Energy Management Systems (EMS) Market

Market Overview

The global energy management systems (EMS) market size was valued at 63 billion in 2021 and is expected to reach a valuation of USD 242 billion by 2030. The market is expected to grow at a CAGR of 16% during the forecast period (2022–2030).

An energy management system (EMS) is a framework for managing energy use by energy consumers, such as industrial, commercial, and public sector organizations. It assists businesses in identifying and improving energy-saving technology, particularly those that may not require an item of significant upfront expenditure. In most circumstances, implementing an EMS successfully necessitates specialized knowledge and personnel training.

As per the International Organization for Standardization (ISO), an energy management system entails defining and implementing an energy strategy, setting attainable energy use targets, and designing action plans to achieve them and track progress. Implementing new energy-efficient technology, minimizing energy waste, or enhancing current processes to reduce energy expenses are possibilities.

The demand for energy management systems has increased due to an increase in the management of energy use across commercial, industrial, and public sector enterprises (EMS). To reduce greenhouse gas emissions, reduce potential susceptibility to changing energy prices, and increase productivity, sophisticated energy-efficient technologies should be implemented. According to figures cited by the World Resources Institute in February 2020, human-induced greenhouse gas emissions are primarily caused by energy use. Industry players may look for IoT-based solutions to optimize energy usage and manage energy flow in light of the current trend.

Market Dynamics

Energy Management Systems (EMS) Market Drivers

Favorable Government Policies and Rising Investments for Sustainable Energy

The continual loss of energy intensity from traditional fuels like coal has become a global concern. Governments worldwide have committed resources to develop an acceptable, secure, and long-term energy system. Also, rising energy demand due to rapid industrialization drives governments worldwide to implement effective energy management systems. Likewise, increasing energy supplier competition and rising energy prices are pressuring governments to strengthen investments in sustainable energy.

Climate change, global warming, and the rising frequency of natural disasters are forcing international and local energy associations to implement rigorous requirements for energy efficiency. Several states and municipal governments in the United States, for example, have increased their renewable energy portfolio mandates to demonstrate their commitment to clean energy. Government measures to improve energy usage and management efficiency are driving the growth of the energy management system market in this way.

Increased energy efficiency investments are driving the market. Various vendors in the energy efficiency field enable governments to implement such solutions, and such businesses are seeing an increase in investment. For example, As part of a funding package to EESL, the Asian Development Bank (ADB) authorized a loan of USD 250 million in November 2019 to increase its energy efficiency investments in India.

According to the Turkish energy and natural resources ministry, Turkey's public and private sectors have joined forces to invest over USD 10 billion in energy efficiency over the next ten years. Until 2033, the investment is estimated to create savings of USD 30 billion. As a result of these advancements, the demand for EMS has increased.

Increasing Installations of Smart Meters and Smart Grids

The energy and utility industries are modernizing, intending to enable smart infrastructure development for increased efficiency. Increased investment in smart projects, such as smart buildings, smart cities, and smart agriculture creates a massive demand for sophisticated energy management. The market is also driven by the heaving deployment of smart meters and smart grids.

Additionally, smart grids' benefits, such as streamlined utility bills, increased reliability, lower costs, fraud detection, and others, are boosting their implementation. Smart grids and meters also have data collection and processing capabilities to extract meaningful information. As a result, technologically improved smart grids and smart energy meters are expected to drive market growth. For example, the Missouri Public Service Commission approved a USD 6.3 billion grid upgrade project. Ameren took up the challenge, and as of February 2020, the company had completed approximately 900 projects.

Energy Management Systems (EMS) Market Restraints

High Implementation Cost and Lack of Awareness 

The demand for considerable investments to install energy management systems solutions acts as a global curb on the market's growth. Also, the need for energy management solutions is rising across the globe. However, several small and medium-sized businesses are still unaware of the benefits of energy management systems, which is restraining the growth of the global energy management systems market. Large enterprises are adopting advanced energy management solutions due to their extensive infrastructure. Large setup and implementation costs, on the other hand, are limiting uptake in small and medium-sized businesses.

