum computing field. This talent gap limits innovations in quantum computing technologies. Moreover, the cost of quantum computers is very high, limiting their adoption.

Opportunity

Necessity for Optimization of Energy Systems and Grid Management

The rising need for optimizing energy systems and grid management creates lucrative opportunities in quantum computing in energy and utility market. Quantum computing can enhance energy production and distribution, leading to significant cost savings and reduced environmental impact. Quantum-driven energy forecasting, AI, and smart grid technologies optimize renewable energy sources. Key focuses include optimizing power grids, developing energy storage solutions, and improving renewable energy forecasting while also using quantum computing to enhance AI algorithms for predicting energy consumption and managing electric vehicle charging schedules. 

Technology Insights

The quantum annealing segment held the major share of the quantum computing in energy and utility market in 2024. This is mainly due to its effectiveness in solving optimization problems and addressing energy management challenges. These capabilities are essential for efficient energy management and grid operations. It excels in tasks such as load shedding, grid optimization, and reducing energy losses, all of which are critical for energy-providing companies. Additionally, it can also solve optimization problems much faster than classical computers, making it valuable for real-time decision-making in energy grids.

The quantum computing software segment is expected to witness the fastest growth during the projected timeframe. This is due to the rising demand for optimized energy grids and new energy technologies. This software allows for real-time processing of large data sets, improving energy distribution and load balancing. Moreover, it is increasingly used for simulating complex energy systems and providing secure data communication through quantum key distribution, leading to a better understanding and improved performance.

Application Insights

The energy grid optimization segment captured the biggest share of the market in 2024. This is because quantum computing provides significant advantages in optimizing complex grid operations and integrating renewable energy. As energy grids grow more complex with varying demands, the necessity for effective solutions increases. Quantum computing can enhance renewable energy forecasts and optimize grid management to address fluctuations. It also identifies vulnerabilities in grid infrastructure, improving resilience to failures and cyber threats, as well as quantum encryption methods that strengthen smart grid security.

The battery and energy storage optimization segment is expected to grow at the fastest rate in the upcoming years. The increasing demand for efficient energy management drives the integration of renewable sources like solar and wind, making energy storage essential. Quantum computing can also optimize battery performance, improve energy density, extend battery life, and reduce degradation, all essential for a stable energy grid. It can also enhance battery design and manufacturing, progressively lowering costs and encouraging wider adoption.

Component Insights

The hardware segment held a dominant share of the quantum computing in energy and utility market in 2024 due to its ability to build and scale robust quantum computers. Hardware is crucial for unlocking the potential of quantum computing across various sectors. Hardware like neutral atoms, spin qubits, and photonic networks are the foundational building blocks. Furthermore, key industry players are also enhancing platforms, with trapped ions and superconducting circuits being the most advanced commercially available options.

The services segment is expected to grow at a significant CAGR during the forecast period. This is resulting from the increasing demand for specialized expertise and solutions in this emerging field. Energy and utility companies are increasingly looking for help from service providers to integrate quantum computing into their operations. These providers also facilitate expertise in algorithm development, cloud-based access to quantum resources, and hybrid classical-quantum solutions. Therefore, this strategic approach allows businesses to leverage quantum computing for specific tasks while using classical computers for others.

Regional Insights

How Does North America Dominate the Market?

North America dominated the quantum computing in energy and utility market in 2024 by holding the maximum share. This is mainly due to its strong research and development environment, featuring world-class research institutions, advanced laboratories, and a skilled workforce focused on quantum technologies. The region also benefits from robust government support and a vibrant ecosystem of top companies and research organizations. Prominent companies such as IBM, Google, Microsoft, and Amazon, which are headquartered in North America, play active roles in advancing and implementing quantum technologies.

The U.S. Quantum Computing in Energy and Utility Market Trends

The U.S. plays a crucial role in the market within North America by fostering collaboration, investing in research and development, and supporting the creation of quantum applications. The U.S. is actively involved in deepening strategic partnerships with countries like India and Japan, focusing on AI, semiconductors, and quantum technology. Additionally, U.S. companies like Siemens are integrating quantum computing capabilities into computer-aided software for industries such as energy and utilities. In the last few years, the U.S. government has made significant investments in quantum research through initiatives like the National Quantum Initiative Act, which promotes research and development while encouraging private sector participation.

