Frost & Sullivan: Industry digitalisation key for energy market growth


According to Frost & Sullivan’s report Asia Pacific Energy & Environment Industry Outlook, cross-industry digitalisation and alternative energy are key to achieving operational efficiency, risk mitigation, optimising production and cost savings.

Report summary

Technology continues to be a key disruptor across industry segments.

Companies in the energy and environment markets continue to invest heavily in the clean energy sector and use of smart technologies across the industry value chain is on a growth trajectory.

In the power generation sector, solar power will overshadow cheap coal as the fastest growing segment in the Asia Pacific (APAC) region.

Business models for power utilities will undergo slow and steady transformation as growing interest in distributed energy and microgrid threatens the conventional power industry’s supply chain.

2018 digitalisation trends

Coal Investments to go downhill for second consecutive year

Investments in coal power market in the APAC region will continue to dwindle for second year in a row, due to mounting challenges to get coal-fired power plants off the ground. Coal will continue to be the least important in 2018 as focus will remain on renewables, mainly solar power.

Distributed Energy Projects to remain at the forefront

Fuelled by technology and business innovation, investments in renewable energy (RE) will continue their high growth trajectory. As countries transition to a low-carbon future, RE including hybrid projects will become a mainstream source of power. Annual solar photovoltaic (PV) capacity growth is set to increase by 10% in 2018 even as key markets such as India and Japan are likely to witness a slowdown this year.

Utilities to continue smart grid investments

2018 will see widespread investments in distribution grid management systems in Southeast Asian countries like Thailand and Vietnam. Utilities in Japan and Australia will take their first steps towards Internet of Things (IoT) implementation in the power sector by adopting this technology for their generation and grid equipment.

Utility-scale projects to drive demand for battery-based Energy Storage Systems (ESS)

With new partnerships and new market entrants, disruption in ESS competition will be intense in 2018. Battery-based ESS projects will also register significant growth, especially in China, Japan, India, and Thailand.

Strong opportunities ahead for water industry participants

Water utility industry CAPEX will grow by 9.6% in 2018. Asian water utilities will leverage digital platforms to improve service and revenue collection. Smart cities’ vision fruition and the redevelopment of water services will also open up opportunities for smart meter solutions and IoT providers. Partnerships and collaborations between water companies will gain prominence during this year.

Frost & Sullivan’s Asia Pacific Energy & Environment Industry Outlook is an annual research that scrutinises most of the significant regional and country-level energy and environment market trends including oil & gas, power, distributed energy, buildings and water to provide expert opinions on the future of the industry.