Energy Management Systems (EMS) Market Trends

Digitization of Energy Management Systems (EMS)

The transformation of numerous industrial and commercial operations and energy management has been supported by digitalization. This trend of energy model upgrading provides higher efficiency while also improving its value. The digitalization of energy management processes allows all network equipment and devices to be connected and coordinated, increasing efficiency. Buildings with digital connectivity can communicate with smart power networks.

Additionally, the digital transformation of EMS allows us to link energy and operational data to provide significant energy consumption views. These perspectives can aid system operators in reducing unplanned downtime and improving equipment reliability. As a result, the digitization of energy operations can potentially change the energy management infrastructure.

Regional Analysis

The global energy management systems (EMS) market share has been segregated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America is expected to be the largest energy management systems (EMS) market over the forecast period because of its well-established network infrastructure and widespread acceptance of energy management systems in various industries such as power, retail, manufacturing, retail, and others. Because of government programs like Electricity and Monitoring Systems and Neighbourhood Oriented Brokerage, the European energy management systems (EMS) market is expected to grow steadily. The high desire to reduce energy losses in nations like Germany, the United Kingdom, and France will likely drive regional market growth.

The energy management systems market is anticipated to grow at the fastest rate in the Asia-Pacific. Rebates, tax advantages from various authorities, and rapid industrialization throughout the region, particularly in China and India, will likely boost sales even further. The Middle East and Africa are also expected to see significant growth. Large population increase and increasing industrialization are just two factors driving energy management systems growth in the MEA.

As environmental issues have grown, Middle East has consistently improved efficiency through sustainable development and energy usage. Dubai, for example, has implemented Energy Strategy 2030 program to control energy usage and cut significant carbon footprints efficiently. Similar initiatives are expected to be implemented in Jordan and Saudi Arabia and develop a legislative framework to encourage clean, practical, and energy-efficient developments.

Similarly, the National Cleaner Production Centre (NCPC) in South Africa is working on increasing the adoption of energy-efficient technology in various businesses. Additionally, the government has implemented the Energy Efficiency Tax Incentive Program to save energy per Kilowatt-hour equivalent for certain companies. Tax advantages, encouraging government initiatives, and the necessity for firms to maintain a clean atmosphere are important drivers pushing energy management systems adoption across industries.

As EMS gathers traction in the region, industry participants are expected to open doors in the U.K., France, Italy, and Germany. Adopting a buoyant energy policy is the leading cause of the increase. The European Commission (comprising all 27 EU member states) pledged in July 2021 to cut emissions by at least 55% by 2030. The U.K. government also asserts that by 2050, all buildings will have low-carbon heating; by 2025, around 700,000 dwellings will have renovated. Governments will prioritize reducing energy use to reduce energy prices and emissions; this development could increase Europe's market share for energy management systems.

The Middle East and Africa are also expected to see significant growth. Large population increases and increasing industrialization drive energy management systems growth in the MEA. As environmental issues have grown, the Middle East has consistently improved efficiency through sustainable development and energy usage. For example, Dubai has implemented the Energy Strategy 2030 program to control energy usage and efficiently cut significant carbon footprints. Similar initiatives are expected to be implemented in Jordan and Saudi Arabia and develop a legislative framework to encourage clean, practical, and energy-efficient developments.

Similarly, the National Cleaner Production Centre (NCPC) in South Africa is working on increasing the adoption of energy-efficient technology in various businesses. Additionally, the government has implemented the Energy Efficiency Tax Incentive Program to save energy per Kilowatt-hour equivalent for certain companies. Tax advantages, encouraging government initiatives, and the necessity for firms to maintain a clean atmosphere are important drivers pushing energy management systems adoption across industries.

Segmental Analysis

The global energy management systems (EMS) market share has been classified based on product, component, end-use, and regions.

The energy management systems (EMS) market has been segmented into industrial energy management systems (IEMS), building energy management systems (BEMS), and home energy management systems (HEMS) based on products. The industrial energy management systems (IEMS) segment is expected to dominate the global market during the forecast period. EMS has a significant market share in the industrial sector, particularly in the manufacturing and power industries, for monitoring real-time power consumption patterns and lowering costs. 

