February 2, 2012

While the energy service company (ESCO) industry has been active for approximately 30 years, it continues to evolve in response to business opportunities and economic trends.  Today, newer service offerings, such as demand response and energy management software, enabled by intelligent metering and control systems that afford customers greater flexibility and control over their energy usage, are opening new opportunities for ESCOs.  According to a new report from Pike Research, the ESCO market for energy efficiency project installations and services in the United States exceeded $5.1 billion in 2011.  Driven by public policies that encourage a greater emphasis on energy efficiency to reduce costs and improve operations, this market is expected to continue to grow faster than the domestic economy and reach at least $13 billion in sales by 2020.  Under a more aggressive scenario, the ESCO market could reach $16 billion by 2020, the cleantech market intelligence firm forecasts.

“The full impact of recent federal stimulus funding has yet to be realized,” says research analyst Brittany Gibson.  “But the American Recovery and Reinvestment Act of 2009 has directed billions of dollars into energy efficiency projects at all levels of government and in all geographic regions of the nation, driving increased investment and accelerating innovation among ESCOs.”

The ESCO market predominantly takes the form of direct contracting between providers of energy efficiency services and equipment and government agencies, public institutions, and commercial customers – typically via performance-based contracts, wherein funding for individual projects is based on a promise of “guaranteed savings” to facility owners/managers.  In particular, the federal sector’s appetite for this energy service performance contract model is growing, helping give rise to a market structure dominated by a group of very large companies that specialize in these contracts.  At the same time, project sizes are increasing as clients look for more comprehensive technologies and designs to address their energy consumption.  Of particular significance for ESCOs is President Obama’s 2009 executive order, which mandates that all federal agencies must achieve a 30% reduction in energy use by 2015. 

Pike Research’s report, “The U.S. Energy Service Company Market”, describes the continuing evolution of the ESCO market, detailing drivers and barriers to deeper penetration of energy efficiency in the U.S. economy.  The study focuses on the role that performance contracting is playing as a vehicle for financing efficiency projects for public entities that face budget and credit limitations, as well as the convergence of new technologies and service offerings into traditional energy conservation projects.  Key industry players are profiled in depth and market forecasts extend through 2020.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com

February 1, 2012

Today Pike Research announced the launch of its new Smart Grid IT Advisory Service, a subscription-based information tool that provides market intelligence and strategy insights for utilities, grid operators, investors, and vendors active in the emerging software and services market for smart grids.  As new power, sensor, and information technologies continue to build momentum, bringing with them exponential data growth, new business models, and requirements for further transformation, the challenge of effective business analysis and strategy development in an increasingly disruptive market environment will place enormous demands on utilities’ supporting information infrastructure.  Those demands will lead to increasing market opportunity for companies supplying IT and services to the leading players in the emerging smart grid ecosystem.

“The arrival of the smart grid brings a new level of complexity as silos of operations are broken down and new capabilities emerge based on large-scale information management, real-time data analysis, and the move to closed-loop systems for managing, monitoring, and controlling the smart grid,” says research director Eric Woods.  “Applications such as outage management and asset management are also being radically overhauled by the integration of IT and operational technology (OT).”

As part of the Smart Grid IT service, Pike Research’s industry analysts offer timely and actionable market insights, covering specific technology and business sectors as well as overall market conditions and trends.  Research reports include an in-depth examination of business models, technology issues, policy and regulatory factors, the competitive landscape, and market sizing, segmentation and forecasting. 

Pike Research’s key findings and forecasts about the emerging Smart Grid IT sector include the following:

