Energy Management System Market Size, Share & COVID-19 Impact Analysis, By Type (System and Services), By End User (Oil & Gas, Manufacturing, Building Automation, Energy & Utilities, Automotive, Pharmaceutical, and Others), and Regional Forecast, 2020-2027

The global energy management system market size was USD 19.96 billion in 2019 and is projected to reach USD 41.97 billion by 2027, exhibiting a CAGR of 9.9% during the forecast period.

Since 2015, global energy intensity has been declining continuously, which is gradually increasing demand for energy management systems to save energy. Control over excessive energy consumption and efficient management of energy resources are the key capabilities that are accelerating the adoption of energy management solutions across the globe. Rapidly inflating energy prices are fueling the adoption of systems to reduce peak energy consumption and overall energy costs.

The increasing adoption of smart meters and smart grids are also enhancing the market value. Apart from this, governments worldwide are taking initiatives for digitizing their national energy systems to boost efficiency and their value to strengthen economic growth. Governments across various countries have directed their vision towards sustainable, secure, and affordable energy systems, which is driving substantial market growth. Moreover, stringent government policies and regulations for green and sustainable energy usage are also again reinforcing the significance of EMS.

Global energy concerns, such as optimizing the use of renewable energy sources, decreasing carbon footprint, managing greenhouse gas emissions, and energy consumption, will drive the adoption. The various energy-efficient measures and standards are enhancing the demand for a sustainable energy framework. Further, growing investments in energy-efficient smart building, smart city, or smart industry projects have animated market dynamics.   

 Demand for Industrial Energy to Exhibit Major Decline amid COVID-19 Pandemic

The global COVID-19 pandemic has severely obstructed not only industrial activities but also every single person and society. In response to reducing virus spread, a major population worldwide has been put in a nationwide quarantine and lockdown phase. The sudden outbreak of this virus has caused full or partial closures of the whole industrial activities. The closure of major industries and production plants has led to a considerable drop in energy as well as electricity demand across the world. In August 2020, the World Economic Forum (WEF) stated that energy demand across the United States, France, India, and the U.K. has been reduced by a minimum of 15% during the lockdown. Italy showcased a reduction in the demand for electricity by 75%. Thus, the COVID-19 global pandemic is adversely affecting the energy management market growth.

Remote working trends have reduced commuting needs, which are resulting in lower carbon emission. According to the ‘World Energy Investment Report’ published by the International Energy Agency (IEA) in April 2020, worldwide CO2 emission is likely to decline by almost 2.6 gigatonnes (Gt) or by 8% in 2020. Thus, the reduced community environmental impacts have slowed down the adoption of EMS. The COVID-19 pandemic has diminished the energy usage from heavy industries such as petroleum, coal, and natural gas. This has led to deflated energy demand across the key economies including the United States, Italy, Germany, the United Kingdom, and many more. Thus, the market growth has been obstructed mostly because of reduced industrial activities during the time of the pandemic.

However, the market has survived owing to increasing household energy consumption. The imposition of lockdown has increased home activities such as online shopping, remote work, powering home appliances, cooling or heating home, and streaming entertainment services. This factor suddenly has transformed the energy consumption on weekdays, which has spiked energy bills in the residential sector.  Hence, the sudden explosion in the household energy and electricity bills is likely to drive the demand for EMS.

LATEST TRENDS

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Digital Transformation of EMS is Reshaping the Energy Management Infrastructure

Digitalization has significantly contributed to the transformation of various industrial and commercial processes along with energy management. This trend of modernization of the energy models is offering superior efficiency and is also increasing its value. The digitalization of energy management processes allows for connecting and coordinating all the equipment and devices of the network, which is leading to greater efficiency gain. The digital connectivity of buildings can enable communication to the smart power grids. Besides, the digital transformation of EMS allows us to link energy data and operational data to achieve valuable perceptions about energy consumption. These perceptions can be helpful for the system operators to reduce unplanned downtime and to increase equipment reliability. Thus, the digitization of energy processes can reshape the infrastructure of EMS.

