Energy Management System Market Overview
The global energy management system market was valued at $39,520.0 million in 2017 and is forecasted to witness a CAGR of 19.3% during 2018–2023. Volatility in energy prices, stringent government policies, and rising power consumption are the key factors driving the growth of the energy management system market. Besides, the rising need of companies to tackle the issue of energy wastage as well as the growing emphasis on efficient energy generation and power storage would propel the market growth in the coming years.
On the basis of vertical, the market has been classified into power and energy; telecom and IT; manufacturing; office and commercial buildings; education; retail; healthcare; residential; and others, wherein “others” include banking, financial services, and insurance (BFSI); hospitality; and government. Of these, power and energy held the largest share, of 19.3%, in the energy management system market in 2017. This can be attributed to the growing need for having operational control and greater visibility of transmission networks as well as reducing their operational costs.
Moreover, the growing popularity of smart grids and smart meters is providing growth opportunities to the EMS solution vendors in the market. Some of the EMS solutions provided in the power and energy vertical are PowerOn Reliance EMS offered by General Electric Company and Spectrum Power by Siemens AG.
Based on application, the market has been categorized into industrial energy management (IEM), building energy management (BEM), and home energy management (HEM). Among these, IEM is expected to continue dominating the energy management system market during the forecast period. Steel plants, refineries, cement plants, and chemical and petrochemical plants are some of the end users that utilize EMS, as the amount of energy consumed by these industries is significant. The system helps these industries to reduce their carbon footprint and production cost, thereby resulting in increased profits.
On the basis of solution, the energy management system market has been classified into carbon energy management, demand response management, and utility billing and customer information system. Among these, carbon energy management held the largest share in the energy management system market in 2017, which can be mainly attributed to government initiatives and policies, across the globe, to improve energy efficiency and reduce carbon emissions. Thus, companies are increasingly opting for this solution to monitor their energy consumption in order to reduce their electricity costs and carbon footprint.
According to the International Energy Agency (IEA), the global energy demand increased by 2.1% last year, more than twice the previous year’s rate, to reach to 14,050 million tons of oil.
Based on device, the energy management system market has been categorized into in-house display, smart thermostats, smart plugs, and load control switches. During the forecast period, the market is expected to register the fastest growth in the category of load control switches. This can be mainly attributed to the growing demand for these devices for the convenient management of energy consumption. Besides, the robust demand for load control switches in the industry can be ascribed to their messaging capabilities and the ability to protect equipment against the damage caused by brownouts.
Energy Management System Market Dynamics
Increasing focus on the upgradation of power grids to smart grids is being witnessed in the energy management system market. The electric power system is undergoing a radical transformation, globally, due to the use of new information and communication technologies (ICT) to decarbonize the electricity supply by replacing aging assets and controlling the natural resources.
Smart grid systems enable customers to better monitor, control, and analyze their energy consumption. Data provided by smart power meters allow consumers to automate billing data collections and detect device failures. Smart grids feature intelligent systems that can predict energy consumption requirements based on the customer’s pre-set preferences. This leads to reduction in peak loads, which have an impact on electricity generation costs. For instance, companies such as Siemens AG provide energy automation and smart grid solutions for distributed energy systems to integrate renewable energy sources and aging grid infrastructure.
Rising adoption of EMS solutions in building automation, backed by government support, is a key factor driving the energy management system market. Most of commercial consumers are aware of their soaring energy costs and are, therefore, increasingly adopting EMS solutions to reduce these costs. These solutions help organizations in optimizing building performance by facilitating full control over building’s energy consumption and costs involved. In advanced markets, such as North America, governments are running certain energy usage-related programs to make end users realize the benefits of the EMS.
Moreover, governments in regions such as APAC and MEA are trying to showcase the benefits of EMS via social media and are even considering passing laws and regulations on the same, to drive adoption. Over the past couple of years, there has been a noticeable increase in the certification of buildings under the “green” standards due to emphasis on energy efficiency.
High demand for EMS solutions in emerging economies, such as India and China, is expected to offer growth opportunities to the market players. The energy management system market, in recent years, has witnessed consistent rise in R&D efforts by the market participants and high adoption among the end users, due to the growing demand for efficient energy sources as an alternative to traditional energy sources.
Countries such as India and China are witnessing an increase in urban population due to growing industrialization, which, in turn, is resulting in the rise in demand for electrical energy. Therefore, the growing demand for power has created ample growth opportunities for the players operating in the energy management system market to offer solutions that can help monitor and minimize the wastage of energy.
Energy Management System Market Competitive Landscape
Schneider Electric SE, Siemens AG, Honeywell International Inc., and Johnson Controls International PLC were the leading players in the global energy management system market in 2017. These companies have diversified businesses and can pull investments from their other businesses to expand their market share. This makes it difficult for other small regional players to sustain in the rapidly growing market. Apart from these players, the market has a presence of few local small and mid-sized companies, which together accounted for the remaining market share in 2017.