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Energy Management - Tapping Niche Opportunities Even In Mature Markets
The Energy Management Systems (EMS) market landscape is complex and highly fragmented. EMS vendors have multiple offerings with various degrees of product complexities ranging from simple energy monitoring dashboards to complex energy management solutions with high degree of analytics involved. EMS software types can be broadly categorized under industrial energy management, utility energy management, Demand Response (DR), Enterprise Energy and Carbon Management (ECEM), residential energy management, commercial Building Energy Management Systems (BEMS), energy modeling, energy trading and risk management, Information and Communication Technology (ICT) power management, and utility bill management. Each of these EMS applications has a different adoption rate.
Utility and industrial EMS markets are mature in developed economies and have high adoption rates and higher level of market penetration than rest of the energy management applications. Home Energy Management Systems (HEMS) is still in its growing stage of market acceptance even in developed economies such as U.S. and a few big players such as Cisco, Google, and Microsoft had exited the HEMS market owing to lack of consumer interest. However, the trend is shifting towards developing two-way HEM products that can connect to a Home Area Network (HAN) and control different devices in the home and penetration of Home Energy Management (HEM) devices is expected to increase. In the U.K., the government has mandated the installation of In-Home Display (IHD) devices along with smart meters, and in Japan, the government plans to implement HEMS in each house by 2030, giving the market for HEM a boost.
DR is still a growing market and utilities in many countries such as U.S., Singapore, Great Britain, Ireland, and France are conducting projects to implement DR programs. BEMS is another growing market with significant potential in the next five years as commercial buildings account for around 40% of energy consumption worldwide and the market is still untapped as many large commercial building owners and operators are not aware of how BEMS can help save millions of dollars on energy bills. ICT power management is an emerging market with a pressing need for data center energy management. Currently, average data center energy efficiency is less than 50% and in many cases energy costs subside server costs in data centers. Cisco is a key player in this domain.
Larger players in the EMS market such as GE, Siemens, and Schneider have a comprehensive robust portfolio of products and services encompassing almost all categories of EMS applications and have a strong foothold especially in utility and industrial EMS. Smaller emerging players in other categories such as DR and ECEM with innovative technologies and niche expertise have been able to make a mark by creating value innovation for their customers.
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