Global Quantum Computing in Energy and Utility Market 2025 – 2034

Reports Description

As per the Quantum Computing in Energy and Utility Market analysis conducted by the CMI Team, the global Quantum computing in energy and utility market is expected to record a CAGR of 4.40% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 16.10 Billion. By 2034, the valuation is anticipated to reach USD 23.72 Billion.

Overview

The quantum computing market in energy and utilities is quickly shaping up and has the potential to change the way energy systems are managed. In particular, quantum computing offers a way to provide advanced solutions to complex challenges like optimizing grid systems, energy storage, renewable energy forecasts, etc., concerns that traditional computing could not efficiently handle. Through quantum computing, companies in the energy space will be able to improve the way they distribute electricity while also speeding up recovery times and better integrating renewable sources, particularly wind and solar sources.

In addition, quantum computing is forecasted to provide opportunities for predictive maintenance, thus allowing for greater lifespan and performance of infrastructure and energy supply chain optimization. Furthermore, quantum computing provides a means for executing simulations of energy production and consumption faster and more accurately, which can be leveraged to operate more sustainably and optimally.

The market is expected to grow steadily, owing to improvements in quantum hardware and software, as well as significant investments from both the government and private sectors. Over time, when quantum computing technology matures, quantum computing will become an important part of creating smarter and more sustainable energy systems around the globe.

Key Trends & Drivers                                                                                                  

The Quantum computing in energy and utility market Trends present significant growth opportunities due to several factors:

• Advancements in Quantum Hardware: Ongoing progress in quantum hardware helps push the growth of the market. As qubit stability and processing power improve, quantum systems gain further reliability and capacity. This capability allows energy companies to handle increasingly complicated barriers like approaches to energy grid optimization and storage. Over time, as quantum hardware becomes more powerful, further applications in energy and utilities will be possible, which can improve decision-making through improved data accuracy in energy management.

• Rising Demand for Renewable Energy: As the world transitions to renewable energy, demand for technology that can assist with the increasingly inevitable fusion of energy systems is rising. Quantum computing can refine the forecasting models of renewable energy generation and improve grid management for distributed energy resources such as wind and solar. The industry shift towards renewable energy is anticipated to drive demand for quantum computing, allowing companies to bolster energy efficiency with a durable energy distribution system.

• Government Investments and Initiatives: Various national governments are investing in quantum computing R&D worldwide, which is facilitating the transition of quantum computing into the energy and utilities sector. The U.S. and EU, for example, have created national initiatives such as the National Quantum Initiative, which directs investment into quantum R&D and innovation.

• Increasing Complexity of Energy Systems: Energy systems are getting more complex with the cumulative developments of renewables, energy storage technologies, and sophisticated grid operation systems. Traditional computer models generally cannot dispose of the amount of data and the complexity of computation in today’s energy systems within any reasonable timeframe. With quantum computing, we will no longer be constrained by the huge datasets we can analyze, the new ability to quickly compare huge datasets and get results will help further improve energy distribution, lower costs, reduce system downtime, and allow for more effective grid optimization. The growing complexity in managing our energy systems will also drive an interest in quantum computing applications.

• Enhanced Predictive Maintenance: Quantum computing is opening up new predictive maintenance capabilities in the energy field. By analyzing the massive amounts of data created by various energy production and distribution systems, quantum algorithms have the potential to identify problems before they create unnecessary downtime and avoidable, expensive repairs. Early intervention can help avoid premature failure and can allow for a maintenance period that results in longer lifetime infrastructure. The energy sector is looking for new ways to improve service and lower operating costs, quantum computing is poised to positively change the performance and reliability of energy systems.

Significant Threats

Quantum computing in the energy and utility market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Enhancement of Renewable Energy Integration: Quantum computing can enhance renewable energy integration from solar and wind and support the acceleration of many emerging technologies, such as autonomous vehicles and smart grids, and provide more opportunities for the clean energy transition. Quantum algorithms will allow for better and faster forecasting and then optimization, that can allow the grid to manage with the variability of renewable energy sources. It can help providers to better manage and control distribution, make adjustments in real-time, minimize waste, and reduce inefficiencies. As the demand for clean energy expands, quantum computing could serve as a potential ally in the march toward a clean and reliable energy future.