The building energy management systems (BEMS) product segment is expected to rise significantly throughout the forecast period, owing to the increased deployment of the system in business parks, hospitals, shopping malls, IT businesses, and other commercial locations. Manufacturers' growing understanding of smart energy management and electricity saving is propelling this segment along.

With rising energy consumption as a backdrop, the Home Energy Management Systems (HEMS) market is anticipated to display an excellent CAGR. According to the EIA's Annual Energy Outlook 2015, household consumption may increase by 0.3% annually through 2040. Home energy management systems are expected to be supported by energy optimization solutions, such as a smart home's electrical board and software that detect energy consumption.

The home sector continues to utilize energy primarily for space heating, air conditioning, water heating, lighting, and appliances, which suggests that smart devices, such as smart sensors and smart meters, could acquire more popularity in the coming years. The need for home energy management systems is expected to increase as the number of energy-saving gadgets increases.The energy management systems (EMS) market has been segmented into controllers, batteries, sensors, software, display devices, and batteries based on components.

The energy management systems (EMS) market has been segmented into controllers, batteries, sensors, software, display devices, batteries, and others based on components. The software component segment is expected to dominate the global market during the forecast period. Over time, one of the industry's significant accomplishments has been integrating software of data analytics into current modules. Companies like BuildingIQ and Ecova have created industry-specific platforms for software that allow businesses to run programs and algorithms for better results. Thus, higher software adoption in energy management systems is likely to drive market growth.

The energy management systems (EMS) market has been segmented into telecom & IT, power & energy, retail & offices, healthcare, manufacturing, and others based on verticals. The power & energy segment is likely to dominate the global market during the forecast period. The increased need for energy consumption monitoring in several sub-sectors, such as power generating, oil and gas, chemical, and petrochemical complexes, has led to the monetization of energy management system modules in several industries.

Due to several organizations’ energy-efficiency management measures, the retail & offices segment is anticipated to rise at the fastest rate over the forecast period. Over the forecast period, growing awareness of the advantages of management of energy and growing businesses using it to improve efficiency and reduce the cost of operations will drive growth.

Impact of covid-19

COVID-19 had a significant impact on the global economy and all businesses worldwide. To stop the pandemic from spreading, governments around the world instituted lockdowns. The complete global lockdown severely disrupted people's livelihoods and quality of life in several countries' early pandemic stages. The global residential power sector experienced significant growth due to quarantines, whereas industrial energy demand fell significantly in the first quarter of 2020.

Major power projects and government projects, on the other hand, were expected to proceed as planned, as they represent important national infrastructure. As a result, such projects are regarded necessary. Despite the COVID-19 pandemic, DEWA resumed the AED 1.5 billion grid upgrading project in April 2020. Multiple energy management software suppliers were also strengthening their services due to the COVID-19 impact. Honeywell, for example, announced an integrated set of solutions in May 2020 to assist building owners in improving the health of their building environments and energy efficiency. 

Over the forecast period, such breakthroughs and services are expected to retain a constant demand. ​​

Market Recovery Timeline and its Challenges

The post-pandemic period will be pivotal for the global energy management systems (EMS) market. As the pandemic passes, the global market will begin to reclaim its supremacy as a valuable service sector. High capital investments and a lack of awareness about the advantages of EMS are expected to stifle market growth. Otherwise, the global energy management system market will recover more quickly than other industries.

Recent Developments

• In December 2022, The 2023 CES Innovation Award honoree is the Wiser Home Energy Management App from Schneider Electric.
• In November 2022, Schneider Electric Announces Expanding Offerings for Grid and Energy Sector Participants Pursuing Clean and Secure Energy
• In December 2022, Strategic Alliance to Speed Up Adoption of Enterprise AI by Federal Agencies and the Department of Defense Announced by C3 AI and Booz Allen Hamilton.
• In September 2022, Introducing a New ESG Application from C3 AI.
• In August 2022, Emerson Ventures Contributes Strategically to Spearix