The COVID-19 pandemic has paused the global energy management market, however, the industry is expected to prevail post crisis, according to a new study released by Deloitte.
The report, Deloitte Resources 2020 Study: Energy Management, presents three key factors that will drive energy management investments post crisis and these include:
- Consumer sentiment and stakeholder pressure to address climate change are increasing.
Businesses and consumers hardly hit by COVID-19 may be slowing down their focus and investments in energy management in the short term.
However, in the longer term, strong consumer sentiment and increasing stakeholder pressure on businesses to up their performance of environmental, social and governance are expected.
- The convergence of environmental and cost drivers.
Cost cutting is typically the top reason for businesses and residential consumers to manage their energy use, but the desire to protect the environment and use of cleaner energy sources has been increasing.
- The quest for greater resiliency and self-sufficiency.
Increasingly severe natural disasters and longer outages have motivated many electricity customers in the business and residential consumer segments to seek greater resiliency and explore options beyond their electricity providers in recent years.
Growing interest in energy storage, onsite generation, and microgrids illustrate this trend.
However, revenue and income loss during the recession could potentially limit available capital for expenditures in the short to medium term.
The report has also identified two trends that have been strengthening throughout the decade and could be potential indicators of ongoing commitment to energy management.
The trends include business success in creating value through energy management and accelerating renewable energy procurement.
About nine in 10 businesses reported setting goals to manage electricity and other resources in 2020, consistent with prior years.
The percentage setting formal goals has risen steadily, from about half in 2011 to 65% in 2020. Most of those goals are in electricity, with about 90% consistently reporting electricity savings goals.
The percentage reporting goals in other areas, such as natural gas, carbon emissions, and transport fuel consumption, has generally risen over the decade.
The report has also identified two trends in need to be addressed to encourage energy management growth. These include rising privacy and security concerns and the need for flexible, customised products and services.
- Privacy and security concerns
Growing technology adoption is sowing concern for privacy and security in the business and residential consumer segments.
In some cases, this concern may hinder further technology adoption. With more people working from home and staying home during the COVID-19 pandemic, hackers are increasingly targeting home networks and seeking to break into personal and corporate systems.
In addition, more than half (52%) of business respondents are concerned about a potential power interruption due to a cybersecurity event, and more than a third (37%) of residential consumer respondents share that concern.
2. Consumer flexibility and churn
Utilities and energy management solution providers need to provide their customers with solutions to help them to cut costs, boost resiliency, or source cleaner energy to avoid churn.
For more insights, read the full report, Deloitte Resources 2020 Study.