European Energy Savings and Performance Contracting Growth Opportunities

European Energy Savings and Performance Contracting Growth Opportunities

Strategic Partnering and Innovation Culture in ESPC to Uphold Buildings’ Operational Efficiency

RELEASE DATE
09-Sep-2022
REGION
Europe
Research Code: PD6F-01-00-00-00
SKU: EN01342-EU-MT_26897
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Description

As the construction industry resumes a level of pre-pandemic operational efficiency and commercial establishments reopen, energy demand from buildings in Europe has surged. For a brief period between 2020 and early 2022, energy efficiency measures did not grow rapidly, despite enabling regulations. This period hampered the achievement of several goals related to energy efficiency. Across Europe, renovation rates for buildings stand at a meager 0.2%, but 3% is needed annually to achieve European Climate goals for 2050. As a result, huge growth opportunity awaits the European energy savings and performance contracting (ESPC) market.

The European ESPC market recorded a 1.4% growth rate in 2021 due to the COVID-19 pandemic. However, the market is likely to expand moderately at 4.4% from 2021 to 2027 in response to renewed focus on energy efficiency and regulations in each country to promote energy savings and improve living conditions.

The European ESPC market covers services such as energy audits; design and engineering; assistance in finance, equipment bidding, and acquisition; installation and commissioning; measurement and verification (M&V); and personnel training.

Energy savings contracts (ESC) contributed two-thirds of the revenue generated through ESPCs in 2021. Although ESC is set to have a higher share of the market in 2027, energy performance contracts (EPC) will register a much better growth rate of 7%. The three major countries—Germany, France, and the UK—accounted for 60% of the market in 2021 and will remain the market leaders throughout 2027. The Benelux region will register the highest growth rate, thanks to tax incentives and a heat pump mandate in Belgium and the Netherlands.

This study segments the market based on building components: lighting and controls; heating, ventilation, and air conditioning (HVAC); building automation systems (BAS); and building fabrics. By vertical market, the study looks into offices, healthcare, education, industrial, retail, hospitality, and government and public buildings.

Frost & Sullivan expects the market to experience increased convergence among allied industries such as facilities management (FM) providers; energy service companies (ESCOs); IT service providers; utilities and demand response enablers; lighting companies; and HVAC companies during the forecast period (2022–2027).

The ESPC market’s growth will revolve around initiatives such as leveraging demand response, exploring new business models, and emphasis on healthy building accreditation from renowned agencies globally.

Author: Dennis Marcell Victor

RESEARCH: INFOGRAPHIC

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Table of Contents

Why is it Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of the Top 3 Strategic Imperatives on the European Energy Savings and Performance Contracting (ESPC) Industry

Growth Opportunities Fuel the Growth Pipeline Engine™

Scope of Analysis

Scope of Analysis (continued)

Market Segmentation

Market Segmentation (continued)

Market Segmentation (continued)

Market Segmentation (continued)

Market Segmentation (continued)

Key Competitors

Key Competitors (continued)

Global Energy Efficiency Investments

ESCO Investment in Energy Efficiency

Cost Benefit Analysis of ESPC Projects

Growth Metrics

Growth Drivers

Growth Restraints

Forecast Assumption

Revenue Forecast—Total Market

Revenue Forecast by Contract Type

Revenue Forecast Analysis by Total Market and Contract Type

Percent Revenue Forecast by Country

Revenue Forecast by Country/Region

Revenue Forecast Analysis by Country/Region

Revenue Forecast Analysis by Country/Region (continued)

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Competitive Framework

Competitive Framework Analysis

Demand-side ESPC Service Players

Demand-side ESPC Service Players (continued)

Revenue by Country/Region and Contract Type

Revenue by Country/Region and Building Component

Revenue by Country/Region and End User

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast Analysis (continued)

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Metrics

Revenue Forecast

Revenue Forecast Analysis

Revenue Forecast Analysis (continued)

Revenue Forecast by Building Component

Revenue Forecast Analysis by Building Component

Revenue Forecast by End User

Revenue Forecast Analysis by End User

Competitive Environment

Growth Opportunity 1: Digitalization, Demand Response, and Decarbonization for Optimum Building Energy Efficiency

Growth Opportunity 1: Digitalization, Demand Response, and Decarbonization for Optimum Building Energy Efficiency (continued)

Growth Opportunity 2: Innovative Business Models and Technologies in Energy Management Proposition

Growth Opportunity 2: Innovative Business Models and Technologies in Energy Management Proposition (continued)

Growth Opportunity 3: Efficiency-as-a-Service (EaaS) for Smaller Energy Performance and Savings Projects

Growth Opportunity 3: Efficiency-as-a-Service (EaaS) for Smaller Energy Performance and Savings Projects (continued)

Growth Opportunity 4: Building Energy Efficiency to Boost Healthy Buildings Certifications

Growth Opportunity 4: Building Energy Efficiency to Boost Healthy Buildings Certifications (continued)

ESCO Associations in Europe

Your Next Steps

Why Frost, Why Now?

List of Exhibits

List of Exhibits (continued)

List of Exhibits (continued)

List of Exhibits (continued)

Legal Disclaimer

As the construction industry resumes a level of pre-pandemic operational efficiency and commercial establishments reopen, energy demand from buildings in Europe has surged. For a brief period between 2020 and early 2022, energy efficiency measures did not grow rapidly, despite enabling regulations. This period hampered the achievement of several goals related to energy efficiency. Across Europe, renovation rates for buildings stand at a meager 0.2%, but 3% is needed annually to achieve European Climate goals for 2050. As a result, huge growth opportunity awaits the European energy savings and performance contracting (ESPC) market. The European ESPC market recorded a 1.4% growth rate in 2021 due to the COVID-19 pandemic. However, the market is likely to expand moderately at 4.4% from 2021 to 2027 in response to renewed focus on energy efficiency and regulations in each country to promote energy savings and improve living conditions. The European ESPC market covers services such as energy audits; design and engineering; assistance in finance, equipment bidding, and acquisition; installation and commissioning; measurement and verification (M&V); and personnel training. Energy savings contracts (ESC) contributed two-thirds of the revenue generated through ESPCs in 2021. Although ESC is set to have a higher share of the market in 2027, energy performance contracts (EPC) will register a much better growth rate of 7%. The three major countries—Germany, France, and the UK—accounted for 60% of the market in 2021 and will remain the market leaders throughout 2027. The Benelux region will register the highest growth rate, thanks to tax incentives and a heat pump mandate in Belgium and the Netherlands. This study segments the market based on building components: lighting and controls; heating, ventilation, and air conditioning (HVAC); building automation systems (BAS); and building fabrics. By vertical market, the study looks into offices, healthcare, education, industrial, retail, hospitality, and government and public buildings. Frost & Sullivan expects the market to experience increased convergence among allied industries such as facilities management (FM) providers; energy service companies (ESCOs); IT service providers; utilities and demand response enablers; lighting companies; and HVAC companies during the forecast period (2022–2027). The ESPC market’s growth will revolve around initiatives such as leveraging demand response, exploring new business models, and emphasis on healthy building accreditation from renowned agencies globally. Author: Dennis Marcell Victor
More Information
Author Dennis Marcell Victor
Industries Environment
No Index No
Is Prebook No
Keyword 1 ESPC market
Keyword 2 European Energy Market
Keyword 3 Energy Efficiency Market
Podcast No
Predecessor MB27-01-00-00-00
WIP Number PD6F-01-00-00-00