• Optimization of Energy Storage Solutions: Quantum computing also has the potential to optimize energy storage systems, which are critical for modern energy grids. Energy storage is one way to balance the electricity supply and demand. Quantum algorithms will maximize the efficiency of battery storage and energy recovery while minimizing energy loss. Even small advancements can provide great value in grid management, operational costs, and energy storage system capacity. The increase in renewable energy creates a backdrop to utilize quantum computing in becoming better at developing more effective and scalable energy storage systems.

Opportunities

• Enhancement of Renewable Energy Integration: Quantum computing can enhance renewable energy integration from solar and wind and support the acceleration of many emerging technologies, such as autonomous vehicles and smart grids, and provide more opportunities for the clean energy transition. Quantum algorithms will allow for better and faster forecasting and then optimization that can allow the grid to manage with the variability of renewable energy sources. It can help providers to better manage and control distribution, make adjustments in real-time, minimize waste, and reduce inefficiencies. As the demand for clean energy expands, quantum computing could serve as a potential ally in the march toward a clean and reliable energy future.

• Optimization of Energy Storage Solutions: Quantum computing also has the potential to optimize energy storage systems, which are critical for modern energy grids. Energy storage is one way to balance the electricity supply and demand. Quantum algorithms will maximize the efficiency of battery storage and energy recovery while minimizing energy loss. Even small advancements can provide great value in grid management, operational costs, and energy storage system capacity. The increase in renewable energy creates a backdrop to utilize quantum computing in becoming better at developing more effective and scalable energy storage systems.

Category Wise Insights

By Technology

• Quantum Hardware: Encompassing qubits and quantum processors, quantum hardware is the physical apparatus that gives rise to quantum computations. This section is especially important because hardware advancements to push quantum computer performance, and energy companies benefit from greater qubit stability and error mitigation strategies, which can enable a host of more complex energy management tasks like optimizing grids and forecasting energy. Quantum hardware evolution could unlock large-scale solutions to energy issues cost-effectively in the marketplace, helping the growth of the market.

• Quantum Software: Quantum software provides the algorithms and platforms that take quantum reasoning and computational power and provide insights for energy systems. Quantum software can also leverage quantum technologies to provide optimization that can assist in grid management, storage solutions, and renewable energy forecasting. As software evolves, energy companies will be able to conduct simulations that classical systems are unable to achieve at optimal efficiencies and costs. Development of quantum technology software for energy applications drives uptake in energy companies and provides essential tools that assist quality of decision making and operations.

• Quantum Services: Quantum services consist of, among other things, cloud-based quantum computing platforms, consulting, and algorithm development. Quantum services will allow energy companies to take advantage of the power of quantum computing, with little to no investment in physical infrastructure. Quantum-as-a-Service (QaaS) is known to be a rapidly growing method to provide value and scalability in quantum computation.

By Application

• Grid optimization: Quantum computing offers a more efficient way to manage power grids through optimization problems that classical computers cannot handle. Quantum computing can increase real-time decision-making to ensure that loads are balanced throughout the grid, improving overall grid stability and lowering energy loss. Quantum algorithms are particularly well-suited to handle big data, which would allow utilities to predict shifts in energy demand, make decisions about optimum energy distribution, and more easily incorporate renewable energy sources into grid planning. As grids become more complicated and decentralized, quantum computers will determine how efficiently energy is delivered in today’s interconnected environment.

• Energy storage systems: Energy storage technological improvements are important for managing the intermittent flow of renewable energy. Quantum computing has the potential to improve the effectiveness of energy storage systems by optimizing battery operations, charging cycles, and energy recovery rates. Quantum algorithms can be used to help improve storage by allowing patterns in energy usage to be identified and stored energy to be more effectively managed while storing it so it is available when it is needed. With the growing opportunities for renewable energy, quantum computing can significantly enhance our ability to scale energy storage systems while contributing to the creation of sustainable energy infrastructure.

• Renewable Energy Forecasting: Quantum computing will dramatically improve the accuracy and efficiency of renewable energy forecasting using vast data from the environment. It can optimize weather patterns, energy production rates, and grid behavior to increase the accuracy of predicting solar, wind, and hydropower. This increased accuracy will allow energy companies the ability to develop models for energy generation by leveraging quantum algorithms. This is essential to ensure better integration of renewable energy into grids as energy systems globally transition to cleaner energy sources to allow for more efficient and reliable integration of renewable energy.

