The industry will happen as a result of Energy as a Service

Energy as a service industry growth may be significantly influenced by elements like increased production and use of renewable energy. In the upcoming years, the expansion of the energy as a service market may also be fueled by an increase in building owners' efforts to lower energy costs in residential societies and an increase in innovative grid installations.

Increasing awareness of better energy management has been aided by energy as a service. Energy as a Service is a quickly expanding business model that offers various energy-related services and optimization solutions to numerous small, medium, and large-scale enterprises.


The market for energy as a service was negatively affected by the COVID-19 epidemic. The increasing number of cases caused industries that rely primarily on renewable energy sources to operate either partially or entirely shut down. This impacted both the demand for renewable energy sources and the broader market for energy services.

Energy-as-a-service, a newly developing business model, is poised to disrupt further the utility industry, which is now undergoing a significant transition as a result of decarbonization, decentralization, and digitalization.

This broad umbrella phrase refers to the expanding niche market for the sale of not only energy but also technology, analytics, individualized services, and even grid access. James Sprinz, head of decentralized energy at Bloomberg NEF, claims that there is currently a greater effort being made to create a new retail model than there has ever been in the past 100 years.

During the forecasted period of 2021 to 2031, the global market for energy as a service is expected to expand rapidly.

Big Six is entering the energy as a service market by purchasing new companies.

The majority of the Big Six energy providers in the UK have created or bought businesses that provide new services. For instance, in 2015, Centrica acquired Panoramic Power, a company that aids businesses in increasing their operational efficiency, and AlertMe, a smart technology firm that offers hardware and services for energy and home monitoring.

In fact, a Bloomberg NEF report that monitored the activity of 30 chosen companies in decentralized energy products and services found that in 2017, there was an increase in investments and partnerships in both new fields like virtual power plants and battery storage as well as in already established ones like energy management and micro-grids.

Outside competitors such as Google, with its Nest product, and startups like WATTY and ONZO are putting pressure on these businesses.

Energy as a service market's trends and opportunities

Energy as a Service market growth may be significantly influenced by elements like increased production and use of renewable energy.

In the upcoming years, the expansion of the energy as a service market may also be fueled by an increase in building owners' efforts to lower energy costs in residential societies and an increase in innovative grid installations.

The market for energy as a service may be boosted in the coming years by the growing need to lessen reliance on fossil fuels and reduce carbon emissions. Urbanization at a rapid rate may be a major factor in the future expansion of the market for energy services.

Governments all over the world are making significant efforts to raise knowledge of the advantages of utilizing renewable energy, which may enhance the demand for renewable energy and boost the total market for power as a service.

Energy as a service platform: The advantage is with the incumbents. They build strong competencies across the board in distributed energy resources, blockchain, robots, artificial intelligence (AI), and cloud technologies. They flex their muscles to control complex energy systems and provide a variety of customized, adaptable solutions. The industrial, commercial, residential, transportation, and trading sectors all look to them to set the bar for product integration. Based on their experience and portfolios, they provide additional services.

The inattentive utility company: To prevent change, established businesses "capture" government regulatory and policy-making processes. They prevent new entrants from entering the market, slow them down, or lock them out. Critical technical changes occur slowly, if at all, and new and developing technologies are constrained by network operators' vested interests. Roll-outs frequently become delayed or interfered with. Critical mass is not reached for utility-scale renewable generating and distribution. Prices remain high as businesses compete for customers on a small, commoditized range of services.

Fallen Giant: The use of behind-the-meter solutions is increasing among consumers. The system as a whole is less efficient because energy is produced and traded at the local level. For incumbents, the lack of scale results in a so-called "death spiral" wherein dropping client numbers result in declining revenues, preventing the spread of technology. A lack of upkeep plagues the infrastructure. Drop in service standards. The bare minimum in power services is what energy firms are left with.

Infrastructure Provider: New participants disrupt the value chain, including massive industrial conglomerates, oil and gas businesses, and tech firms. Offering a wide range of integrated services requires the use of digital and communications technology. The incumbents are only left with the option of providing simple billing and transmission services.

What effects might providing energy as a service have on the industry?

Nobody knows where it will go, but Professor Healey asserts that the main utilities' business models will need to shift drastically over the next five to ten years to keep up with the developments.

He continues by saying that the industry will see more new suppliers enter the market as it shifts from fossil fuel-based, centralized production to distributed, greener power, allowing them to provide services locally at a cheaper cost by utilizing local generation sources.

Charmaine Coutinho, a principal analyst for Delta-New ee's Energy Business Model Service, notes that while it is still difficult for new players and startups to break into the competitive energy market, the industry may see major tech companies capitalize on their brand recognition by expanding their energy-as-a-service offerings.

In their favor, she adds, "they have a strong grasp of data and data analytics, which is a fundamental component of energy-as-a-service."

And according to Duncan Barnes, partner at Deloitte and the UK sector lead for the Energy and Resources practice of Deloitte Digital, innovations like Google's Nest are, in many ways, a "trojan horse" for the sector.

When a consumer has this technology at home, he claims, Google becomes their agent rather than one of the Big Six. Customers currently control these devices, but algorithms may take over in the future. As a result, organizations that can effectively handle data and offer insights will flourish.

Major Market Players

The market for energy as a service is fiercely competitive, and a number of well-known players are attempting to change their product strategies, such as by introducing new products, in order to remain competitive.

Aiming to increase their market share and market presence, well-known players in the energy as a service market may team up with smaller competitors.

Siemens, Honeywell, Schneider Electric, Enei X, and EDF Renewable Energy are a few of the major companies in the market for energy as a service.

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