Executive Insight, Generation, Natural Gas

Advanced energy market nearly $1.3 trillion global industry — big as apparel

Advanced Energy Economy

At nearly $1.3 trillion in estimated global revenue for 2014, the market for advanced energy products and services is as large as apparel and fashion and nearly four times the size of the semiconductor industry worldwide, according to a report commissioned by Advanced Energy Economy (AEE), a national business association.

In the U.S., advanced energy market revenue grew 14 percent in 2014 — five times the rate of the U.S. economy overall — to just under $200 billion, making it bigger than the airline industry, equal to pharmaceuticals and nearly equal to consumer electronics in this country.

The study, conducted by Navigant Research, found that advanced energy in the U.S. was an estimated $199.5 billion market in 2014, up 14 percent from 2013 ($169 billion), and five times the rate of growth of the U.S. economy overall. Areas of growth included solar energy (up 39 percent) and natural gas generating equipment (48 percent), in long-anticipated response to lower-priced natural gas supplies. Wind power, which suffered a severe setback in 2013 as a result of the on-again, off-again federal production tax credit (PTC), rebounded in 2014 with fourfold growth to $8.2 billion, and a pipeline of projects that could result in revenue rivaling the $25 billion realized in 2012, its biggest year to date.

“This report shows that advanced energy is a vibrant industry that is driving economic growth,” said Graham Richard, CEO of AEE. “Across the country and around the world, advanced energy companies are delivering technologies and services that make the energy we use secure, clean and affordable. AEE is committed to bringing together business leaders and policymakers to accelerate the progress of this industry.”

“Advanced Energy Now 2015 Market Report” is the third annual report of market size by revenue of the advanced energy industry worldwide and in the U.S., produced by Navigant Research for AEE. This year’s report contains four years of revenue data, starting with 2011. Among the findings:

  • With global revenue up 12 percent over 2013, 2014 was the biggest growth year for advanced energy worldwide since AEE began tracking these markets in 2011.
  • U.S. advanced energy revenue has grown 38 percent over the four years from 2011 to 2014. U.S. advanced energy represents 15 percent of the world market.
  • With the addition of new revenue data on residential energy efficient lighting, building efficiency is the largest segment of the U.S. advanced energy market, with revenue of $60.1 billion in 2014. Counting only those products for which AEE has four years of data, revenue growth in building efficiency is 43 percent over four years.
  • In 2013, the severe downturn in wind energy because of uncertainty over the federal PTC, with revenue dropping to $2.1 billion from $25.5 billion in 2012, was enough to offset growth in other segments of U.S. advanced energy to show an overall decline of 4 percent year over year. But wind bounced back in 2014 to $8.2 billion, nearly four times 2013 revenue.
  • Including wind, the electricity generation segment of advanced energy grew 47 percent overall in the U.S. to $45.8 billion in 2014. Solar photovoltaic (PV) revenue was up 39 percent to $22.5 billion, capping four-year growth of 173 percent. Natural gas generating equipment (combined-cycle and simple-cycle gas turbines) saw an increase for the first time in four years, with U.S. revenue up 48 percent to $6.4 billion — a sign that the natural gas revolution is translating into new orders, not just higher use of existing natural gas power plants.
  • The U.S. fuel production segment reached $49 billion in 2014, up from a revised 2013 total of $48.4 billion, with $39.1 billion of that total from sales of ethanol.
  • In transportation, U.S. revenue for hybrid vehicles was down 19 percent but up 34 percent for plug-in electric vehicles while natural gas-powered vehicles jumped 26 percent in revenue. Revenue from electric vehicle charging stations was up 31 percent in the U.S. to $201.5 million, up sevenfold from 2011.

“Advanced Energy Now 2015 Market Report” contains 17 feature articles on significant trends and developments, ranging from smart parking systems and biofuels for specialized markets and emerging economies to industrial energy management and energy storage.

Click here for report