Energy Consumption Market

Global Energy Consumption Market Size (2024-2029)

The size of the global energy consumption market was worth USD 0.95 Billion in 2023. The global market is anticipated to grow at a CAGR of 4.88% from 2024 to 2029 and be worth USD 1.27 billion by 2029 from USD 1.0 billion in 2024. 

Market Drivers

Increasing concentration on integrating renewable energy, distributed generation, energy storage, thermally activated technologies, and demand response into the electricity distribution and transmission system has enabled more investment in renewable energy, which is majorly driving the demand for energy in the energy consumption market.

Growing demand for renewable energy is driving the energy as a service market growth. Consistent with the report on Global Trends in Renewable Energy Investment 2019 published by the United Nations Environment Program, global investment in renewable energy in 2018 increased to USD 272.9 billion, the fifth successive year where the shares exceeded USD 250 billion. Growing investment in storage solutions is additionally augmenting this market. As an example, in September 2018, the Planet Bank group announced a program to take a position of USD 1 billion to accelerate investments in battery storage for energy systems in developing countries. This program aims at ramping up the utilization of renewable energy to enhance energy security, increase grid stability, and expand access to electricity. According to Bloomberg New Energy Finance (BNEF), the energy storage market is expected to grow to a cumulative 942 GW by 2040, attracting an investment of USD 610 billion. Hence, increasing investment in storage solutions and renewable energy sources will fuel the market during the projected period. Energy demand is increasing day by day due to growing industrialization and urbanization. Wind and solar plants are geographically spread in large areas. Investment in renewable capacity in 2018 was about three times the worldwide investment in coal and gas-red generation capacity combined. The Energy Information Administration (EIA) forecasts that renewables will account for nearly half—49%—of global electricity output by 2050. Increasing population and growing urbanization rates are likely to extend energy demand across the globe. According to the United Nations report, in 2018, 57% of the world’s population lived in urban areas, which is projected to extend to 69% in 2050. Hence, the increasing potential for renewable energy and increasing energy demand across different sectors will drive the demand for the energy consumption market during the forecasted period.

Market Restraints

The transformation of existing grid infrastructure improves the capabilities of the electricity delivery systems, which is driving the energy consumption market growth.

As per the Institute of Energy Economics and Financial Analysis, India needs an investment of USD 60-80 billion over subsequent years in grid infrastructure to realize its tremendous growth in renewable energy capacity. Electric utilities have planned to take a position of USD 3.2 trillion globally in new and replacement transmission and distribution infrastructure. This infrastructure investment is going to be necessary thanks to growing electricity demand, aging assets, and new power generation projects, including intermittent renewable resources that are straining the grid. Hence, the growing need for transforming grid infrastructure, which is mainly driven by significant investment, hampers the energy consumption market growth during the forecast period.

Market Trends

Aging infrastructure for generating and transmitting power has forced utilities to take a position and upgrade the policies for distributed energy resources (DER). Distributed energy resources include renewable energy, demand-response capabilities, and other energy-saving technologies to reduce and control energy use and better manage bills. Increasing investment in energy distribution systems would create demand for DER, which can help to propel the market. For instance, the California Public Utilities Commission (CPUC) has planned to take a position of USD 9 billion over the subsequent three years on upgrades to its electric distribution system and enhancing its capabilities to work the system. Hence, the growing need for distribution systems and significant investment to improve grid efficiency is predicted to drive the demand for energy consumption in the upcoming years.

To achieve improvement in efficiency and rapid scale-up, a stable and supportive policy framework is required to reinforce grid stability and uphold energy-saving potential. Consistent with International Energy Agency's (IEA) Energy Efficiency 2018 report, energy efficiency investment increased by 3% to USD 236 billion in 2017. Hence, growing investment prospects alongside regulatory support are driving the demand for these services. The US framed the National Action Plan for Energy Efficiency, which establishes a goal to achieve cost-effective energy efficiency by 2025. Hence, supportive government regulations for energy efficiency projects are likely to drive the demand for energy consumption during the projected period.

COVID-19 Impact on the Energy Consumption Market

The outbreak of the COVID-19 pandemic is affecting the power industry on a large scale. An exponential decrease in power consumption, investments in commissioning new grid expansion projects, and a significant impact on the renewables sector are the main factors contributing to the prolonged downturn in demand due to the spread of the novel coronavirus.

 REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Energy Consumption Market Analysis By Type

The energy consumption segment is anticipated to hold the most important market share by 2024. With the increasing prices, consumers are looking to acquire a resilient energy supply to make sure that they will operate without the grid. Also, with the growing specialization in various energy supply sources like renewable, fossil fuels, nuclear, biomass, and biofuels, the energy as a service model mainly supports renewable energy because it decreases energy costs, ensures high energy efficiency, reduces carbon footprint, and is environment-friendly. It gives consumers the flexibility of choice on pricing, ownership, and financing. It also helps the operators customize energy generation designs supported by consumer requirements, which are modern and robust. It enables rapid and easy integration of distributed generation and energy storage assets.

Global Energy Consumption Market By Analysis End User

The energy as a service market by end-users is classified into industrial and commercial users. The commercial segment includes establishments like healthcare, educational institutions, airports, warehouses, leisure centers, hotels, data centers, and others. As per the American Council for an Energy-Efficient Economy, these establishments account for about 19% of the energy consumed within the US. More than half the energy employed by commercial buildings goes toward heating and lighting. The commercial segment is predicted to carry the most important market share and, therefore, the fastest-growing market, with energy service implementations being mandated across global regions within the commercial sector. This is often mainly due to significant structural impacts, namely, the economic process. Furthermore, commercial consumers will have access to their energy efficiency through energy as a service which will, in turn, help them improve their energy consumption.

REGIONAL ANALYSIS 

The energy consumption market in North America is estimated to be the biggest from 2019 to 2024. Utilities in countries like the US, Canada, and Mexico are implementing energy efficiency projects and are looking to chop down energy generation costs. New approaches like pay-for-performance are being introduced within the US to realize energy efficiency at a bigger scale within the commercial sector. For instance, in California, energy efficiency policies have mandated that a minimum of 60% of the savings achieved in obligation schemes got to be delivered by third-party service providers. Also, a rise in the share of renewable power generation and energy efficiency activities is predicted to drive the market in this region.

KEY PLAYERS IN THE GLOBAL ENERGY CONSUMPTION MARKET

The global energy consumption market is concentrated with well-established players. Key players in the market include Schneider Electric (France), Engine (France), Siemens (Germany), Honeywell (US), Veolia (France), Enel X (Italy) and EDF Renewable Energy (California)

RECENT HAPPENINGS IN THE MARKET

• In May 2019, Engie was awarded an energy-efficient performance contract by UAC Berhad. The agreement was signed to enhance the energy efficiency of the compressed gas system at UAC. ENGIE tends to strengthen its capabilities for energy as a service.

DETAILED SEGMENTATION OF THE GLOBAL ENERGY CONSUMPTION MARKET INCLUDED IN THIS REPORT

This research report on the global energy consumption market has been segmented and sub-segmented based on type, analysis end-user and region.

By Type

• Energy Supply Services
• Operational and Maintenance Services
• Energy Efficiency and Optimization Services 

By Analysis End User

• Commercial
• Industrial

By Region

• North America
• Europe
• Asia Pacific
• Rest of the world