• Many of the largest utilities have already begun an overhaul of their CIS and billing systems, and as this wave intensifies, it will begin to penetrate the next tier of utilities over the next several years.  Such systems upgrades will impact utilities representing 90 million electricity customers in the U.S. by 2015.
• The expansion of smart grid deployments is leading to significant growth in the market for meter data management systems and related professional services, which will push worldwide MDM market revenue from $52 million annually in 2011 to $490 million by 2018.
• The use of social media as a primary vehicle for customer interactions with their utilities is rising swiftly.  Approximately 57 million customers worldwide will use social media to engage utilities in 2011, a number that will rise to 624 million customers by the end of 2017.  Utility spending on social media, meanwhile, will increase to $317 million in 2017.
• By aligning business strategy, processes, and information assets, enterprise architecture can deliver better business decision-making, business-IT synergy, resource utilization, governance control, and speed to innovation, making it essential to utilities’ efforts to create a long-term roadmap and adjust effectively to the future smart grid.
• Some of the biggest innovations in smart grid IT are being driven by new application requirements such as electric vehicle charging systems, demand-side management applications, and distributed generation  management, including virtual power plants and microgrids.
• Interest in virtual power plants (VPPs) is gaining significant momentum within the industry, and VPP capacity will increase by 65% between 2011 and 2017, rising from 55.6 gigawatts (GW) to 91.7 GW worldwide during that period.

Pike Research’s Smart Grid IT Advisory Service covers a wide range of utility IT systems that are enabling the smart grid, from back office to customer premises. Research topics include smart grid data analytics, customer information systems, distribution management systems, cyber security, meter data management, managed services, and many more. Our analysis comprises market drivers and barriers, business models, technology issues, and the emerging competitive landscape for IT systems and services in the smart grid world.  Key industry players are profiled in depth, and detailed forecasts are provided for each key market segment.  Executive Summaries and further information about the Advisory Service are available for free download on Pike Research’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 31, 2012

Significant changes in the regulatory structure of the 125-year-old electric utility industry have allowed for competitive sales of electricity by a new set of restructured retail power sellers and service providers.  As a result, the past decade has seen a steady increase in commercial and industrial (C&I) customers that are able to purchase electricity from sellers other than their incumbent utility.  Since the California power crisis a decade ago, though, no additional state has opened its market to competitive providers.  In fact, several states and regulators have imposed limits and financial requirements, as well as increased their scrutiny of competitive players, with the goal of protecting consumers.  According to a recent report from Pike Research, the competitive market is poised for further growth in the coming decade, as competitive electricity purchases will nearly double from $29.4 billion in 2009 to $55.9 billion by 2020.  Regulatory policy, however, remains the single biggest limiting factor on the development of an open and competitive market for electricity supplies to commercial and industrial customers.

“Even though some 20 jurisdictions have enacted restructuring laws and policies designed to open their electricity market to new competitors, only about a dozen states allow for full-scale access to competitive markets for all customers,” says vice president of research Bob Gohn.  “Even in these states, laws and regulations tend to impose costs that are meant to ensure that expenses caused by the departure of other customers to competitive suppliers are not passed on to customers who remain with incumbent providers.”

A decade after suspending new retail competition in the wake of the power crisis, California has begun opening the door slightly to further access to competitive providers in regulated utility territories.  Because the Californian market is so large, this will have a significant impact on both the total national market and other states’ general perception of how much pent-up demand there is for competitive supplies.  There are no indications that states that have previously avoided restructuring have intentions to reexamine their policies. However, several other states that have frozen their efforts may restore competitive options for larger customers.  In particular, Arizona and Michigan represent strong potential markets for competitive procurement.

In general, increases in market activity will take place over the next five years in states that already have favorable policies, and in the 2015-20 period for areas that still need to reexamine their policies.

Pike Research’s report, “Corporate and Institutional Procurement of Electricity”, examines the critical role that electricity plays in commercial and industrial operations, explores the motivations for seeking non-utility and green power among a variety of business types, and identifies existing policies that promote competition – as well as barriers that may inhibit further access to competitively priced power.  The report includes profiles of key industry players and forecasts for the competitive electricity market through 2020.  An Executive Summary of the report is available for free download on the firm’s website.

Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 31, 2012

As green building practices become more commonplace in the global construction industry, the goal of designing zero energy buildings, or buildings that consume as much energy as they produce through on-site and renewable energy systems, has emerged as the next major frontier.  A number of countries and regions have already established long-term targets and regulations requiring zero energy building construction that will come into effect over the coming years, some as soon as 2016.  These stringent regulations will accelerate adoption around the world, causing the industry to undergo a significant transformation in the coming years.  According to a new report from Pike Research, worldwide revenue from zero energy buildings will grow rapidly over the next two decades, reaching almost $690 billion by 2020 and nearly $1.3 trillion by 2035.  That represents a compound annual growth rate of 43%, with much of that growth occurring in the European Union.

