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Energy as a Service Market Size, Share & Industry Analysis, By Service Type (Energy Supply Services, Operation & Maintenance Services, Optimization & Efficiency Services, and Others), By End User (Industrial, Commercial, and Others), and Regional Forecast, 2020-2027

Region : Global | Format: PDF | Report ID: FBI101204

 

KEY MARKET INSIGHTS

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The global energy as a service market size stood at USD 17.82 billion in 2019 and is projected to reach USD 41.85 billion by 2027, exhibiting a CAGR of 12.3% during the forecast period.

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The energy as a service (EaaS) includes the sale of energy, technology, analytics, access to the grid, and personalized services. Increasing adoption of EaaS has been mainly to reduce buildings’ energy cost and reduce carbon emissions to maintain the ecological balance. The problem of carbon emissions has been tackled by the adoption of renewables, which has seen a rise in decentralized energy distribution.


MARKET TRENDS


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Increasing Adoption of Distributed Energy Resources to Boost the Market


Aging infrastructure for generating and transmitting power has forced utilities to invest and upgrade the policies for distributed energy resources (DER). Distributed energy resources include renewable energy, demand-response capabilities, and other energy-saving technologies to control and reduce energy use and better manage bills. Increasing investment in energy distribution systems would create demand for DER, which will help to propel the market. For instance, the California Public Utilities Commission (CPUC) has planned to invest USD 9 billion over the next three years on upgrades to its electric distribution system and enhancing its capabilities to operate the system. Hence, growing need for distribution systems and significant investment to improve grid efficiency is expected to drive the demand for EaaS in the forthcoming years.


Supportive Government Regulations for Energy-Efficiency Projects


To achieve rapid scale-up and improvement in efficiency, a stable and supportive policy framework is needed to enhance grid stability and uphold energy-saving potential. According to International Energy Agency (IEA) Energy Efficiency 2018 report, energy efficiency investment increased by 3% to USD 236 billion in 2017. Hence, growing investment prospects along with regulatory support is driving the demand for these services. The US framed the National Action Plan for energy efficiency, which establishes a goal of achieving cost-effective energy efficiency by 2025. Hence, supportive government regulations for energy efficiency projects are likely to drive the demand for EaaS during the projected period.


MARKET DRIVERS


Significant Investment in Renewable Energy Sources and Storage Solutions to Fuel Market Growth


Increasing focus on integrating renewable energy, distributed generation, energy storage, thermally activated technologies, and demand response into the electricity distribution and transmission system, has enabled more investment in renewable energy. Growing investment in renewable energy is driving the energy as a service market growth. According to the report on Global Trends in Renewable Energy Investment 2019 published by United Nations Environment Programme, global investment in renewable energy in 2018 increased to USD 272.9 billion, the fifth successive year in which it has exceeded USD 250 billion. Growing investment in storage solutions is also augmenting this market. For instance, in September 2018, the World Bank group announced a program to invest USD 1 billion to accelerate investments in battery storage for energy systems in developing countries. This program aims at ramping up the use of renewable energy to improve energy security, increase grid stability, and expand access to electricity. According to Bloomberg New Energy Finance (BNEF), the energy storage market is predicted to grow to cumulative 942GW by 2040, attracting an investment of USD 620 billion. Hence, increasing investment in renewable energy sources and storage solutions will fuel the market during the projected period.


Growing Energy Demand in Various Applications to Drive Demand


Energy demand is increasing day-by-day owing to growing industrialization and urbanization. To cater to the increasing energy demand and depletion of fossil fuels, it has become necessary to produce renewable power at a global scale. Solar & wind plants are geographically spread in large areas. Investment in renewable capacity in 2018 was about three times the global investment in coal and gas-fired generation capacity combined. The Energy Information Administration (EIA) forecasts that renewables will account for almost half—49%—of global electricity output by 2050. Increasing population and growing urbanization rate are likely to increase energy demand across the globe. According to the United Nations report, in 2018, 55% of the world’s population lives in urban areas which is projected to increase to 68% in 2050. Hence, increasing potential for renewable energy and growing energy demand across various sectors will drive the demand for this market during the forecasted period.


