The global energy service market is rapidly growing in terms of revenue. In 2022, the revenue was $64.7 billion, which is expected to grow by $105.6 billion in 2027. The increase in distributed energy resources and the emergence of new streams that can fetch revenues to the utilities are contributing to the market growth of energy services. The reduction in the cost of renewable power generation and its storage, and the rise in the use of various energy-efficiency technologies that powers the demand for energy services in the coming years.
The impact of COVID-19
COVID-19 has caused an adverse impact on the world economy as the lockdown was widely implemented by governments globally to avoid the virus spreading. The impact of the pandemic highlighted the necessity for effective risk management, more resilience, and preparedness. COVID-19 created both challenges and opportunities for the energy service sector. The demand for electricity instantly dropped in India and Europe with some confinement measures. China also faced a drop in electricity demand in both January and February 2020. This instant fall in the demand for electricity had a negative impact on the energy service market.
Rise in the distributed energy resources
There are large power plants to generate electricity. The owners of these plants can be independent power producers or utilities. This electricity generated centrally will be distributed across the state-wide grids for both transmission & distribution lines, substations, and the country. The DER technologies across the world are improving, costs are decreasing leading to the evolution of grids. Many decentralized small microgrids offer greater control to the customers over the electricity source with more reliability.
The electric power industry has transformed a lot from the conventional methods, increasing the use of DER (Distributed Energy Resources) like combined power and heat, onsite solar panels, batteries, and fuel cells. The increasing demand to cut down carbon emissions from various power supplies, enhance low-cost technologies, reduce DER costs, and the impulse to instantly respond to customer expectations and requirements have led to the rise in distributed energy resource usage.
The reduction in the cost of DERs has had a positive impact on the energy service system and many utilities can reduce the energy costs of the customers by shifting from conventional resources to DERs.
Integration and distribution challenges
Some feasibility and technical considerations are essential while implementing different renewable energy sources. Several capacity challenges like limited essential raw material input supplies, restrictions on the manufacturing capacity, competition in the field of large construction project management as well as equipment, and the constraints in getting a trained workforce.
Energy efficiency stands for energy usage in the most cost-effective method, minimizing energy wastage and the whole consumption of basic energy resources. Renewable assets are experiencing technological advancements, leading to a rise in energy efficiency. The energy service market offers more flexibility to incorporate new efficiency steps over time, increasing the total savings across the portfolios of the customers.