DRIVING FACTORS

Favorable Government Policies for Sustainable Energy Usage to Surge Demand

The consistent weakening of energy intensity from conventional resources such as coal has become a global concern. Governments across the world have devoted their resources towards a reasonable, secure, and sustainable energy system. Moreover, growing energy demand owing to rapid industrialization is encouraging governments across various countries to adopt efficient EMS. Besides this, growing competition between the energy suppliers and inflation in energy prices are forcing governments to increase investments in sustainable energy.

• For instance, in July 2019, the Missouri Public Service Commission (MPSC) has invested about USD 6.3 billion for energy grid modernization.

Rising environmental issues such as climate change, global warming, and the increasing frequency of natural disasters are compelling global and local energy associations to impose strict regulations for efficient energy use. For example, several states and local governments across the United States have raised their renewable energy portfolio standards for strengthening their support for clean energy. In this way, governmental initiatives towards bringing efficiency in energy consumption and management are driving substantial market growth.        

Increasing Installation of Smart Grids and Smart Meters to Boost Growth

The modernization of the energy and utility industries is ambitiously supporting smart infrastructure developments for better efficiency gains. Increasing investments into smart projects including smart buildings, smart cities, and smart farming are creating a massive demand for advanced EMS.  The rising deployment of smart meters and smart grids are also feeding the market growth. Further, advantageous features of smart grids including optimized utility bills, improved reliability, reduced cost, fraud detection, and others are enhancing the adoption of smart grids. Additionally, smart grids and meters are equipped with data and collection and analysis capabilities that can allow the extraction of valuable insights. Thus, technologically advanced smart grids and smart energy meters are anticipated to promote the progress of the market.    

RESTRAINING FACTORS 

Lack of Awareness and High Implementation Cost to Limit Adoption

The demand for energy management solutions is escalating globally. However, several small- and medium-sized industries are still unaware of the advantageous features of EMS. This factor is hindering the overall market growth. The developed infrastructure of large companies is leading them to adopt advanced energy management solutions. On the other hand, large set-up and higher implementation costs are confining the adoption across small- or medium-sized industries.

SEGMENTATION

By Type Analysis

System Segment to Hold Substantial Market Share

Based on type, the market is segregated into systems and services. The system segment will hold a large market share, whereas the services segment is expected to grow at a high CAGR during the forecast period. The Industry 4.0 revolution and factory automation are primarily driving the demand for energy systems. Easily scalable, modern ‘energy-as-a-service’ approach is helping to speed-up their implementation and enabling organizations to focus on critical business activities. Such advancements in energy management services will support the segment’s high growth rate during the forecast period.   

Based on systems, the market is further classified as home EMS, building EMS, and industrial EMS. Among these, the industrial EMS will hold a significant market share owing to the rapid adoption of automation technologies in industrial processes. Smart infrastructure development coupled with government support is driving substantial investments into residential and commercial projects such as smart buildings, smart hospitals, and smart homes. These infrastructures are escalating the demand for efficient energy systems, which is flourishing the demand for building energy management systems.

Based on services, the market is sub-segmented into monitoring & control, implementation and integration, maintenance, and consulting & training. Amongst these, the monitoring & control segment is expected to hold a significant market share. The modernization of energy processes is being supported by advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), cloud computing, big data analytics, and machine learning (ML). These advanced technologies are creating ubiquitous opportunities for data analytics and remote energy monitoring. Also, the presence of a number of smart devices, sensors, and integrated circuits into the EMS network, demands constant monitoring and controlling as well as maintenance. Thus, monitoring and control services are likely to hold considerable market share.

By End User Analysis

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Oil and Gas Segment to Showcase Higher Adoption of Energy Management Systems

In terms of end-user analysis, the market has been fragmented into oil & gas, manufacturing, building automation, energy & utilities, automotive, pharmaceutical, and others. The oil & gas industry holds a major market share owing to growing energy demand. Also, governments across the world are imposing strict regulations on the oil and gas sector for efficient energy consumption and sustainability of the environment. Implementing power management systems can offer industries considerable energy savings and reduced carbon emission in a cost-optimized way. Thus, stringent government regulations are forcing oil and gas companies to adopt advanced power management solutions. For the petrochemical and refinery industry, cost reduction is the bottom line, which can be achieved through energy management systems.