MARKET RESTRAINT


High Deployment Cost to Transform the Existing Grid Infrastructure Restraints the Market Growth


The transformation of existing grid infrastructure advances the capabilities of the electricity delivery systems, which is driving the market growth. As per the Institute of Energy Economics and Financial Analysis, India needs an investment of USD 60-80 billion over the next five years in grid infrastructure to achieve its tremendous growth in renewable energy capacity. Electric utilities have planned to invest USD 3.2 trillion globally in new and replacement transmission and distribution infrastructure. This infrastructure investment will be necessary due to growing electricity demand, aging assets, and new power generation projects including intermittent renewable resources that are straining the grid. Hence, growing need for transforming grid infrastructure, which is primarily driven by significant investment, hampers the market growth during the projected period.


Also, factors such as the outbreak of COVID-19 are affecting the power industry on a large scale. A dramatic decrease in power consumption, investments for commissioning new grid expansion projects, and a significant impact on the renewables sector are the primary factors for the prolonged downturn in demand owing to the spread of the virus.


SEGMENTATION


By Service Type Analysis


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Energy Supply Services Segment to Dominate the Global Market


Based on service type, this market is segmented into energy supply services, operation & maintenance services, optimization & efficiency services, and others. The energy supply services segment is dominating the market owing to rising demand for renewable sources of energy and decentralized energy distribution across industry verticals. The operation & maintenance segment holds the second-largest market share owing to the increasing need for boosting operational efficiency, reducing downtime, mitigating risks, and increasing the profitability of the assets. Growing demand for energy sustainability, innovative energy solutions, energy resources, and improvement in building efficiency help to reduce costs and maximize efficiency, which drives the optimization & efficiency segment. Hence, increasing renewable power generation and growing need to enhance efficiency will propel the demand for EaaS during the forecast period.


By End User Analysis


Commercial Segment to Dominate the Market during the Forecast Period


The end-user segment is further segmented into industrial, commercial, and others. The commercial segment is estimated to hold the largest share in the global market, which primarily includes educational institutions, healthcare industry, data centers, airports, banks, and others. As per the American Council for Energy-Efficient Economy (ACEEE), the commercial segment accounts for more than 18% of the energy used by various sectors in the United States. In the commercial sector, the buildings are majorly responsible for more than 30% of overall consumption. Different types of commercial buildings have energy application such as district energy systems and mercantile and service, which has higher energy consumption. The industrial segment is anticipated to hold the second-largest market share owing to the growing need for energy efficiency and economic growth. Hence, the commercial segment is anticipated to lead the energy as a service market share during the projected period.


REGIONAL ANALYSIS


Asia-Pacific Energy as a Service Market Size, 2019 (USD Billion)

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The global market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. The market is forecasted to gain momentum in Asia-Pacific owing to increasing investments in large industries and commercial projects. For instance, in 2019, India has more than 300 smart city projects worth USD 2 billion are in pipeline. Moreover, the adoption of green building models, increasing investment in renewable energy, and rising government support are the prominent factors attributed to the growth of the market.


The market in North America is expanding owing to the increasing demand for intelligent buildings and building automation. Increasing demand for services such as providing demand-energy response solutions due to growing commercial industry and implementing energy efficiency projects is driving the market growth. Additionally, increasing share of renewable power generation and energy efficiency activities is estimated to drive the market in this region.


Europe will dominate the market due to increasing renewable power generation and growth in the industrial sector. According to the European Energy Industry Investments report published in 2017, the investment in the power industry is estimated to increase from USD 58.37 billion in 2011-2020 to USD 86.73 billion in 2021-2030. Hence, growing investments in the industrial sector and renewable power generation offer lucrative growth opportunities for the EaaS market in Europe.


The countries in the Middle East & Africa are dominated by oil and gas companies and significant investment in the commercial sector. The advancement of an integrated distributed energy resource (iDER), augmented data analytics, and Artificial Intelligence market are emerging as strong growth opportunities, which will add a positive outlook for the growth of this market during the forecast period.


