Energy-as-a-service (EaaS) is a type of energy service that is delivered to clients with no prior capital commitment. These services are often provided through subscription-based or performance-based contracts. The demand for EaaS is largely driven by the need for advanced energy technology and its potential for extending low-carbon technology implementation. EaaS systems can save money by optimizing energy use for many types of customers, including commercial and industrial. The integration of modern technologies such as the Internet of Things (IoT), blockchain, and artificial intelligence (AI) has enabled energy service providers to enhance their solutions and deliver personalized optimization services to their consumers. Smart city infrastructure and industrialization are set to increase demand for energy efficiency solutions significantly. Additionally, low carbon emissions, connectivity to remote sites, improved power security, peak load shaving, overall system efficiency, and cost savings for consumers and utilities are just a few of the benefits of deploying distributed systems. Furthermore, lower DEG (distributed energy generation) prices have benefited the EaaS ecosystem by assisting clients in lowering their energy expenditures by switching from conventional to DEGs. Due to this, according to OMR Research, the EaaS market is expected to grow at a CAGR of 15.2% during the forecast period.
Segments of the Market
The European EaaS market is segmented on the basis of type and end-user. On the basis of type, the market is sub-segmented into power generation services, operational and maintenance services, and energy efficiency and optimization services. On the basis of end-user, the market is sub-segmented into commercial, industrial, and other.
Recent Developments
The market is dominated by Alpiq Holding AG, Engie SA, Enel X s.r.l., Schneider Electric SE, and Siemens AG. To increase their global market share, industry participants have used various methods such as mergers and acquisitions, product launches, regional expansion, partnerships, and cooperation. Some of the recent developments and contributions in the market by these players include:
• In January 2022, Impax Asset Management collaborated with Bullfinch Asset to invest in distributed solar generation in Germany. The companies have deployed capital in projects that enable locally generated energy and support the decarbonization of the real estate sector. The projects were managed using Bullfinch’s cloud-based cleanEaaS technology platform, which enables the bundling, financing, standardization, and management of building and facility infrastructure in the region.
• In December 2021, Schneider Electric SE partnered with Temasek to launch GreeNext. GreeNext is a joint venture that provides sustainable energy solutions to commercial and industrial customers by using technologies such as battery and solar hybrid microgrids.
• In October 2021, BP and Infosys agreed to develop and pilot an EaaS solution that will aim to help businesses improve the energy efficiency of their infrastructures and meet their decarbonization goals.
• In July 2021, Solarwatt, a leading German manufacturer of complete PV systems and the European market leader in Glass-Glass solar panels, collaborated with Essex County Council (ECC) to eliminate its utility bills and reduce carbon emission footprints. The company has supplied PV systems for a 15-site scheme commissioned for Essex to reduce emissions, further assisting in meeting UK net-zero targets. The collaboration is also funded by the Department for Education (DoE) and the European Union (EU) project Empower 2.0, which aims to provide cost-saving benefits while pushing the education authority to invest in other facilities and services.
• In October 2020, Macquarie’s Green Investment Group (GIG), Siemens Smart Infrastructure, and Siemens Financial Services (SFS) announced the formation of Calibrant Energy (Calibrant), a joint venture that offers comprehensive onsite energy-as-a-service (EaaS) solutions at no up-front cost for its customers, including corporate and industrial clients as well as municipalities, universities, schools, and hospitals.
Conclusion
The EaaS concept consists of a subscription for electrical devices held by a service firm or energy consumption management to supply the required energy service. The term EaaS is most commonly used to indicate energy efficiency-related business models, but it can also be used to describe other energy-related business models, such as a solar energy subscription. There are several factors that are attributing to the market’s growth. For instance, smart solutions based on lighting infrastructure established the groundwork for launching further smart city projects at a low cost. For better and more effective use of energy resources, smart cities combine physical, digital, and human systems with traditional networks and services. Lighting is commonly used to facilitate the transformation of cities and buildings into smart infrastructure. As a result, the rising demand for the implementation of smart cities, combined with smart lighting solutions, is a significant driver of market growth. The mix of LED lighting, municipal infrastructure, and smart city technologies are important factors to consider when developing a smart city plan. Several nations' governments are progressively launching new initiatives to promote the use of efficient and renewable energy sources.