“Following the surge in LEED and other green building certifications worldwide over the last few years, zero energy building has emerged as the ‘holy grail’ in green building design,” says research analyst Eric Bloom.  “Technically, zero energy building design is feasible for many building types in many regions, but concerns about the upfront cost continue to impede it in the market.”

The most noteworthy of the new regulatory regimes is in Europe, where the European Union’s Energy Performance of Buildings Directive (EPBD), which governs EU building energy codes, will require nearly zero energy construction in public buildings by 2019 and in all new construction by 2021.  The exact language of these new building codes is still being established, but it is clear they will drive significant investment in zero energy building technologies over the next few decades.  Similar regulations have come into effect or are being discussed in the United States and Japan.  While the technologies required to make zero energy buildings possible, such as efficient lighting and HVAC systems, improved insulation, solar photovoltaic and other systems, can add significant upfront cost, advances in energy efficiency and renewable energy technologies will improve system performance and reduce costs.

Pike Research’s report, “Zero Energy Buildings”, provides data on the size and growth of the market for zero energy building markets, including HVAC systems, glazing systems, wall and roof construction, renewable energy systems, and construction soft costs, from 2011 through 2035.  The study also includes a qualitative assessment of major drivers and trends for zero energy buildings in key markets, including both commercial and residential zero energy buildings.  It also provides a discussion of the individual technology elements associated with zero energy building, as well as the design challenges that the AEC (architecture/engineering/construction) service providers will face in delivering zero energy buildings.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 30, 2012

Microgrids, or integrated systems in which distributed energy resources (DERs) operate as a single, autonomous grid either in parallel to or isolated from the existing utility power grid, offer customers and distribution utilities a host of new ways to bolster reliability and manage variable, bidirectional resources.  In addition, their smaller scale results in far fewer line losses, a lower demand on transmission infrastructure, and the ability to rely on more localized sources of power generation.  All of these benefits are stimulating increased demand for microgrids on a worldwide basis, in a range of application scenarios including campus environments, military operations, remote/off-grid settings, community/utility systems, and commercial and industrial markets.  According to a new report from Pike Research, microgrid capacity worldwide will experience a compound annual growth rate (CAGR) of more than 22% over the next five years, reaching 4.7 gigawatts by 2017.  That represents $17.3 billion in annual worldwide revenue by the same year, the cleantech market intelligence firm forecasts. 

“Several new players have recently entered the microgrid market, signaling that a new race is on to take advantage of the significant opportunity that microgrids represent on a worldwide basis,” says senior analyst Peter Asmus, “most notably ABB, the Swiss industrial giant that is a leading player in transmission and distribution infrastructure, and Boeing, the veteran defense contractor that is engaging with Siemens in a strategic alliance to serve the U.S. military, as well as San Diego Gas & Electric – one of the leading utilities in this space – and Green Energy Corporation, which is addressing the interoperability of various controls and communications platforms being deployed for microgrids.”

Microgrids still face significant barriers to wide scale adoption.  As of 2012, not a single national government has developed an integrated or comprehensive policy creating a viable, vibrant market for customer-driven microgrids.  With the exception of Denmark, few other countries are even examining the complex policy issues involved when aggregating DERs not owned by utility companies on a broad scale.  While North America is still clearly the leader in terms of planned capacity, the developing world remains the most promising long-term market.  In particular, the remote/off-grid segment has emerged as the clear leader in terms of revenue and is arguably the most mature in terms of commercial status.

Pike Research’s report, “Microgrids”, analyzes the global market opportunity for microgrids across five key application segments:  campus, military, remote, community, and commercial & industrial.  The report provides a comprehensive assessment of the demand drivers, business models, policy factors, and technology issues associated with the rapidly-developing market for microgrids.  Key industry players are profiled in depth and worldwide revenue and capacity forecasts, segmented by application and region, extend through 2017.  An Executive Summary of the report is available for free download on the firm’s website.

Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 26, 2012

As social media adoption continues to grow, utilities of all sizes are recognizing the impact these new services can have on their marketing, communications, and business strategies.  While some utilities have already seized on the opportunity that social media offers, others remain on the sidelines.  Awareness of the benefits that utilities can garner by utilizing social media services to communicate with end users – such as keeping customers informed about pricing and billing changes, educating customers about new products and services, and allowing for a more engaged relationship with customers – is on the rise.  According to a new white paper from Pike Research, approximately 57 million customers worldwide used social media to engage utilities in 2011 and that number is expected to rise to 624 million customers by the end of 2017.  The paper, which is based on a web-based survey of more than 1,000 U.S. consumers in the fall of 2011 using a nationally representative and demographically balanced sample, is available for free download on Pike Research’s website.

“For many people social media has emerged as a useful way to engage with their utilities, and somewhat surprisingly these customers are doing so on a fairly frequent basis, as our survey data shows,” says senior analyst Neil Strother.  “Most of these customers are younger adults under 30 who have embraced social media as their preferred communication tool. Utility managers should have some strategy in place for listening to and engaging with customers via these newer channels like Facebook, Twitter and YouTube.”

While the overall percentage of customers who interact with utilities using social media is not large, at just under 11%, of those who do communicate with their provider using social media, nearly 60% say they do so either “very often” or “regularly.”  As expected, younger respondents were more likely to use social media services, with those under age 30 reporting the highest use (83%) of any demographic segment.  That means that the number of customers using these services to engage with their utility will only grow in coming years.  Correspondingly, as social media become more pervasive, utilities and other companies will look to invest in and grow their presence in this area. 

The primary reasons for contacting a utility using social media are billing issues or to obtain information.  Somewhat surprisingly, the percentage of respondents using social media to praise their utility’s service (24.7%) is more than double that complaining via social media (11%).

Pike Research’s white paper, “Social Media in the Utility Industry Consumer Survey”, examines the current frequency of consumer interactions with utilities using social media tools, the reasons for those interactions, and the demographic and behavioral segments most likely to use social media such as Facebook, Twitter, YouTube, LinkedIn, and blogs for utility interactions.  The report also analyzes the level of interest among consumers in future engagement with utilities via social media.  The report’s findings are based on a web-based survey of 1,051 U.S. consumers conducted in the fall of 2011.  A full copy of the white paper is available for free download on the firm’s website.

Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 25, 2012

According to the U.S. Department of Energy (DOE), 18% of all the energy produced in the United States is employed to cool, heat, light, or accomplish other functions within commercial buildings.  Given the challenging business and economic environment of recent years, governments, building owners, building tenants, and companies in general are looking for ways to become more efficient both fiscally and environmentally.  One key mechanism for achieving greater efficiency is building energy management systems (BEMS), defined as the software, hardware, and services associated with the intelligent (i.e., information and communication technology-based) monitoring, management, and control of energy, specifically for reducing overall energy consumption and lowering energy costs.  Recent advances in technology and the availability of much more detailed data and information on how buildings can use energy more efficiently have sparked growing interest in, and rising sales of, these systems.  According to a new report from Pike Research, worldwide revenue from building energy management systems will increase at a compound annual growth rate (CAGR) of nearly 14% through the rest of this decade, reaching just under $6 billion a year by 2020.

“Over the last year, the convergence of building equipment and IT has advanced at a rapid pace, enabling a higher degree of control over building energy and operations than ever before,” says research analyst Eric Bloom.  “The BEMS market is evolving rapidly and is enjoying a burst of innovation, leading to an explosion in the amount of data that is available on the energy performance of commercial buildings.”

