Avenues for growth within the energy and environment industry
A new study released by Frost & Sullivan presents the top ten business cases that will provide growth opportunities for players within the energy and environment industry.
The top ten growth opportunities are the result of the increases in investments in sustainability, digital transformation and the energy transition made over the past 18 months and include:
Climate-neutral cities: Global cities account for 75% of all greenhouse gas emissions and as a result regulators are pushing for the development and enactment of policies that help accelerate investments in decarbonisation.
As a result, sectors including the energy transition, energy efficiency, and circular economy will present huge growth opportunities for companies as cities seek to decarbonise energy, transportation, homes & buildings and water and waste management services, according to the study.
The need to decarbonise to meet climate action targets has resulted in cities being hubs for technology innovations and demonstrations, states Frost & Sullivan.
Mechanisms currently being implemented to increase climate-neutral cities include the Global Covenant of Mayors for Climate and Energy, and the C40 Cities initiative which has a target to recruit 1,000 cities as well as the European Union’s Green Deal, 100 Climate Neutral and Smart Cities 2030 initiatives.
Solutions with the highest growth opportunities include renewable energy, digital twins and smart mobility.
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Circular economy of resources and Scope 3 emissions: Governments and organisations are increasingly investing in digital technologies such as robotics, artificial intelligence and cloud computing to ensure optimal management of resources and sustainabaility across value chains.
Remote monitoring, operations, automation, data analytics, and artificial intelligence are some of the use cases businesses and cities will increase investments in to enhance operations.
Sustainability as a Service: The increase in investments in sustainability and ESG by industry players evidenced by the deployment of sensors and various digital infrastructure will pave way for increased demand for sustainability as a service offerings, according to Frost & Sullivan.
Hydrogen economy: “Hydrogen is a key part of the solution toolbox in achieving global decarbonisation,” states the report, and as such global economies and utilities will continue to direct capital towards the development of infrastructure to prepare for a hydrogen-based global economy.
Today, the hydrogen market is characterised by the creation of hydrogen conglomerates and efforts to expand production, transportation and storage in addition to rollouts of proof of concepts. The main activities are around the production and delivery of hydrogen at the lowest costs and the production using renewables to ensure the energy transition in a reality at a cost-effective and sustainable manner.
Frost & Sullivan predicts that 200 million tonnes of hydrogen to be produced by 2050 – 75% of which will be green.
Other business models that are expected to provide growth opportunities for companies within the energy and environment sectors include:
- Energy efficiency and automation,
- Cognitive buildings and digital twins,
- Services 2.0,
- Carbon capture utilisation and storage,
- Electrification growth in renewables, and
- Critical power and data center investment.
John Raspin, Partner, Energy & Environment at Frost & Sullivan said: “The transition to a net-zero future for carbon emissions means many companies also face struggles with pricing pressures, commoditisation and industry disruption.
“The competitive landscape for the future of the E&E industry will be different; driven by innovation, market transformation, and disruptive business models.”
Find out more about the Top 10 Growth Opportunities in the Energy & Environment Industry for 2022 – What’s Next?