The energy and utility industry is a major source of Carbon (CO2), Sulfur Oxide (SOx), and Nitrogen Oxide (NOx) emissions. EMS provides a suitable solution to control these emissions, manage quotas, and credits, which is driving the adoption of such systems across the energy and utility industry. The developing smart building or smart city projects are massively deploying intelligent systems to reduce the enormous consumption of resources and energy in urban spaces.

REGIONAL INSIGHTS

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Geographically, the market is studied for five major regions, namely North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

North America Energy Management System Market, 2019 (USD Billion)

Presently, North America is dominating the market share and is expected to continue to dominate the market. ISO 50001 measures in support of the LEED certification are driving the adoption of energy systems across the region. Besides, energy regulations in the United States are drastically changing owing to political influences. These changing policies are directly affecting adoption. Leading companies across North America, including Microsoft Corporation, Apple, Inc., IBM Corporation, and others, are investing in developing advanced EMS solutions to reduce energy wastage. Thus, the support of industry giants to the energy-efficient infrastructure is steadily growing. Moreover, industry programs such as the North American Energy Management Pilot Program for the energy conservation of natural resources is further stimulating the market.  

Europe also holds a substantial market share owing to the growing demand for smart grid solutions to modernize the traditional power grids. Besides, the European Union is promoting various energy efficiency measures and standards, which are accelerating the demand for the power management system across Europe. 

Asia Pacific is anticipated to hold the highest CAGR during the forecast period. This growth will be fueled by the evolving sustainable energy infrastructure across the region. The development of industrial and residential architectures is creating demand for smart grid and smart metering solutions to optimize the utilization of energy. Moreover, the set-up of an ambitious sustainable energy agenda by the regional energy associations is supporting the demand for next-gen EMS solutions and services.

KEY INDUSTRY PLAYERS

 Key Players to Enhance Product Portfolios for Sustaining Their Positions

Product launches, collaborations, partnerships, and acquisitions are the key strategies adopted by the key players to compete in this market. Moreover, players are also focusing on continuous product enhancement with easy-to-operate features, which helps them to sustain competitiveness and raise their brand value. Several industry players are investing their capital in research and development activities. Various emerging players are offering superior components, integrated systems, software, and services for strengthening their market position. 

• March 2020: Yokogawa India Ltd. has acquired capital in Japan-based APB Corporation for expanding its EMS business.


• April 2019: Schneider Electric SE has extended its partnership with Carlyle Investment Management L.L.C. to develop critical infrastructure projects. The partnership is projected to offer efficient and innovative solutions meeting the desires of a promptly changing energy landscape.  

LIST OF KEY COMPANIES PROFILED :

• General Electric Co. (Boston, Massachusetts, United States)


• IBM Corporation (Armonk, New York, United States)


• Honeywell International Inc. (Charlotte, North Carolina, United States)


• Rockwell Automation Inc. (Milwaukee, Wisconsin, United States)


• Schneider Electric SE (Rueil-Malmaison, France)


• Mitsubishi Electric Corporation (Chiyoda City, Tokyo, Japan)


• Cisco System Inc. (San Jose, California, United States)


• Operation Technology, Inc. (Irvine, California, United States)


• Tendril Networks Inc. (Boulder, United States)


• Eaton (Dublin, Ireland)


• Enel X (Boston, Massachusetts, United States)


• SAP SE (Walldorf, Germany)


• Siemens (Munich, Germany)


• Mitsubishi Hitachi Power Systems, Ltd. (Yokohama, Kanagawa, Japan)


• Actis Technologies Pvt. Ltd. (Mumbai, Maharashtra, India.)


• Tata Consultancy Services Limited. (Mumbai, Maharashtra, India)


• Yokogawa Electric Corporation  (Musashino, Tokyo, Japan)


• Intel Corporation (Santa Clara, California, United States)


• Azbil Corporation (Japan)

KEY INDUSTRY DEVELOPMENTS:

July 2020 – Enbala Power Networks’ patented distributed energy control platform – ‘Concerto’ – has received certification from the OpenADR Alliance. The certification will help utility companies to better control their energy production by offering cost-effective management to meet the growing energy demand.

 February 2020 – Eaton has completed the acquisition of Power Distribution, Inc. (PDI), which was headquartered in Richmond, Virginia. The acquisition is aimed to expand the company’s product and business portfolio to better serve its data center customers.

REPORT COVERAGE

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

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