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Advanced Energy 2017 Report Shows the Future Is Here: Part 2

— April 25, 2017

While there are competing visions for the future of US energy policy, Advanced Energy Economy (AEE) has built a strong coalition of businesses in support of its vision of US energy policy—advanced energy—defined as “making the global energy system more secure, clean and affordable.”

This blog post is the second in a two-part series covering the key findings of the Advanced Energy Now 2017 Market Report, in its 6th year of publication in partnership with AEE. Navigant Research provides the market data and trend stories in the report.

The report offers a great way for readers to get a glimpse into several of the key trends affecting the global energy landscape covered in depth via Navigant Research syndicated reports, data services, and custom research.

The following are three of the 2017 Market Report key findings:

  • New business model innovation: Evolving energy consumer demands and the increasing ability of customers to exercise choice in a variety of ways are also accelerating a shift toward what Navigant Research calls the Energy Cloud. Customers are increasingly focused on engaging in the generation, purchase, and sale of energy (see the section, “Corporate Procurement of Renewable Energy Gets Creative”). If appropriately incentivized, these also can provide other services such as balancing, voltage support, and voluntary load management, and address broad industry goals of greater efficiency and resilience (see “New York REV Demo Projects Point Toward 21st Century Electricity System”). Meanwhile, a similar transformation is occurring in transportation, as discussed in the “Car Sharing, Electrification, and Automation are Converging into a New Mobility System” section.
  • Infrastructure for the future: replacing, retrofitting, and digitization: The supply and pricing of incumbent fuels and technologies will continue to affect future advanced energy market growth. For example, low oil prices affect natural gas vehicle sales and infrastructure (see the “Natural Gas Fueling Stations Continue Slow Buildout” section). On the other hand, smart transmission, distribution automation systems, and advanced metering infrastructure systems are now mainstream as the digitization of the electric-mechanical infrastructure moves forward. As a result, the grid will increasingly resemble a more sophisticated—but also more resilient and distributed—networked system, as discussed in the “Energy Storage Becomes the Glue for Virtual Power Plants” section.
  • The next frontier is already here: A number of industries reached tipping points or otherwise hit major milestones in 2016. For example, the first offshore wind project in the United States reached completion off the East Coast (see “Rhode Island Lays Foundation for US Offshore Wind”). With a 1,000% increase in revenue since 2011, the plug-in EV market is now eating into the traditional hybrid EV market in the United States and could surpass it in terms of revenue in 2017 (see “Plug-in Vehicle Options Expand, Stimulating Rapid Growth”). Meanwhile, the power of national policy priorities in China, the United States, and Japan continues to stimulate markets for solar PV, biofuels (see “Biofuels Meet Targets”), hydrogen vehicles and infrastructure (“Can Toyota, Honda, and Hyundai Make Hydrogen Work?”), and combined heat and power (CHP; see the section, “CHP provides Onsite Power Generation for Industrial Customers, and Others”).

2017 is shaping up to be another major year for advanced energy market growth—and Navigant Research expects the trends identified in this year’s Advanced Energy Now Market Report to accelerate.

 

Advanced Energy Market Hits $1.4 Trillion: Part 1

— April 21, 2017

Each year, Navigant Research partners with Advanced Energy Economy (AEE) to quantify the size of the US and global advanced energy market and publish the Advanced Energy Now Market Report. AEE is a national association of businesses and business leaders that share in the vision of “making the global energy system more secure, clean and affordable.”

The report presents revenue data across seven major segments and 41 different subsegments that pulls from 60+ Navigant Research market reports. This is the 6th year the report has been published. In this two-part blog series, some of the most important findings in the report are summarized:

  • Advanced energy is a $1.4 trillion global industry, almost twice the size of the global airline industry, and is nearly equal to global apparel revenue.
  • The US advanced energy industry generates nearly $200 billion in revenue, nearly double beer sales, equal to pharmaceutical manufacturing, and approaching wholesale consumer electronics.

In addition to quantifying the 41 advanced energy subsegments that make up the advanced energy market (each with multiple product categories), the report features 17 trend stories across the seven market segments. These can be rolled up into five overarching trends that are shaping the future of advanced energy. Two of these trends are featured here; the other three are summarized in part two of this blog series:

  • The rise of big data analytics: The use of software engines and algorithms to process and analyze large quantities of data and provide insights into how customers behave is changing the way companies do business across the economy, and energy is no exception. The section, “Big Data Drives Demand-Side Management Innovation,” discusses how, in recent years, utilities and energy efficiency providers have used new data tools (home energy reports, web portals, and mobile apps) to unlock cost and energy savings for customers. The “Energy Use? Yes, There’s an App for That” section profiles energy applications that are targeting the $2.3 billion global residential home energy management systems market. Meanwhile, amid the digitization of energy—which has offered up the Internet of Things, connected devices, smart grid, and even automated vehicles to consumers—new challenges have arisen, including cybersecurity. This is discussed in the “As the Grid Goes Digital, Cybersecurity Gains Importance” section.
  • Hardware cost declines: Advanced energy technology deployment continues to exhibit dramatic growth rates, enabled in large part by cost declines in hardware such as solar PV modules (see “Solar PV Sets New Records Nationally and Globally”), LED lighting, and increasingly, battery technology—with gigafactories being built around the globe to produce these items at scale. The extreme pace of these cost and commensurate price declines have restrained market revenue growth, as outlined in this report. In response to increasing market maturity and tight margins, advanced energy companies in many sectors are undergoing a shift to services, as discussed in the “Lighting as a Service” section. Market consolidation and vertical integration, scaling of manufacturing, and fierce competition are expected to drive further cost reductions in the future.
 

