New Datamonitor research forecasts that energy management expenditure will grow by 80% to 2005.
According to Datamonitor’s research conducted in January-April 2001 and covering nine of Europe’s largest energy markets, one in five major energy users currently purchases energy-saving services, software, or hardware products in a bid to decrease their energy expenditure. While many more users procure such products and services in-house, the efficiency of energy management solutions tends to be much higher if they are outsourced.
Margins in industrial and commercial (I&C) supply will decline across Europe in the next two years, leading to end-user prices converging, and the savings currently available through switching supplier disappearing. In parallel to that, EU governments will continue imposing strict emissions controls, in large part by taxing energy consumption, a recent example of which was the introduction of the Climate Change Levy in the UK at the end of March this year. Therefore, major energy users are becoming increasingly serious about cutting down on energy wastage by stepping up their use of energy management solution.
As a consequence, almost twice as many I&C users plan to outsource their energy management requirements by the end of 2005 as in 2000. Based on Datamonitor’s proprietary Energy Wastage Model, this translates into annual energy management expenditure of E8.4 billion by the end of that period, compared with E4.7 billion last year. By making that investment, Europe’s major energy users will make annual energy savings of up to E4 billion, a 50% increase on 2000.
At present, the bulk of energy management products outsourced by I&C users comes from dedicated energy management providers and product manufacturers. However, utilities will represent an increasing share of that market, driven by consumers’ desire for ‘one-stop shop’ energy solutions and the utilities’ own interest in new revenue and profit opportunities.