KEY INDUSTRY PLAYERS


Technological Upgradation in the Energy Industry Will Propel the Competition


The competitive landscape of this market is dependent upon technological advancements aimed at reducing operating & maintenance costs and improving operational efficiency. Growing adoption of energy as a service, by the utilities and commercial sectors for improving efficiency and reliability are the prominent factors responsible for the dominance of the ABB, Schneider Electric, Siemens in the global market.


However, increasing number of small players led to high competition among the major players. This is projected to positively impact the global market as these companies are anticipated to gain market share during the forecast period.


LIST OF KEY COMPANIES PROFILED:



  • ABB (Switzerland)

  • Schneider Electric (France)

  • Siemens (Germany)

  • Honeywell (United States)

  • Veolia (France)

  • Enel X (United States)

  • EDF Renewables North America (United States)

  • General Electric (United States)

  • ENGIE (France)

  • WGL Energy (United States)

  • Edison Energy, LLC (United States)

  • SmartWatt Inc. (United States)

  • Bernhard Energy (United States)

  • Centrica (United Kingdom)

  • Johnson Controls (Ireland)

  • Orsted (Denmark)


KEY INDUSTRY DEVELOPMENTS:



  • July 2019 – MAN energy solutions signed a global service agreement with the Wallem group. The agreement includes the supply of generators, turbochargers, and spares and services abroad vessels managed by Wallem. The agreement also covers all the global offices of the Wallem Group, which is headquartered in Hong Kong.

  • June 2019 Trimark Associates Inc., a leading provider of SCADA, metering, and energy storage technology solutions, was awarded a contract by a clearway energy group for the multisite monitoring and maintenance for CAISO revenue meters and remote intelligent gateways. The service agreement covers 11 utility-scale solar sites ranging from 5MW to 300 MW.

  • June 2019 – Budderfly had received a contract worth USD 55 million for the rapid expansion of successful energy efficiency as a service from Balance Point Capital in conjugation with Connecticut Innovations. This would help the company to cater to the customer service installations, expand product growth, and accelerate Budderfly’s go-to-market efforts.


REPORT COVERAGE


The energy as a service market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, products, and upcoming developments of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition, the report encompasses several factors that have contributed to the growth of the market over recent years.


An Infographic Representation of Energy as A Service Market

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Report Scope & Segmentation








































 ATTRIBUTE



 DETAILS



Study Period



  2016-2027



Base Year



  2019



Forecast Period



  2020-2027



Historical Period



  2016-2018



Unit



  Value (USD Billion)



Segmentation



By Service Type



  • Energy Supply Services

  • Operation & Maintenance Services

  • Optimization & Efficiency Services

  • Others



By End User



  • Industrial

  • Commercial

  • Others



By Geography



  • North America (U.S. and Canada)

  • Europe (U.K., Germany, France, Italy, Spain, Russia, and Rest of Europe)

  • Asia-Pacific (Japan, China, India, Australia, Southeast Asia, and Rest of Asia- Pacific)

  • Latin America (Brazil, Mexico, and Rest of Latin America)

  • Middle East & Africa (South Africa, GCC, and Rest of Middle East & Africa)



Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 17.82 billion in 2019.

The global market is projected to reach USD 41.85 billion by 2027.

Growing at a CAGR of 12.3%, the market will exhibit steady growth in the forecast period (2020-2027).

The energy supply services segment is expected to be the leading segment in this market during the forecast period.

Significant investment in sponsoring renewable energy sources & storage solutions, the rising potential of renewable energy, and growing energy demand in the various applications are the major factors attributed to the growth of the market. However, high deployment cost to transform the existing grid infrastructure restrains the market growth in the forecasted period.

The market size in the Asia-Pacific region stood at USD 5.62 billion in 2019.

ABB, Schneider Electric, Siemens, Honeywell, General Electric, and ENGIE are top companies in this market.

Energy-as-a-service (EaaS) is a business model where customers pay for an energy service without having to make any upfront capital investment. It provides businesses with a risk-free way to optimize energy systems, increase profits, reduce operating expenses, and dramatically improve working environments without any initial capital investment.

Energy as A Service  Market Size, Share and Global Industry Trend Forecast till 2026
  • May, 2020
  • 2019
  • 2016-2018
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