• Predictive Maintenance: Predictive maintenance utilizes quantum power to gain insights into vast amounts of sensor data that can be used to predict potential failures before they occur. In this case, quantum computing will alleviate costly downtime in the energy sector by predicting equipment problems before they arise. Quantum computing will enable the prediction of maintenance events by processing data from turbines, grids, and other energy infrastructure on the fly. Predictive maintenance will improve the reliability of assets, limit operational costs, and improve the life of critical energy assets. As the energy sector grows, quantum-powered predictive maintenance will provide a more efficient and cost-effective solution to managing energy infrastructure.

• Supply Chain Optimization: Quantum computing can optimize complex logistics, inventory management, and resource allocation to improve energy supply chain management. Quantum algorithms can also analyze massive data sets from supply chains to reduce waste, minimize costs, and increase efficiency. As supply chains become more complex with increasing renewable energy integration, Quantum computing can assist the energy industry with optimizing fuel distribution, energy storage management, and transportation at all levels of the energy supply chain to help ensure an energy supply chain operates smoothly, efficiently, and cost-effectively.

Impact of Recent Tariff Policies

Recent tariff practices, particularly those established through the U.S. government, have significantly affected the quantum computing industry as it pertains to the energy and utility industry. Tariffs on individual components such as cryogenic systems, specialized optics, and materials including indium gallium arsenide (InGaAs) have driven up production costs of quantum hardware, ranging from an increase of about 20% to 35% on certain hardware components. Another significant effect of tariffs is the disruption of the supply chain that will delay the research, development, and deployment of quantum technology in energy applications.

Additionally, the quantum computing stock market has also seen stress. Companies like D-Wave Systems and Rigetti Computing have witnessed major swings in stock prices as it follows their respective government tariffs and the uncertainty created from these tariff policies. In response, organizations based in the U.S. are investing in U.S. manufacturing capabilities and forming international partnerships to reduce risks associated with trusted supply chains. U.S. government initiatives like the National Quantum Initiative Act are providing funding for such initiatives. Although tariff policies introduced significant short-term challenges, they have spurred innovation and strategic repositioning of the companies in the industry as they see long-term growth opportunities in the energy market.

Report Scope

Regional Analysis

The Quantum computing in energy and utility market is segmented into various regions, including North America, Europe, Asia-Pacific, and LAMEA. Here is a brief overview of each region:

• North America: North America is at the forefront of the quantum computing market, receiving extensive investment from the U.S. and Canada. Innovative energy ideas and a commitment to sustainability are even greater drivers for the adoption of quantum technology within the energy industry. Furthermore, major players such as IBM, Google, and Microsoft have established robust footprints in the region by providing quantum hardware, software, and services. The U.S. Federal Government recently launched the National Quantum Initiative, which promotes investments in research into quantum technologies, among many others, which is already driving additional developments and investments into the sector. With a mature infrastructure, substantial technology ecosystem, and investment from government agencies, North America is poised to continue developing quantum solutions to optimize and manage energy consumption.

• Europe: Meanwhile, Europe is ramping up their investment in quantum computing, and several countries are driving innovation in this space in the energy sector across the continent. The European Union has funded the Quantum Flagship initiative, which provides a platform for deploying systematic initiatives to accelerate quantum research and development. Countries such as Germany, France, and the UK, among others, are currently funding projects to integrate quantum computing within grid optimization, renewable energy forecasting, and energy storage solutions. Given that the European Union has these green energy as sustainability goals, most of which involve reducing energy consumption while increasing the use of renewable energy sources, advances in quantum computing are positioning themselves at a timely time to help the government and private sector achieve these ambitious goals.

• Asia-Pacific: This region of the world appears to be rapidly growing for quantum computing with the likes of China, Japan, and India at the forefront of developments in quantum technology. China’s investment in quantum research and technology means that they are a major player in the sector, and the energy sector is no exception. Likewise, Japan and India are hoping to understand how quantum computing can aid in optimizing energy management and supporting the integration of renewables. Asia-Pacific is likely to be a strong market for quantum computing in energy as demand for sustainable energy practices increases and both the public and private sectors invest in quantum technologies.

