Energy ESO Market

The market size of energy ESO globally was estimated to be US$236.46 billion in 2021. The ESO energy market is anticipated to grow at a CAGR (Compound Annual Growth Rate) of 17.4% over the forecast period, eventually reaching a value of 1000.72 billion US dollars by the year 2030.

Market Overview

The energy ESO market is expected to grow between 2022 and 2030 and will likely achieve the highest compound annual growth rate in the projected era due to multiple factors. ESO primarily refers to energy engineering service outsourcing. The practice focuses on contracting 3rd party ESPs (energy service providers) to perform their in-house tasks.

Moreover, as energy services providers adopt mature and more advanced systems, they can provide more stable, top-quality, and consistent services to their business clients. Hence, businesses prefer to choose ESO as a reliable solution for personnel cost-cutting.

Key Report Findings

• The global energy ESO market is poised to experience growth, fueled by rapid urbanization and digitization.
• Factors like the increasing adoption of modernized engineering technology by companies globally and the high availability of skilled labor proliferate market growth prospects.
• Key market players continue to invest in R&D activities to ensure uninterrupted and efficient power supply across various applications and meet customer demands successfully.
• North America and Asia Pacific are expected to witness the fastest energy ESO growth during the projected period. North America will lead the market due to its high adoption of renewable energy resources. At the same time, Asia Pacific will experience a major boost in the industry's growth because of the availability of skilled and cheap labor.

Market Drivers

Rapid Digitization

The key driver for the global energy ESO market growth is rapid digitization. Several global ESPs have facilitated various technology development projects related to smart-grid management, virtual prototyping, embedded PE (product engineering), and plant digitization. These projects are expected to tremendously augment the energy sector's growth during the forecast period.

Increasing Urbanization and Industrialization

The growth in urbanization and industrialization activities worldwide has resulted in a high demand for uninterrupted and efficient power supply. Hence, this demand is expected to boost energy ESO industry growth as companies invest more to increase operational efficiencies to bridge the consumer demand and supply gap.

Ongoing Investments in R&D Activities

Another major industry growth factor is the massive increase in R&D activities. Industry players continue to invest heavily in research and development projects and partner with engineering service companies to discover new ways to meet the demand and increase their profit margins. Hence, these ongoing investments in research and development activities are estimated to boost energy ESCO industry growth globally.

Technology Advancements

The advances in technology will propel the energy sector too. Technologies like the increasing integration of big data, sensors, analytics, and the Internet of Things will help industry players speed up tasks and maximize performance.

Market Opportunities

Increase in Modernized Engineering Technology Adoption

The rapid adoption of new and modernized engineering tools and technologies by outsourcing organizations to empower clients to exchange crucial and confidential project data safely is also expected to provide opportunities for market growth. Industry players are adopting these tools rapidly as they need crucial real-time analytic systems to develop a better understanding of and manage the energy sector demands.

Skilled Workforce

One of the key factors for industry growth is access to a skilled labor force. Trained people are required by companies who can use technologies to their full potential, which is much needed to achieve operational efficiencies and overall market growth.

Hence, OEMS (original equipment manufacturers) can tap the availability of cheap and skilled labor available in abundance by outsourcing their in-house tasks to engineering companies and lower personnel costs significantly. They can get the job done fast and cost-efficiently.

Environmental Sustainability

The energy sector represents three clusters. These are renewable energy, non-renewable and chemical production. The conscious shift from non-renewable to renewable energy to achieve environmental sustainability also presents industry growth prospects. Research studies show that the renewable energy segment is expected to garner the highest compound annual growth rate during the forecast period because of the increasing environmental consciousness.

Market Challenges

Security and IP Threats

The growing risk of security and intellectual property threats pose serious challenges to energy ESO growth. IP plays a pivotal role in helping companies protect their R&D to differentiate in the aggressive competitive market and maximize business returns. However, when IP is at risk it may refrain companies from making big investments. Business security is a top concern for companies across industries. However, if strict global regulations for intellectual property protection and violation are imposed, it might help create a more secure environment for industry players to operate confidently while keeping the risk at bay.

Regional Coverage

The market for energy ESO demonstrates a strong global presence, with growth observed across various regions. The market's regional coverage includes:

North America

• Canada
• United States

Europe

• United Kingdom
• Germany
• France

Asia Pacific

• China
• India
• Japan
• South Korea
• Malaysia
• Philippines

Latin America

• Brazil
• Rest of Latin America

Middle East and Africa

• Central Africa
• GCC countries
• North Africa
• South Africa
• Rest of the Middle East and Africa

Each region presents unique market dynamics influenced by factors such as top market players, and technological advancements. Market growth is driven by the ever-increasing adoption of the latest and modernized engineering tools and technologies. On the other hand, North America is expected to witness the fastest rate of industry growth owing to the rapid renewable energy adoption.

Company Recent Developments

The key industry players of the Energy ESO market include but are not limited to:

• Alten Group
• Altran Engineering
• ARM Energy
• Cyient
• LUXOFT
• Total Outsource Inc.
• Altair Engineering, Inc.
• Altran
• Stas Engineering
• Mott Macdonald
• ESI Group
• Semcom
• Quest Global Services Pte. Ltd
• Assystem

The ongoing investments in R&D activities, strategic partnerships, and collaborations have fueled the industry –propelling it to achieve new milestones and witness staggering growth. Some recent industry developments include the following:

Altran Engineering completed its acquisition of Aricent, a US engineering service company. This acquisition aims to tap new market opportunities to meet the industry demand and supply efficiently.

Likewise, the collaboration between ARM Energy and Tech Mahindra in 2021 for their project launch the ARM 5G Solutions is a great industry development worthy of being highlighted. This collaboration between key industry players aims at creating end-to-end and reliable solutions in a live test environment. It focuses on network infrastructure innovation and unleashing the amazing benefits of 5G such as remote CPC (critical process control), asset diagnostics, supply chain monitoring, and predictive maintenance.