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Ecova Buy Builds GDF Suez’s Demand-Side Business

Eric Bloom — June 6, 2014

On May 30, French energy giant GDF Suez acquired energy management company Ecova for $335 million through its energy services unit, Cofely. Founded in 1995 as WWP Energy Solutions, Ecova started out as a utility bill management company that helped customers better understand their energy bills.  Over time, the company expanded into adjacent businesses such as energy procurement, waste management, and telecom.

As demand for energy management and sustainability tools grew in the late 2000s, the company acquired other specialist firms, such as Ecos Consulting, The Loyalton Group, and Prenova, a building energy management systems (BEMS) company.  This organic growth enabled Ecova to get an early lead in terms of acquiring Fortune 500 customers focused on energy management, such as Shell and Starwood Hotels.

GDF Suez, though perhaps known best as a power supplier with operations primarily in France, Belgium, and the Netherlands, has diversified its portfolio over time and, through its suite of subsidiaries, is now a major energy services provider.  Of its €17 billion ($23.2 billion) in total annual revenue, 6% – or €1.0 billion, is in energy services, including facility construction, operations & maintenance, and energy efficiency retrofit services.  The company is also more international today than in the past, with 25% of its revenue coming from outside Europe.

Blurred Lines

The Ecova acquisition propels GDF Suez forward in its pursuit of broad energy efficiency services.  In addition, Ecova’s intelligent, software-based platform complements Cofely’s more traditional approach to energy efficiency via HVAC, lighting, and building automation system (BAS) retrofits, allowing it to provide enterprise-level energy management for GDF Suez’s global customers.

From a geographical point of view, the acquisition provides GDF Suez a platform for engaging a broader set of energy service customers in North America while accomplishing largely the same for Ecova, as it aims to expand beyond North America.  It also brings GDF Suez in closer competition with French rivals such as Schneider Electric, which acquired a close Ecova competitor, Summit Energy, in 2011.

By bringing more intelligent building capabilities in-house, GDF Suez is positioning itself as a broad energy services provider for buildings, and this acquisition symbolizes the continuing blurring of the lines between the energy and buildings industries.

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