Energy transition presents $2 trillion opportunity for manufacturers


Manufacturers can capitalise on historic transformation across energy systems, material flows, sustainability efforts, and customer demands, according to Navigant’s latest white paper. 

The white paper, Sustainable Manufacturing Transformation: Securing Opportunities from the Emerging Energy Cloud, offers a framework to help manufacturers design and build cleaner and circular operations, while addressing rapidly changing customer needs.

Alongside historic disruption across the energy value chain, new technologies and business models are transforming manufacturing as the world knows it today.

Sustainability goals to reduce greenhouse gas emissions and the need to address long-term climate risks are driving a major shift in material flows toward a more circular and resource efficient manufacturing system.

According to the report, globally, a sustainable manufacturing transformation is underway, and Navigant expects it will further accelerate and cause disruption, while also presenting an industry opportunity worth over $2 trillion.

“The sustainable manufacturing transformation will create new value for consumers and have an effect on the bottom line of manufacturing companies globally, increasing shareholder value,” says Jan Vrins, managing director and leader of Navigant’s global Energy segment.

“Manufacturers need to demonstrate leadership, vision, and the ability to implement to proactively navigate the rapidly changing environment and maintain a competitive edge.”

According to the white paper, three transformational waves characterise the industry’s ongoing shift: from traditional manufacturing to on-demand manufacturing; from passive energy consumer to active energy prosumer; and from supply chain management to full system orchestration.

Understanding these waves, and the way they interact with the following megatrends, is key to creating a strong position in the manufacturing industry of the future.

Climate Action: More companies are setting commitments to reduce greenhouse gas emissions through formal initiatives like Science Based Targets.
Energy System Transition – Energy Cloud: The use of renewables and alternative fuels is increasing, while distributed energy resources and flexibility solutions are scaling up.
Circular Economy: The implementation of circular economy principles in product design is increasing, and more manufacturers are creating recyclable, reusable products without compromising functionality.
Anything as a Service (XaaS): Novel, ownership-less business models are emerging across sectors, from carsharing platforms to apparel leasing, with some of them threatening incumbents, and new business models reducing the demand for new products.
Additive and Micro-Manufacturing: Rapid growth in on-demand manufacturing for production of both intermediate products or product parts and consumer products is occurring.
Industry 4.0: The manufacturing segment is the largest investor in Internet of Things, enabling more efficient operations and logistics.

“Companies that have an outlook on the transformation of their business environment and build robust, long-term strategies will be successful,” says Kornelis Blok, director at Navigant.

“The winners will be the companies that are able to adapt and create new value for customers and shareholders by being proactive, thinking strategically, and developing roadmaps, while also pursuing no-regret actions that can be implemented immediately.”