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Energy management systems (EMS) are one of the emerging technologies that enable an organization to collect real-time information on the energy use through monitoring, assessing, and visualizing energy consumption. This concept not only monitors energy consumption but also helps make data driven decisions and enhance enterprise-level operation and financial decisions. Energy management systems are gaining popularity since they help gain competitive advantage, increase productivity and reduce energy cost. In addition, the government policies toward energy conservation & the limited availability of fossils is drawing attention of the corporates. Based on geography, North America was the largest revenue-generating region in the world energy management system market in 2013. However, Asia-Pacific would be the rapidly growing market with expected revenue of $10.67 billion by 2020, growing at a CAGR of 19.1% during the forecast period 2014-2020. However, investment hurdles, longer payback period and hidden cost has restricted the growth of world energy management system market.
Numerous key players are operating in the market which include Schneider Electric, Siemens AG, Honeywell International, Inc., Elster Energy, Johnson controls, Inc., Gridpoint, Inc., IBM, C3 Energy and Others. They have adopted various growth strategies to capture a larger market share and increase their customer base. Product launches, partnerships and acquisitions are the prime growth strategies adopted by these companies to sustain the intense competition in the market.
Segment Review:
The report analyses the energy management system market based on type, verticals, end users, components and geography. The component segment includes sensors, controllers, software and others. Based on vertical, the market segments as power & energy, telecom & IT, manufacturing, retail and offices, healthcare and others. The market is also bifurcated with respect to the type of energy management systems as Home Energy Management System (HEMS), Building Energy Management System (BEMS), and Industrial Energy Management System (IEMS). Based on end user, the market segments as residential and commercial.
TOP FACTORS IMPACTING WORLD ENERGY MANAGEMENT SYSTEM MARKET
Energy Efficiency
Energy Management system is becoming a very useful tool for helping the industries, businesses and individuals to become more energy efficient. The system helps organization and individual monitor and reduce energy consumption, which will help them to reduce the electricity expenses significantly. Factors like rise in energy crisis as well as growth in industries in emerging economies like China and India are anticipated to positively affect the EMS market.
Energy-Price-Volatility
The prime source for the growth and development of an industry relies on energy that is typically derived from fossil fuels, which is nonrenewable. Energy prices fluctuate because of changes in supply and demand, extreme weather conditions and economic conditions. The consistently increasing demand for energy combined with price fluctuations are and would continue to affect company’s budget and financials. Energy management system will help companies to manage their energy consumption, monitor energy wastages and save on energy costs. With this rise in energy cost and the need for an energy efficient system, the impact of this factor on the Energy management market would grow in the future.
Improve Productivity
Energy management system with their software & hardware provides the industries the historical data analysis as well as real time data analysis, which helps them to reduce the risk of losses during production, transmission and distribution. EMS helps power transmission & distribution companies to set their operation as per the demand. Additionally, EMS is a part of smart grid & smart metering. The rapid growth of this industry is positively affecting the EMS market.
Production Cost
Companies have the maximum focus to reduce their production cost without altering quality. Operating budget for the production cycle can reduce with the help of EMS, which in turn would help businesses to reduce their production cost and the product cost. This factor will have positive impact on market EMS market in future.
Investment hurdles and longer payback period
The cost of EMS is characterized with expensive technology and high R&D cost. A company’s capital spending is highly correlated with the financial health of the company. In addition, the return on investment is steady, and may take a period of nearly 3-4 years. High investment and longer payback period act as a restraint and is expected to negatively influence the market.
Stringent Government Policies
Government as well as different organizations like WHO set new rules & regulations for different energy related perspectives. For example, government focuses on reduction of carbon emission globally. CDP (Carbon Disclosure Project), a UK based firm is consistently looking for the emissions from the industries and report is given to the Government. EMS provides solutions to use the machineries & appliances in an effective manner so that carbon emission can be reduced. Government also gives benefits to such companies who have positively reduced their carbon emission. In addition, in regions like Europe government provides support and subsidies to encourage adoption of Home Energy Management System to reduce their energy consumption. Such kind of policies encourage corporates as well as household users to use Energy Management products, thereby positively affecting the market.
Hidden cost
Any costs that are not typically included in the engineering-economic models is referred as hidden cost. The three potential sources of hidden costs of EMS are the general overhead costs of energy management, the industry specific costs with respect to the choice of an energy-efficient option; and the potential loss of utility associated with energy efficient choices. These costs increase the investment thereby making EMS even more expensive. These factors are observed to negatively affect the market.
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