North America continues to lead the global market for BEMS, but Pike Research expects growth to accelerate worldwide, particularly in Asia Pacific.  While interest in BEMS and energy efficiency is high in Western Europe, Asia Pacific will take its place as the second largest market in coming years, due to the extremely rapid pace of construction in the region as well as the challenge of meeting soaring energy demand with limited supply.  Outside of these three regions, the BEMS market will generally experience single-digit growth and modest levels of overall spending over the forecast period.  In every region, the existing building stock is a large market for BEMS sales – particularly buildings constructed or modernized within the last 30 years with moderately sophisticated building management systems. 

Pike Research’s report, “Building Energy Management Systems”, examines the global market for building energy management systems hardware, software, and services, along with trends in new product offerings, new technologies, business models and business strategies, and key industry players.  Market forecasts in this report include total revenue growth from 2011 through 2020, as well as segmentation for seven global regions.  The forecasts also include segmentation by software, services, and hardware spending, along with projections for the leading market segments by building type for each region.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 24, 2012

While the market for smart grid cyber security is still nascent, the competitive landscape includes established smart grid specialists, niche players, and well-known enterprise security vendors.  Paradoxically, although the larger cyber security market is often considered quite mature, this niche – smart grid cyber security – is not mature at all.  For the moment, in fact, size and scale actually appear to be somewhat of a disadvantage, and specialist companies have thus far fared well.  The ability to react quickly has so far prevailed over the advantages of larger, more established providers.  However, that is unlikely to be the case going forward.

According to a new Pike Pulse report published by Pike Research, the vendors best positioned in the rapidly evolving threat management market, a key segment within the larger smart grid cyber security sector, are Industrial Defender, IBM, and NitroSecurity.

“Smart grid cyber security remains a new market with an intriguing mix of innovators, control system specialists, and multinational security vendors,” says senior analyst Bob Lockhart.  “There are few enforceable regulations and many utilities have not yet deployed a full security solution.  There is much to play for in this market, and success is likely to require a mix of innovation, utility operations knowledge, and financial resources.  No one vendor has all of these yet.”

The highest-scoring company in this Pike Pulse report, Industrial Defender, has a detailed suite of industrial control system (ICS)-specific offerings for network security, event management, correlation, and compliance.  Unlike most of the companies pioneering this field, Industrial Defender has good political capital with utilities’ operations teams.  To date, the company has been the strongest innovator in developing solutions that are specific to smart grid cyber security.

The only large multinational to rank in Pike Research’s Leaders category, IBM is perhaps the only vendor taking a big picture view of the smart grid and cyber security markets going forward.  This could work against the company in the short term when it comes to specific product sales, but the vision is compelling.  The third company to score in the Leaders category of this Pike Pulse, NitroSecurity, was until recently an independent startup.  McAfee, itself owned by Intel, completed its acquisition of NitroSecurity on November 30, 2011. 

The “Pike Pulse Report: Smart Grid Cyber Security Threat Management” evaluates 15 of the leading cyber security threat management vendors in the smart grid market and rates them on 12 criteria for strategy and execution, including vision, go-to-market strategy, partnerships, product strategy and roadmap, technical innovation, geographic reach, market share, sales and marketing, product performance and features, product portfolio, control system focus, and staying power.  Using Pike Research’s proprietary Pike Pulse methodology, vendors are profiled, rated, and ranked with the goal of providing industry participants with an objective assessment of these companies’ relative strengths and weaknesses in the emerging smart grid cyber security threat management marketplace.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 23, 2012

Today Pike Research announced the launch of its new Bioenergy Advisory Service, a subscription-based information suite that provides independent and objective market intelligence and strategy insights for companies and other organizations engaged in the fast-growing biomass ecosystem.  Worldwide, biomass is the fourth largest energy resource after coal, oil, and natural gas – estimated at about 14 percent of global primary energy.  As global energy demand escalates and efforts to curb greenhouse gas emissions intensify, an increasing number of countries are turning to biomass resources as fuel for commercial-scale electricity production and feedstock for biofuels production. 

“The bioenergy market – encompassing the use of biomass for electricity, heat, and fuel – represents a major growth opportunity in the crowded renewable energy landscape,” says senior analyst Mackinnon Lawrence.  “Over the past decade, the biofuels industry has emerged as an important player in the global fuel landscape, currently producing the equivalent of just under two million barrels per day.  By helping to diversify national energy portfolios and providing a sustainable base load source of electricity, biopower has solidified its role as a key renewable alternative to fossil fuel resources such as coal.”

