Commercial Opportunities In B2C Energy Efficiency Markets
Datamonitor
February 17, 2009 29 Pages - SKU: DFMN2119899
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Introduction
Following the high wholesale and retail prices across Europe and in line with increasing public concern over climate change, considerable interest is developing in the potential for energy efficiency services to reduce growth in energy demand, thereby mitigating GHG emissions and dependency on imports.
Scope- Detailed analysis of efficiency market drivers, cost/benefit analysis of products and services and a breakdown of individual utilities' offerings
- An introduction to the European ESCO sector and examination of how firms have exploited market openings thus far
- An assessment of likely future scenarios in regard to regulatory developments and an understanding of the interplay between governments and firms
Highlights
The scope and scale of B2C energy efficiency markets is rapidly expanding, largely as result of being driven by energy prices, regulation and public attitudes.
Utility players in the B2C market have based their offerings either on information diffusion services or efficiency enhancing products. In both cases, utilities are producing increasingly sophisticated and targeted approaches, in an attempt to differentiate their product
ESCOs play a small but increasing role servicing the B2C energy efficiency sector; Supranational bodies and governments have made progress towards encouraging market development but fundamentally, consumers respond to price signals
Reasons to Purchase- Understand the B2C energy efficiency market, the products and services on offer and the business strategies utilities and ESCOs have employed
- Analyse competitor's policies, benchmark against your own options and develop a strategy for capturing greater market share
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- DATAMONITOR VIEW
- CATALYST
- SUMMARY
- ANALYSIS
- The scope and scale of B2C energy efficiency markets is driven by energy prices, regulation and public attitudes
- Energy efficiency is rising fast up the political agenda, creating market opportunities for utilities and independent players
- As 'green' issues have become politically and commercially more relevant, so energy efficiency opportunities have grown
- Cogeneration and condensing boilers offer a means of harnessing waste heat energy for alternative purposes in the home
- CHP accounts for varied rates of power generation around the world
- Loft insulation retains heat and can save the average household £100 per annum
- Compact florescent light bulbs and light emitting diodes emit the same level of light as conventional bulbs but use less power and last longer
- Around 20% of a building's heat is lost through windows, where double glazing is not installed
- White goods account for around 13% of total domestic energy consumption
- Utility players in the B2C market have based their offering on either information diffusion services or efficiency enhancing products
- Like most other utilities, Enel has positioned information campaigns at the heart of its energy efficiency drive in Italian B2C markets
- UK Utility EDF-Energy seeks to incentivize efficiency among its customers through offering Nectar points in return for adopting measures
- EDF Energy's 'Energy View' provides online analysis of consumption patterns for easy identification of potential efficiency savings
- EDF has also entered a partnership with the Ecole des Mines (a university in Paris) to research industrial efficiency technology
- In Germany, E.ON's website hosts an 'Interactive House', which presents a user-friendly guide to potential efficiency savings
- E.ON also formed a joint venture with a European specialist manufacturer to provide heat pumps as part of its central heating offering
- British Gas sells an unusually wide range of energy saving products, creating an online 'one-stop-shop' for efficiency improvements
- Energy efficiency services offerings vary between utilities
- Knowledge-based services make up the bulk of European utilities' efficiency service offerings
- ESCOs play a small but increasing role in servicing the B2C sector
- Non-utility players or ESCOs play a crucial role in addressing barriers to greater energy efficiency
- Although specialties vary, ESCOs do share a set of common attributes
- ESCOs can be broken into three groups: facilities management, community models and domestic service suppliers
- Endesa's partnership with Disenco exemplifies the potential of symbiotic utility-ESCO joint ventures
- Eaga is one of the few ESCOs focusing specifically on the B2C energy efficiency market
- Honeywell has leveraged a dominant position in the thermostat market and expanded its service offering to include energy efficiency products
- Although specializing in the B2B market, Honeywell also has a domestic service offering, focusing very specifically on domestic environmental control. This entails temperature and humidity monitoring, and alteration to ensure that energy resources are only used when required, thereby reducing energy consumption. Although this technically falls outside of the definition of 'efficiency savings', utilities and ESCOs should still consider this as an energy saving service offering. The business has clearly benefited from legislation stipulating that all new homes built in the EU must have thermostats installed.
- As well as thermostats, Honeywell has expanded into other climate control mechanisms designed to improve household efficiency. For example, the zoning system uses dampers within the building's HVAC network which open and close in order to manipulate the temperature in different rooms. This means energy does not need to be wasted on heating empty rooms.
- In a similar vein, Honeywell offers products to control the humidity within the building on the premise that this will affect how warm or cold the resident feels and in turn influence their heating needs. Again, this is not strictly an efficiency product, but is still relevant to potential energy efficiency market entrants.
- Supranational bodies and governments have made progress toward encouraging B2C energy efficiency market development but, fundamentally, consumers respond to price
- Although still in gestation, national B2C energy efficiency programs across the EU27 are slowly converging
- Energy performance certificates and similar compliance legislation offer a potential market entry point for ESCOs of any size
- Fundamentally, market forces rather than government policy will dictate the overall growth of the energy efficiency B2C market
- Governments seeking to improve efficiency will focus on high yield, low capital opportunities and eliminate price distortions where possible
- APPENDIX
- Definitions
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Figures
- Figure 1: Cogeneration produces more energy from the waste product
- Figure 2: Denmark is a global leader in adopting CHP
- Figure 3: Average Costs and Savings
- Figure 4: CFLs produce the same light levels as incandescent bulbs, with less energy (watts)
- Figure 5: Cross section of a typical insulated window
- Figure 6: BFRC window efficiency rating card
- Figure 7: Breakdown of energy consumption in average UK household
- Figure 8: EDF Energy's Nectar points webpage
- Figure 9: E.On's webpage is particularly user-friendly, making energy saving simple
- Figure 10: The heat pump cycle
- Figure 11: Fitting options for the heat pump
- Figure 12: Energy saving products from British Gas
- Figure 13: The survey informs the user which utilities have adopted what policies
- Figure 14: Matrix detailing which utilities offer which energy efficiency service (see above for key)
- Figure 15: European utilities providing specific energy efficiency services
- Figure 16: Revenue source breakdown of typical ESCO
- Figure 17: Energy efficiency savings targets by 2016 (MWh)
- Figure 18: Buildings account for 21% of global greenhouse gas emissions
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