Global B2B Energy Services and Energy Contracting Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Global B2B Energy Services and Energy Contracting Market Research Report 2023-Competitive Analysis, Status and Outlook by Type, Downstream Industry, and Geography, Forecast to 2029

Faced with increasing pressure to use renewable energy sources and achieve energy efficiency, organizations face the complex task of procuring energy services from energy suppliers in a business-to-business (B2B) environment. The B2B Energy Services and Energy Contracting Industry aims to explore how customers approach the procurement of energy services in this context. They link energy-as-a-service offerings to the customer-supplier interfaces used to procure energy services to shed light on customer practices for such procurement in a B2B environment.

Market Overview:

The latest research study on the global B2B Energy Services and Energy Contracting market finds that the global B2B Energy Services and Energy Contracting market reached a value of USD 12259.0 million in 2022. It’s expected that the market will achieve USD 17529.3 million by 2028, exhibiting a CAGR of 6.14% during the forecast period.

The outbreak of COVID-19 has forced government authorities to impose draconian lockdowns and restrictions on production. Like all sectors of the economy, B2B energy service and energy contracting providers are responding to the challenges posed by the ongoing pandemic. These include global and domestic supply chain issues such as ocean freight bottlenecks and limited truck availability. With the COVID-19 pandemic disrupting the supply chains of several manufacturers, energy mobility is constrained and there is a huge gap between supply and demand. COVID-19 has presented several significant challenges to the B2B energy retail sector of utilities. These include a sharp drop in commercial energy demand, margin calls, delayed payments from customers, and a liquidity crunch due to customer insolvency. As electricity demand has fallen, so has demand from industrial and commercial users. Many governments have introduced extended grace periods for businesses to pay rent and utility bills to ease the pressure on businesses. Many businesses and the government itself have asked for a temporary reduction in payments due to shrinking revenues and ongoing fixed costs. This has a relatively large negative impact on the cash flow of B2B energy service providers. Products didn't reach customers on time at the start of the pandemic due to supply chain issues. Companies have had to contend with expected higher prices, delivery delays, and global uncertainty. As the epidemic gradually came under control, some factories began to resume work. However, enterprises need to protect the life and health of employees during the production process, such as purchasing masks, disinfectants, and other anti-epidemic materials, disinfecting the working environment before and after production, and measuring the temperature of employees every day to ensure the health of employees. These measures will increase production costs and affect the development of enterprises.

Benefits of B2B energy services

B2B energy services offer multiple benefits, including building faster-growing customer businesses, diversifying revenue streams, reducing energy bills, improving carbon footprint, and increasing energy independence and flexibility. The traditional energy industry is increasingly under pressure from limited growth and stagnant profits, and the energy and utilities sector needs to improve service resilience in an increasingly connected society. Energy service contracts are long-term and capital-intensive, so selecting the right customer is critical. Energy service customers need to carefully select the partner that best suits their needs. As energy utilities face changes in markets, technologies, and industry standards, they need a fast, flexible, and secure B2B infrastructure that can continue to deliver exceptional service anytime, anywhere. B2B energy companies are well-positioned in the energy solutions market due to their strong customer base, well-known brands, and in-depth knowledge of demand trends. B2B energy companies allow smaller companies to solicit customers, respond to bids, and accept orders via the Internet with minimal investment in technology, speeding up the exchange of energy transactions. Effective Internet business practices can simplify the procurement process and save a lot of money. Wholesale and retail energy companies need a way to reliably and securely exchange, track and coordinate transactions between producers, operators, pipelines, services, and marketers. B2B energy service solutions can be optimized for energy markets and supporting standards. In addition, utilities investing more in energy products and services such as solar panels and the software to store and control them could play a key role in the shift to self-generation. Distributed generation, flexibility, smarter networks, and further increases in business demand-side response (DSR) and storage provide the means for local balancing and ancillary services to maintain grid stability and security. Furthermore, digitalization and the energy transition have changed the way energy is produced and consumed. Decentralized energy sources, such as wind and solar plants, have led to microgrids. More and more communities around the world are using microgrids to power a small place. Microgrids allow individuals or organizations to power their homes, communities, and businesses. Decentralized energy systems allow energy customers to be independent of utility providers. B2B energy service companies can model, simulate, optimize, and operate electric fleets, charging infrastructure, and energy infrastructure by providing commercial fleet electrification services and microgrid infrastructure planning services to governments and enterprises. Therefore, the B2B energy services industry is on the rise as more and more people realize the advantages of B2B energy services.