• LAMEA: Latin America, the Middle East, and Africa (LAMEA) may be considered emerging markets for quantum computing, with the technology being increasingly considered for projects relating to the energy sector. In Latin America, some countries, such as Brazil and Mexico, are investigating quantum-based solutions for energy efficiency, integrating renewables, and managing a smart grid. The Middle East continues to make substantial investments in smart grid technology. In Africa, while challenges remain, particularly regarding the wider economic context, clean energy solutions are slowly becoming a part of the energy landscape. The LAMEA region may present challenges for quantum computing adoption due to both economic and infrastructural issues; however, the increasing focus on sustainable development in these areas could provide opportunities for quantum computing to help address issues in the energy sector.

Key Developments

In recent years, the Quantum computing in the energy and utility market has experienced several crucial changes as the players in the market strive to grow their geographical footprint and improve their product line and profits by using synergies.

• In May 2025, D-Wave announced the deployment of its Advantage2 quantum computing system. This system enhances capabilities in solving complex optimization problems, critical for energy grid management and resource allocation.

• In February 2025, Microsoft introduced Majorana 1, the world’s first quantum processor powered by topological qubits. This breakthrough aims to improve qubit stability and scalability for practical large-scale quantum computing applications.

• In December 2024, Google unveiled the Willow processor, a 105-qubit superconducting quantum chip that achieved a random circuit sampling task in just 5 minutes, a task that would take classical supercomputers 10^25 years, showing remarkable progress in quantum error correction.

• In December 2023, IBM launched Quantum System Two, the first modular utility-scale quantum computer, featuring the 156-qubit Heron processor. This system supports scalable quantum applications, marking a major advancement in quantum computing infrastructure.

• In October 2024, Honeywell introduced AI-powered solutions designed to optimize energy sector operations, accelerating the transition to autonomous energy management. These AI tools integrate seamlessly with existing systems, enhancing overall energy efficiency.

These important changes facilitated the companies ability to widen their portfolios, to bolster their competitiveness, and to exploit the possibilities for growth available in the Quantum computing in energy and utility market. This phenomenon is likely to persist since most companies are struggling to outperform their rivals in the market.

Leading Players

The Quantum computing in the energy and utility market is highly competitive, with a large number of product providers globally. Some of the key players in the market include:

• IBM
• Google
• Microsoft
• Rigetti Computing
• D-Wave Systems
• Honeywell Quantum Solutions
• Intel
• IonQ
• Xanadu Quantum Technologies
• Alibaba Quantum Laboratory
• Cambridge Quantum Computing
• Zapata Computing
• Quantum Circuits Inc.
• Toshiba Corporation
• Fujits
• Accenture
• AWS (Amazon Web Services) Quantum Computing
• Microsoft Azure Quantum
• Baidu Quantum Computing
• QCI (Quantum Computing Inc.)
• Others

These companies implement a series of techniques to penetrate the market, such as innovations, mergers and acquisitions, and collaboration.

The competition in the quantum computing market for energy and utilities is active and costly. Several companies are developing both quantum hardware and software for use in energy-related applications, with IBM, Google, and Microsoft holding the lead. Honeywell and D-Wave have made advances into new product developments in quantum hardware, with Rigetti Computing and IonQ relying on cloud-based quantum services that allow the energy companies to access quantum commercial capabilities while minimizing initial investment. These companies and many additional start-up companies are innovating in several energy-related areas, such as grid optimisation, energy storage, and renewable energy forecasting.

Much of the market is based on cooperative practices, as larger companies often collaborate with energy providers to test and utilise quantum solutions for practical energy systems. Government funding and research support, mainly from North America and Europe, also have a strong impact. The market could shift to a more aggressive competitive environment as technologies march forward, creating more competition and innovation and increased collaboration as quantum computing becomes more widely accepted in the energy markets.

The Quantum Computing in Energy and Utility Market is segmented as follows:

By Technology

• Quantum Hardware
• Quantum Software
• Quantum Services

 By Application

• Grid Optimization
• Energy Storage Systems
• Renewable Energy Forecasting
• Predictive Maintenance
• Supply Chain Optimization

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America