2014 U.S. Advanced Energy Market Reached Nearly $200 Billion

— June 15, 2015

Along with several colleagues, I recently completed work on the Advanced Energy Economy 2015 Market Report. This is the third year Navigant has produced the report, commissioned by Advanced Energy Economy, a national association of business leaders with the goal of making the global energy system more secure, clean, and affordable. The group has grown rapidly under the leadership of Graham Richard, and effectively takes an inclusive approach to clean energy, transportation, buildings, and other key segments of the U.S. and global energy marketplace.

The annual report tallies revenue from electric vehicles, nuclear, biofuels, solar, and natural gas plants, along with demand response, smart parking systems, transmission, energy efficient lighting, and many others sectors. Today, the report encompasses a large portion of the Navigant Research library of data–spanning more than 60 market research reports and touching more than 80 different industries.

In 2014, the report concludes, the deployment of advanced energy technologies and services in the United States represented nearly a $200 billion market, and $1.3 trillion globally. That makes the global advanced energy market as big as the apparel and fashion industry worldwide, and almost 4 times the size of the semiconductor industry. In the United States, the market for advanced energy is bigger than the airline industry, equal to pharmaceuticals, and nearly as big as consumer electronics. U.S. advanced energy revenue grew 14% from 2013 to 2014–5 times faster than the U.S. economy overall.

Other findings worth highlighting include:

  • Building efficiency became the largest advanced energy sector, at $60 billion in 2014, led by residential energy efficient lighting ($9.7 billion).
  • The shale gas revolution in the United States has translated into an increase in sales of new generating equipment, with revenue from natural gas turbines up 48% year-over-year, to $6.4 billion.
  • Electric vehicle charging infrastructure continues to show strong growth, up 31% to 2014 revenue of $201.5 million. EV charging station revenue has risen 7-fold over the past 4 years.

The Growing Reach of the Energy Cloud

A number of the key trends covered in this report demonstrate the growing reach of the energy cloud. As detailed in Navigant Research’s recent white paper, The Energy Cloud, this term refers to the spread of intelligent networks of energy assets that are increasingly located onsite, commonly referred to as distributed energy resources (DER). These networks often come under fire from incumbent generators and grid operators for eating into utility revenue. Consumers, on the other hand, are benefiting from lower energy prices and a more reliable grid, thanks to the rapid proliferation of the cloud.

On the political side, the rapid growth of the advanced energy sector may offer policymakers a framework (backed up by plenty of data) that makes clean energy palatable to the diverse stakeholders looking for ways to comply with, and even profit from, the EPA’s Clean Power Plan.  It’s hard to argue against a $1.3 trillion market.

 

Advanced Energy Is $1.13 Trillion Market

— April 11, 2014

The publication of the Fifth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC), Climate Change 2014: Impacts, Adaptation, and Vulnerability, made headlines recently with a familiar message: The climate is warming, people are causing it, and we are ill prepared to deal with the direct and indirect effects of climate change.

Indeed, it is a grim outlook, but when looking at one indicator not covered in the IPCC report – revenue from deployment of smart energy technologies – there are signs that things are moving in the right direction to reduce emissions.

One group, the Advanced Energy Economy (AEE), is a national association of businesses and business leaders who seek to make the global energy system more secure, clean, and affordable.  The group takes a big tent approach to clean energy.  It is bankrolled by one of the leading advocates and funders for the United States taking a leadership position in deploying clean energy, Tom Steyer.  AEE has identified seven core segments that make up the advanced energy industry: transportation, electricity generation, fuel production, electricity delivery and management, fuel delivery, buildings, and industry.

For the past 2 years, AEE has commissioned Navigant Research to quantify the advanced energy industry market sizes for the United States and globally.  We have identified 41 categories and 80-plus subcategories that meet the AEE definition and put the detailed findings and key trends in the report, Advanced Energy Now 2014 Market Report.  Below are some key findings from the report that illustrate the breadth and depth of technologies that are capable of reducing emissions and U.S. activity in those markets.

Key Findings

  • The global advanced energy market reached an estimated $1.13 trillion in 2013.
  • In the United States, the advanced energy market was an estimated $168.9 billion in 2013 – 15% of the global advanced energy market, up from 11% in 2011.
  • Advanced transportation is booming: Navigant Research forecasts annual plug-in electric vehicle sales will reach approximately 467,000 vehicles in the United States and 80,000 in Canada by 2022 – slightly faster than hybrid electric vehicles sales grew in their first decade.
  • The United States accounted for an estimated 18% of the global solar PV market that approached $100 billion annually in 2013 and far surpassed 100 GW of cumulative installations in 2013.
  • LEDs are expected to be the leading lighting technology over the next decade, with LED lighting products (including lamps and luminaires) in commercial building markets forecast to grow from $2.7 billion in 2013 to more than $25 billion in 2021.
 

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