Commercial Opportunities In B2C Energy Efficiency Markets

Published by: Datamonitor

Published: Feb. 17, 2009 - 29 Pages

Table of Contents

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

Abstract

• 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

• 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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