When they look around the corner as the energy future, what do giant firms such as Siemens, MacQuarie Group, Schneider Electric and Carlyle Group see?
They see a future in energy as a service, focusing of handling on-site power and microgrid costs upfront for clients, then having those investments paid back over an extended service period.
Research and Markets also sees that potential in a recent report, forecasting that energy as a service could reach $88 billion global market value within seven years. This would average a compound annual growth rate of about 8.6 percent from 2000-2007, according to the report summary.
Electricity accounts for a major share of commercial, industrial and mission-critical facility costs. And, in the post pandemic world, Research and Markets argues that crumbling energy infrastructure will drive up electricity prices.
“Energy generation and supply is no longer only about selling energy as a kilowatt-hour rate (kWhr). Energy is being sold to customers in the form of a service. Increased potential for behind-the-meter services, decentralized energy generation, energy storage and electricity exchange through local networks has made the concept of EaaS (Energy-as-a-Service) an important enabler of demand side management.”
Earlier this year, Siemens and private equity firm Macquarie Group’s Green Investment Group joined in a venture to create Calibrant Energy, focused on energy as a service opportunities. Last year, Schneider Electric and investment giant Carlyle Group created Alphastruxure to deliver micogrid solutions marketwide.
“It’s outsourcing that capital investment risk and complexity,” John Kovach, head of energy and performance services for Siemens Smart Infrastructure in the Americas, said in a recent interview with Power Engineering. “Most of our customer’s core business isn’t distributed energy; for a hospital the core business is health care…so outsourcing energy to somebody like Calibrant makes a lot of sense.”
Most of these projects will have timelines of 20 years or longer. They will include some combination of solar, energy storage, on-site gensets. These tandems offer flexibility and backup energy resources for C&I corporate entities.
(Rod Walton is content director for Power Engineering, POWERGEN International and the virtual POWERGEN+ series happening next Monday and Tuesday. He can be reached at 918-831-9177 and firstname.lastname@example.org).