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, 2022-2029

The global energy management system market size was valued at USD 24.73 billion in 2021. The market is expected to grow from USD 27.31 billion in 2022 to USD 60.54 billion by 2029, exhibiting a CAGR of 12.0% during the forecast period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 9.3% in 2020 compared to 2019.

In the scope of the study, we have considered solutions such as EcoStructurePower Design, Electrical Calculation Tools, SIMATIC Energy Management, and Advanced Energy Management System, among others. The increasing adoption of smart meters and smart grids play a vital role in 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, driving substantial market growth. Moreover, stringent government policies and regulations for green and sustainable energy usage reinforce the significance of energy management.

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

COVID-19 IMPACT

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

The global COVID-19 pandemic has severely obstructed industrial activities and livelihood of the society. Key players operating in the market recorded a significant decline in their revenues due to the COVID-19 pandemic. 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 U.S., France, India, and the U.K. had 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 adversely affects energy management market growth.

Remote working trends have reduced commuting needs, resulting in lower carbon emissions. 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 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 U.K., and many more. Thus, the market growth has been obstructed mostly because of reduced industrial activities during 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 energy management.

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 offers superior efficiency and is also increasing its value. The digitalization of energy management processes allows for connecting and coordinating all the network's equipment and devices, which leads 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 energy management.

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 due to rapid industrialization encourages governments across various countries to adopt efficient energy management system. Besides this, growing competition between the energy suppliers and inflation in energy prices are forcing governments to increase investments in sustainable energy.

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 U.S. have raised their renewable energy portfolio standards for strengthening their support for clean energy. In this way, governmental initiatives towards bringing energy consumption and management efficiency are driving the energy management system 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, creates a massive demand for advanced energy management. The rising deployment of smart meters and smart grids also feeds 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 extract 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 energy management. 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 setup and higher implementation costs are confining the adoption across small and medium-sized industries.

SEGMENTATION

By Type Analysis

System Segment to Grow Steadily During Forecast Period

Based on type, the market is segregated into systems and services. The system 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. The industrial energy management will hold a significant energy management system market share among these due to the rapid adoption of automation technologies in industrial processes. Smart infrastructure development coupled with government support drives 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. The monitoring & control is expected to hold a significant market share among these. 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 create 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 a 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 emissions in a cost-optimized way. Thus, stringent government regulations force 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. Energy management system provides a suitable solution to control these emissions and manage quotas and credits, 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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The global market scope is classified across five regions, namely North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

Presently, North America dominates 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 U.S. 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 are 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, 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 energy utilization. Moreover, the regional energy associations' set-up of an ambitious sustainable energy agenda supports the demand for next-gen energy management solutions and services.

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The market in Latin America and the Middle East & Africa is expected to grow moderately during the forecast period. These regions are inclined towards the development of smart cities and reducing carbon emissions, due to which they adopt smart technologies to reduce such harmful gaseous emissions.

KEY INDUSTRY PLAYERS

Key Players to Enhance Product Portfolios for Sustaining Their Positions

Product launches, collaborations, partnerships, and acquisitions are key strategies the key players adopt 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.

December 2021 – General Electric acquired Opus One Solutions Energy Corporation, a software company that helps optimize energy planning and operations. This acquisition will help General Electric to plan, optimize, and trade renewable and Distributed Energy Resources (DERs) to empower a modern grid.

March 2020 – Yokogawa India Ltd. acquired capital in Japan-based APB Corporation to expand its EMS business.

List of the Key Companies Profiled:

• General Electric Company (Massachusetts, U.S.)


• IBM Corporation (New York, U.S.)


• Honeywell International Inc. (North Carolina, U.S.)


• Rockwell Automation Inc. (Wisconsin, U.S.)


• Schneider Electric SE(Rueil-Malmaison, France)


• SAP SE (Walldorf, Germany)


• Siemens (Munich, Germany)


• Eaton (Dublin, Ireland)


• Mitsubishi Electric Corporation (Tokyo, Japan)


• Cisco System Inc. (California, U.S.)

KEY INDUSTRY DEVELOPMENTS

• August 2021 – Mitsubishi Electric Corporation has completed the acquisition of U.K. based Smarter Grid Solutions (SGS). The acquisition is aimed to strengthen the company’s distributed energy resources management solutions.


• 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.

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

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