Energy Management Systems Market

[307 Pages Report] The energy management system market is set to grow from an estimated USD 44.19 billion in 2024 to a projected USD 84.34 billion by 2029, at a CAGR of 13.8%. An energy management system (EMS) is a software system that monitors, optimizes, maintains, and records the consumption of energy resources by any industry. It uses data from various energy measuring devices to provide trend analysis and annual consumption forecasts. EMS applications use real-time data to make changes to the system, such as frequency, actual generation, tie-line load flows, and plant units’ controller status. The EMS aims to reduce energy consumption, identify areas of wastage, predict electrical system performance, and optimize energy usage to reduce the cost of electrical loads on-premises. EMS can centrally monitor devices, such as heating, ventilation, and air conditioning (HVAC) units and lighting systems, across multiple locations using a central/remote server or over cloud IoT. Using energy management systems reduces operating costs and improves productivity while meeting the automation requirements of energy equipment and operation management to reduce the input of human resources.

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Energy Management System Market Dynamics

Driver: Rise in Energy Costs and Shift to Renewable Energy

The global shift from conventional energy sources to renewables has introduced new challenges in energy management market. This transition is particularly evident in Europe, where countries such as Germany and Spain have aggressively pursued renewable energy targets. However, renewable sources such as wind and solar are inconsistent, depending on the season or time of day; this has increased the complexity of energy management, making EMS indispensable in balancing energy loads and ensuring efficient energy use.

Restraint: Data Privacy and Security Concerns

As the global energy management software market increasingly relies on digital platforms, cloud computing, and Internet of Things (IoT) devices, data privacy and security have become significant barriers to market growth. These concerns are particularly relevant as EMS solutions often involve the collection, transmission, and storage of vast amounts of sensitive data, making them prime targets for cyberattacks and data breaches.

The integration of IoT devices within EMS creates multiple entry points for potential cyberattacks. Each connected device, from smart meters to sensors, increases the vulnerability of the system. A successful attack on any device can compromise the entire EMS, leading to data theft or even control over critical systems.

Opportunity: Fiscal Incentives and Tax Policies for Carbon Reduction and Energy Efficiency

Governments worldwide are keen on leveraging subsidies on carbon and electricity tax policies to strategically promote energy efficiency and reduce carbon emissions. These fiscal measures are crucial in driving the adoption of energy management systems through financial incentives and creating a regulatory environment conducive to energy-efficient practices. Electricity taxes are another critical policy tool governments use to promote energy efficiency. These taxes often vary based on energy consumption levels, encouraging businesses to adopt EMS to optimize their energy use and reduce tax liabilities. Germany’s Renewable Energy Sources Act/Erneuerbare-Energien-Gesetz (EEG) imposes a surcharge on electricity consumption, which is used to fund renewable energy projects. Companies that implement energy management practices and achieve significant reductions in energy consumption can benefit from tax reductions or exemptions. Similarly, in Japan, the Global Warming Countermeasures Tax levies additional costs on electricity generated from fossil fuels, encouraging the adoption of EMS to minimize energy usage and associated costs.

Challenge: Awareness Deficit Among SMEs

Small and medium-sized enterprises (SMEs) play a crucial role in the global economy; however, their adoption of energy management systems remains limited due to a significant lack of awareness about the benefits of these systems. Governments worldwide recognize this challenge and have initiated several programs to increase awareness and support the adoption of energy-efficient technologies among SMEs.

Energy Management Systems Market Ecosystem

Prominent companies in this market include well-established, financially stable manufacturers of energy management systems and components. These companies have been operating in the market for several years and possess a diversified product portfolio, advanced technologies, and strong global sales and marketing networks. Prominent companies in this market include ABB (Switzerland), Siemens (Germany), Schneider Electric (France), General Electric Company (US), Emerson (US), and Eaton (Ireland).

Energy Management System Market Supply Chain

Hardware Components Accounted for the Largest Segmental Share in 2023

The hardware subsegment of the global energy management systems market is crucial in highlighting the effectiveness of energy management strategies across various industries. This subsegment includes a range of physical devices and equipment, such as smart meters, sensors, controllers, energy storage systems, communication devices, and networking hardware. These components are essential for collecting, transmitting, and processing energy-related data, which is then used by software systems to optimize energy usage, enhance operational efficiency, and reduce costs.

IEMS to be the Largest Type of Energy Management Systems in the Market

Industrial energy management systems (IEMS) occupied a 72.76% share of the global energy management systems market in 2023. The IEMS subsegment is experiencing robust growth, primarily driven by the need for enhanced operational efficiency and the integration of Industry 4.0 technologies. This type is tailored to optimize energy use in large-scale, energy-intensive industrial environments, where energy consumption comprises most of the operational costs. These systems provide comprehensive solutions for monitoring, controlling, and analyzing energy usage across various industrial processes, from manufacturing to production and distribution.

On-premise Deployment to be the Larger Segment in the Energy Management Systems Market

The on-premise subsegment of the global energy management systems market represents a significant portion of the deployment strategies adopted by organizations, particularly those with stringent data control, security, and compliance requirements. On-premise EMS solutions involve the deployment of software and hardware within the physical infrastructure of an organization, providing full control over data management, system customization, and integration with existing IT environments. This approach is particularly favored by industries such as manufacturing, utilities, and government sectors, where sensitive data and critical operations necessitate robust security measures and minimal reliance on external networks.

Food & Beverage end-use Industry, third-largest segment in the Energy Management Systems Market, to Experience robust growth

The Food & Beverage subsegment of the global energy management systems market is experiencing robust growth, driven by the sector's focus on sustainability and operational efficiency. This industry is characterized by high energy consumption due to processes such as heating, cooling, refrigeration, and production line operations. EMS solutions are crucial for managing these energy-intensive processes effectively, allowing food and beverage companies to optimize their energy usage, reduce costs, and enhance their sustainability efforts.

North America to be the Largest Regional Market During the Forecast Period

North America is estimated to account for the largest market share in the global energy management systems market; its advanced energy systems, high technology, and strong regulatory framework promote energy efficiency and sustainability, encouraging investments in infrastructure, integration of renewable energy, and further modernization of aging energy systems contribute to increased use of EMS. Leading EMS providers and well-established market applications in the energy sector reinforce North America’s leadership position in the global energy management system market size. Also, regulatory compliance is another factor driving the demand for EMS in this region.

Key Market Players

The energy management systems market is dominated by a few prominent players that have a wide regional presence: ABB (Switzerland), Siemens (Germany), Schneider Electric (France), General Electric Company (US), and Emerson (US). Between 2020 and 2024, companies adopted product launches, contracts, agreements, partnerships, collaborations, and acquisitions as strategies to acquire a larger share of the market.

Recent Developments

• In July 2024, Honeywell International entered a partnership with Odys Aviation to develop new ground control stations, enhancing operational efficiencies and supporting the integration of advanced technologies in aviation and energy management.
• In June 2024, ABB entered a memorandum of understanding (MoU) with Cleanwatts to develop advanced energy management and efficiency technologies. This collaboration focused on creating scalable projects in key European markets, enabling users and property managers to optimize energy consumption through smart monitoring and control solutions. The partnership aimed to integrate Cleanwatts’ energy-sharing platform with ABB’s energy management technology, enhancing the management of renewable energy generation, storage, and consumption.
• In November 2023, Schneider Electric announced the acquisition of EcoAct, a leader in climate consulting and net-zero solutions. This acquisition would strengthen Schneider Electric's sustainability initiatives and expand its offerings in the energy management sector.

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