Energy efficiency - Balancing business opportunities with threats to revenue

Publication Date	August 2007
Publisher	Datamonitor
Product Type	Report
Pages	21
ISBN Number	not applicable
Product Code	DAT07172

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Summary

Introduction

The energy services industry is growing rapidly, spurred on by both rising energy prices and energy market liberalization. Energy services offerings, which offer the prospect of improved energy efficiency, reduce potential energy sales revenue. Yet the inevitability of these offerings in a liberalized market make it imperative for utilities to capture this revenue before competitors do.

Scope

A review of the energy services industry and the reasons why utilities need to enter this market proactively.
Data on the size and growth rate of the energy services market across Europe.
An analysis of how energy efficiency offerings relate to energy reduction tariffs and the switching rules of regulators.

Highlights

At least 13 utilities around Europe explicitly offer energy reduction tariffs, which are predicated upon active supplier involvement in reducing energy consumption. Most of these tariffs require a stable customer relationship to provide a return on investment for utilities, such as on the installation of home wall insulation or smart meters.

Amongst those utilities who report on the financial performance of energy services as a separate business unit, Suez is a clear leader, capturing just over 5% of the estimated EUR207 billion European energy services market.

Many suppliers now market energy services not simply as a route for improved energy efficiency, but as a form of outsourcing thataside from cost controlallows clients to focus resources and attention on their core business.

Reasons to Purchase

Understand how energy efficiency is wrapped into a variety of energy services offerings.
Forecast growth rates in the energy services market across Europe.
Identify markets where higher switching rates will provide a boost to the energy services industry.

Content

Datamonitor View
Catalyst
Summary
Analysis
- Increased Competition, Higher Energy Prices And Tighter Regulation Make An Energy Services Offering An Imperative For Utilities
- Utilities Should Now Focus On How To Structure An Energy Services Offering
- Energy Efficiency Is Both A Client Service And A Utility Cost-Saving Activity
- In Both Competitive And Concentrated Markets, An Energy Services Offering Makes Strong Business Sense For Utilities
- Increased Loyalty, Product Differentiation And Closer Business Relationships Flow Directly From Energy Services Activities
- B2c Energy Services, Even Without Supportive Tariff Regimes, Can Deliver Customer Loyalty
- Energy Services Can Be Marketed As A Part Of Outsourced Energy Management
- The Requisite Conditions For A Boom In Energy Management Outsourcing Are Emerging Across European Markets
- Energy Services Can Be Marketed As Business Outsourcing, Not Simply A Vehicle For Energy Efficiency Improvement
- The Energy Services Market Is Growing Quickly Across Europe
- Energy Liberalization And Rising Prices Mean The Energy Services Market Will Grow Faster Than Gdp And Power Demand Growth
- By 2008, Europe's Potential Energy Services Market Will Be Over &Euro;240 Billion
- For Some Utilities, Revenue From Energy Services Is Far Outpacing Overall Growth Revenue
- Suez Is A Market Leader In Terms Of Decoupling A Large Portion Of Its Revenues From Energy Sales
- No Utilities Have Yet Emerged To Dominate The European Energy Services Market
- The Eu's Energy Efficiency Directive Imposes An Obligation On Member States To Implement Energy Efficiency Measures By 2008
- The Eu's Energy Efficiency Directive Imposes An Obligation On Member States To Implement Energy Efficiency Measures By 2008
- Most Eu Countries Have Failed To Submit Eeaps To The Ec By The Agreed Deadline Of June 30, 2007
- Successful Energy Services Offerings Must Carefully Track Switching Rates And Rules
- Energy Reduction Tariffs Are Still Not Commonplace In European Utility Markets
- Utilities Launching Energy Services Offers Must Beware Of The Customer Switching Rules Of Regulators
- High Rates Of Switching By Non-Residential Power Customers Will Impact Upon The Viability Of Energy Service Offers In Some Markets
- High Rates Of Switching By Non-Residential Gas Customers Will Impact Upon The Viability Of Energy Service Offers In Some Markets
Appendix
- Definitions
- Further Reading
- Ask The Analyst
- Datamonitor Consulting
- Disclaimer
List Of Figures
- Figure 1: Energy Services Offerings Reduce Energy Sales But Increase Customer Loyalty, And May Increase Overall Utility Revenue
- Figure 2: Suez's Full Range Energy Services Offering For Industrial Clients
- Figure 3: Power Demand, Gdp And Energy Services Market Growth, 2006-08
- Figure 4: Forecast Energy Services Market Size In 2008
- Figure 5: Increase In Energy Services Market, 2006-08
- Figure 6: Utility Revenue Growth 2005-06: Corporate Versus Energy Services Revenue
- Figure 7: Utility Revenue Versus Revenue From Energy Services In 2006
- Figure 8: Energy Services Market Shares In 2006
- Figure 9: Eeap Submission Status Across The Eu
- Figure 10: Energy Reduction Tariffs Offered By European Utilities
- Figure 11: Forecast Electricity Customer Switching Rates, 2008
- Figure 12: Forecast Gas Customer Switching Rates, 2008