As part of its Bioenergy service, Pike Research’s industry analysts offer timely and actionable market insights, covering specific technology and business sectors as well as overall market conditions and trends.  Research reports include an in-depth examination of business models, technology issues, policy and regulatory factors, the competitive landscape, and market sizing, segmentation and forecasting. 

Pike Research’s key findings and forecasts about the emerging Bioenergy market include the following:

• Although biomass utilization is primarily local, supply chain footprints are expanding globally, with trade in biomass resources emerging as a major growth driver.
• In the midst of an explosion of feedstock opportunities and a number of end-market options, scale-up efforts around bioenergy will hinge on stakeholders’ ability to effectively manage increasing levels of market and regulatory complexity. 
• Worldwide biopower generation capacity will grow to at least 86 gigawatts (GW) by 2021, from 58 GW in 2011, representing a total investment of $104 billion from 2008 to 2021.
• Biofuels production capacity is expected to reach 65.7 billion gallons per year by 2021, with industry value increasing from $82.7 billion in 2011 to $185.3 billion by 2021.
• Algae-based biofuels production will gain traction over the next decade, reaching an estimated value of $1.3 billion by 2020.  Global revenues from waste-to-energy systems will experience strong growth over the next five years, more than tripling in size from $4.2 billion in 2011 to almost $13.6 billion by 2016.

Pike Research’s Bioenergy Advisory Service focuses on the utilization of renewable biomass feedstocks for the production of electricity, heat, liquid fuels, and chemicals. The service includes coverage of global regulatory and public policy trends, business models and economic factors, technology and intellectual property issues, and the emerging competitive landscape and supply chain for bioenergy markets.  Executive Summaries and further information about the Advisory Service are available for free download on Pike Research’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com

January 19, 2012

Uninterruptible power supply (UPS) systems, which use a built-in energy storage source such as a battery, flywheel, or other device to supply clean and sufficient power during grid power outages, have demonstrated their value in preventing undesirable downtime, data loss, or even catastrophic failures.  Traditionally, however, most of these systems were point solutions designed to protect an individual PC, server, medical device, airport, or factory.  Today, new technologies and architectures are emerging that can more effectively integrate UPS systems into the larger power infrastructure and take advantage of the large amount of energy storage already installed worldwide.  In particular, as green IT becomes an important goal for many IT vendors and users, UPS systems that can fit into and augment existing IT infrastructures to support the vendors’ overall green IT objectives will be in increasing demand.

According to a recent report from Pike Research, these trends, along with significant growth in emerging economies, will lead to strong growth for the UPS sector in the next few years.  The global market for UPS systems will expand from $8.2 billion in 2011 to $9.4 billion in 2012, a year-on-year growth rate of 14%, the cleantech market intelligence firm forecasts. Going forward, the market will grow to $13.2 billion by 2015.

“UPS systems are already an important energy storage feature in cost-efficient and smart buildings,” says vice president of research Bob Gohn.  “The emergence of hybrid topologies that automatically switch between different power modes can reduce energy costs over time without compromising power quality.”

Next generation UPS systems will combine several key features, including a built-in energy storage source, such as batteries, flywheels, or compressed air, and circuitry to supply clean and sufficient power over periods lasting from a few seconds to several hours.  Most leading UPS systems also have some form of surge protection or power filtering circuitry.  These advanced features enable these systems to play a larger role in the overall smart energy infrastructure, making them indispensable to a holistic energy management strategy. 

Pike Research’s report, “Next Generation Uninterruptible Power Supplies”, provides a comprehensive examination of the global market for uninterruptible power supplies including a focus on small, medium, and large UPS industry dynamics.  Emerging technologies and key industry players are analyzed in depth, and market forecasts for each segment and world region extend through 2015.  An Executive Summary of the report is available for free download on the firm’s website.

Contact: Richard Martin

+1 303 997 7609

press@pikeresearch.com