Top 5 growth opportunities in the energy & environment industry for 2021


Research firm Frost & Sullivan has released a new paper highlighting the top five growth opportunities for companies within the energy and environment industry in 2021.

According to the report, the global energy and environment industry is going through an unprecedented transformation driven by innovation and disruptive business models.

The advent of greener, smarter, and more connected products and services will transform society into a digital and sustainable domain, offering enhanced efficiency, environmental performance, productivity, flexibility, and profitability.

However, in the wake of COVID-19, many companies in the energy sector are struggling with pricing pressures, commoditisation, and industry disruption.

Despite the challenges, there still are some growth opportunities for companies in the industry. The top five key areas expected to transform the industry in 2021 include:

#1 Energy transformation

The move to a decarbonised electricity system is expected to continue to gain pace, with coal plant closures increasing – and those that are open, but utilized for fewer hours.

Investments in renewable energy are expected to accelerate. Utility-scale
investments will stay strong, but residential and commercial solar PV systems are forecast to see very strong growth, increasingly in combination with battery energy storage, fundamentally changing the energy system.

An average of $340 billion will be invested annually in renewable energy sources over the next decade.

Global climate change, government targets and incentives that
mandate investment in renewable energy and the declining renewable energy project costs are key drivers.

Key growth opportunites include:

  • New risk-gain share models for technology original equipment manufacturers.
  • Increased demand for energy supply and demand optimisation solutions.
  • Consumer to prosumer – additional revenue stream opportunities for participants throughout the economy.
  • Power-to-X – renewable electricity to generate green fuels.

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#2 Sustainability and circular economy

Driven by climate action and accelerated due to COVID-19 – industries will embark on a new era of growth opportunities linked to water, energy, and other critical resources in an increasingly connected world that will be catalyzed by innovation towards net-zero.

Driving growth within the circular economy sector include the climate emergency and associated supply chains and risks to the scarcity of water.

Regional policies such as the Green Deal in Europe as well as related national, industrial as well as company driven initiatives and commitments focused on sustainability goals such as net-zero are also driving the sector.

#3 Smart and cognitive buildings

Frost & Sullivan predicts that AI will continue to be leveraged for carbon
savings, energy savings, and occupant’s comfort and productivity in buildings.

The next opportunities for AI-powered buildings will focus on occupants’ health and safety, optimal space design, and crowd analytics.

#4 Electrification of transport, mobility, heating, and industrial processes

Factors driving the need to electrify the transport, buildings and industrial processes will include increasing stringent energy efficiency
requirements in most global geographies, corporate sustainability agendas and continued technological and solution advancements providing better return on investments for electrified solutions.

#5 New service-based business models

Motivated by the need to minimise market risks and improve monetary return, customer preferences are shifting from upfront payment models to OPEX based models where they pay for guaranteed outcomes.

Digital technologies are enabling new anything-as-a-service (XaaS) models to come tolife.

The global performance contracting market is forecast to be worth over $100 billion in 2021 as companies seek to further optimise operations and
maximise revenues.

Dowload the paper for more information about the opportunities for 2021.