The CHIPS and Science Act of 2022 enhances support for quantum networking and communication by amending the National Quantum Initiative Act. It promotes research in quantum infrastructure, establishes development standards, and creates a merit-reviewed access program for U.S.-based quantum computing by integrating quantum information science into STEM education and includes it in the new Directorate for Technology, Innovation, and Partnerships of the National Science Foundation.

What are the Key Trends in Asia Pacific Quantum Computing in Energy and Utility Market?

Asia Pacific is anticipated to grow at the fastest rate in the market during the forecast period. This is stemming from its significant private sector investment and robust academic research, as many countries, including China, Japan, and South Korea, are actively investing in quantum technologies and sustainable energy infrastructure. China has successfully developed a 66-qubit quantum computing system by empowering its leadership in the field as well, and India has also initiated a National Quantum Mission to build a quantum computing technology ecosystem. This growth is further attributed to the increasing adoption of quantum computing in financial services, research outsourcing for hardware and software development, and the rising demand for managing energy data.

• In April 2023, the Union Cabinet approved the National Quantum Mission at a total cost of Rs. 6003.65 crore, aiming to nurture and scale up scientific and industrial research and development and further develop a vibrant and innovative ecosystem in Quantum Technology. Further, the Mission objectives include developing intermediate-scale quantum computers with 50-1000 physical qubits in 8 years on various platforms like superconducting and photonic technology.

(Source: https://dst.gov.in)

China: A Key Force in the Development and Applications of Quantum Computing

China plays a distinctive role in the growth of the quantum computing in energy and utility market. China has made considerable strides in quantum technology, including the development of programmable superconducting quantum computing systems. The country actively participates in quantum research and development, with the majority of firms focusing on bringing innovations in quantum computing.

Indian Quantum Computing in Energy and Utility Market Trends

India plays a significant role in quantum computing in energy and utility market within Asia Pacific. This is because India is actively building a quantum ecosystem through government initiatives, academic research, and private-private collaboration. The National Quantum Mission is a key initiative emphasizing quantum computing, communication, sensing, and materials. Additionally, India encourages strategic alliances between government, industry, and academia to support advancements in various quantum fields, foster long-term growth, empower indigenous innovation, and engage in global partnerships.

Europe: A Significantly Growing Area

Europe is expected to grow at a significant rate in the upcoming period. This results from its strong research institutions, dynamic industrial ecosystem, and focus on responsible innovation, as it boasts a long tradition of excellence in quantum research, with numerous research institutions and universities contributing to the field. Additionally, many countries and the EU have invested in quantum research and development, including the Quantum Technologies Flagship, further contributing to the market expansion.

Quantum Computing in Energy and Utility Market Companies

• IBM Corporation
• Microsoft Corporation
• D-Wave Systems Inc.
• Rigetti Computing
• Google Quantum AI (Alphabet Inc.)
• Intel Corporation
• Xanadu Quantum Technologies
• Honeywell Quantum Solutions
• IonQ
• Zapata Computing
• Q-CTRL
• Atos SE
• Fujitsu
• Quantum Computing Inc. (QCI)
• Alpine Quantum Technologies (AQT)

Recent Developments

• In March 2025, the Technological Institute of the Philippines (TIP) officially opened the Quantum and Intelligent Systems Laboratory for Power Engineering (QISLaP), the country’s first quantum research lab focused on the energy sector. The facility is funded by the Department of Science and Technology – Philippine Council for Industry, Energy and Emerging Technology Research and Development (DOST-PCIEERD) with a grant of PHP 18 million ($314K $USD). (Source: https://quantumcomputingreport.com)
• In November 2024, at the IBM Quantum Developer Conference, IBM announced advancements in quantum hardware and software that enhance the execution of complex algorithms with unprecedented scale, speed, and accuracy. Users can now explore how quantum computers can solve scientific challenges in materials science, chemistry, life sciences, and high-energy physics. These developments also enable the creation of new algorithms that effectively combine quantum and classical supercomputing resources.
  (Source: https://newsroom.ibm.com)

Segments Covered in the Report

By Technology

• Quantum Annealing
• Quantum Simulation
• Quantum Computing Hardware
• Quantum Computing Software

By Application

• Energy Grid Optimization
• Renewable Energy Management
• Energy Forecasting
• Molecular Simulation
• Risk Management
• Battery and Energy Storage Optimization

By Component

• Hardware
• Software
• Services

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East and Africa