Increased demand from downstream customers for clean and renewable energy

Products offered by energy service companies include energy information and control systems, energy audits, and installation, operation, and maintenance of equipment. B2B energy services cover a wide range, depending on the specific circumstances and needs of the client. To accommodate the necessary output and working hours of employees, commercial buildings, residential structures, and industries require a continuous supply of energy. Investments in this industry have arisen due to the increasing need for backup power systems in data centers in these industries in the event of a mainline outage. The energy demand is expected to increase as more and more vehicles that currently rely on fossil fuels switch completely to electric power. For business consumers, energy supply is not just a service, but part of a broader solution to improve competitiveness, reduce costs, ensure business continuity, and increasingly create better, greener brands. Many downstream customers are seeking to control their power supply by developing off-grid energy solutions or entering into long-term power purchase agreements with renewable energy developers. Reasons include rising energy prices, the risk of power outages, and the vision of building a strong sustainable business. Facing the severe situation of tightening resource constraints, serious environmental pollution, and ecosystem degradation, the development of green and low-carbon power has become an important part of future energy development. In terms of future energy utilization, we will go from high-carbon to low-carbon to zero-carbon, realize zero-carbonization of electricity and zero-carbonization of fuels, continue to increase the proportion of renewable energy, and gradually realize energy transformation. With the gradual arrival of the era of carbon neutrality, clean energy with environmental protection advantages will become the key development direction of energy in the future, with long-term development space. Electric vehicles and hydrogen energy solutions are expected to be the fastest-growing markets. The growth of the electric vehicle industry will require significant investment to upgrade the grid and increase generation from renewable sources. Today's commodity energy retail business dominated by pure electricity and natural gas is moving towards an energy transition centered on sustainable development. For example, in 2021 Shell Energy B2B brand MP2 Energy and other affiliated entities entered the US commercial customer market as Shell Energy, to provide an energy brand to meet customers' transformational needs. Shell Energy is working to drive the energy transition by providing commercial customers with more and cleaner energy solutions, including gas, electricity, and an environmentally friendly product portfolio. As a result, B2B energy service companies can provide independent utility and energy management consulting to ensure energy conservation, resilience, and sustainability for their clients. The B2B energy service industry will also continue to expand the market as downstream customers demand more clean and renewable energy.

Marketing and talent barriers

Marketers in the energy industry often face unique challenges because the industry is highly regulated, complex, and highly competitive. B2B energy services need to comprehensively consider industrial design, thermal management, power management, and other aspects, and deeply integrate with application scenarios. Although the energy services market is seen as a key means of improving energy efficiency and the energy services industry is growing in many countries, the lack of consensus among customers on what energy services are and who provides them is challenging. One of the most obvious differences between consumer marketing and B2B marketing is the longer sales cycle. Buyers of B2B energy sourcing often make their decisions after going through a lengthy review process, analyzing and comparing similar products. Energy purchases often involve teams in the decision-making process and B2B energy service providers need to understand the different people that will be involved and ensure they have marketing content that appeals to them. For example, a site manager at a drilling site might choose drilling equipment that can speed up work so his employees can work faster, but an engineer might be interested in the savings in labor costs associated with the equipment. Detailed articles and a proven SEO process can clear up customer confusion and misconceptions about things like solar energy. As such, B2B marketers need to prepare for a longer-term nurturing-based approach to growing revenue. The promotion and service capabilities of market channels depend to a large extent on the talent construction of the enterprise team. In terms of product development, high-level R&D designers can successfully carry out design development and quality control, such as solution bundle quotations, product and service creation, and value-based pricing. The development of marketing channels requires an experienced brand marketing team with a keen perception and quick response to market demand, including brand management, channel and platform operations, and in-depth customer understanding. Therefore, the construction of R&D, production, and sales teams of B2B energy service companies has become one of the barriers to the industry.

Region Overview:

In 2022, the share of the B2B Energy Services and Energy Contracting market in China stood at 57.47%.

Company Overview:

The major players operating in the B2B Energy Services and Energy Contracting market include SGECS, Direct Energy, Ameresco, EDF, Eon, etc. Among which, SGECS ranked top in terms of sales and revenue in 2023.

SGECS

SGECS is a wholly-owned subsidiary of State Grid Corporation of China. Its core business is power grid energy conservation, power demand-side management, construction and operation of new energy storage, energy trusteeship of public institutions, and multi-energy complementary and coordinated supply. Industrial units are directly under the main responsibility of industrial development.

Direct Energy

Direct Energy provides customers with choice and support in managing their energy costs through a portfolio of innovative products and services. Direct Energy operates in 46 U.S. states plus the District of Columbia and 10 provinces in Canada. In 2021, NRG Energy Inc. completed the acquisition of Direct Energy.

Segmentation Overview:

By type, Electricity Supply Solutions segment accounted for the largest share of market in 2022.

Application Overview:

By application, the Industry segment occupied the biggest share from 2018 to 2022.

Key Companies in the global B2B Energy Services and Energy Contracting market covered in Chapter 3:

SSE
SGECS
Direct Energy
EDF
RheinEnergie AG
Breathe Energy
Eon
British Gas
Scottish Power
Ameresco

In Chapter 4 and Chapter 14.2, on the basis of types, the B2B Energy Services and Energy Contracting market from 2018 to 2029 is primarily split into:

Electricity Supply Solutions
Natural Gas Supply Solutions
EV Energy Solutions
Solar Energy Solutions
Battery Storage Solutions
Heat Pumps

In Chapter 5 and Chapter 14.3, on the basis of Downstream Industry, the B2B Energy Services and Energy Contracting market from 2018 to 2029 covers:

Industry
Public Sector
Building

Geographically, the detailed analysis of consumption, revenue, market share and growth rate, historic and forecast (2018-2029) of the following regions are covered in Chapter 8 to Chapter 14:

North America (United States, Canada)
Europe (Germany, UK, France, Italy, Spain, Russia, Netherlands, Turkey, Switzerland, Sweden)
Asia Pacific (China, Japan, South Korea, Australia, India, Indonesia, Philippines, Malaysia)
Latin America (Brazil, Mexico, Argentina)
Middle East & Africa (Saudi Arabia, UAE, Egypt, South Africa)