Energy ESO Market Likely To Touch At $766.43 Billion By 2027: Grand View Research Inc.
The global energy ESO
market size is estimated to reach USD 766.43 billion by 2027, registering
an estimated CAGR of 18.8% from 2020 to
2027, according to a new report by Grand View Research, Inc. The increasing
investment in renewable energy resources to reduce energy-related Carbon
Dioxide (CO2) emission is the primary factor fueling market growth. Energy
producing industries are shifting toward renewable and nuclear resources. For
instance, according to the International Energy Agency, in 2020, energy-related
emissions reduced after two years of continuous growth in 2017 and 2018 owing
to greater awareness about energy conservation and global warming.
Technological advancements are
expected to support the market growth in the forthcoming years due to the
increasing need for automated, real-time reporting, and analysis of key
performance indicators associated with energy plant operations and equipment
maintenance. These advancements are further expected to offer advanced
capabilities such as hybrid architecture, the Internet of Things (IoT), and
smart grid technology in the energy production and plant digitization process.
Moreover, the emergence of electronic embedded machinery, which enables data
collection, is used for plant and process monitoring, and is reliable in harsh
weather conditions in the oil and gas industry, is expected to further fuel the
energy engineering service outsourcing (ESO) market growth.
The non-renewable segment is expected
to witness a slowdown amidst the outbreak of COVID-19 and its economic
repercussions worldwide, as energy production and distribution involve
challenges related to continuity, productivity, safety, and reliability.
However, outsourced engineering services in the renewable energy segment have
experienced minimal negative effects owing to favorable government initiatives.
For instance, in April 2020, the Ministry of New and Renewable Energy (MNRE),
India, sanctioned a must-run status to renewable energy generation plants. The
ministry also declared that this status would remain unaffected throughout the
lockdown period, which is anticipated to trigger the growth of renewable energy
generation projects over the forecast period.
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Furthermore, the outsourcing firms
leverage advanced engineering tools and technologies to serve their clients,
which is expected to further fuel the market growth. Partnering with service
providers to accelerate Research & Development (R&D) activities has
become common in the energy sector. However, Intellectual Property (IP) and
security threats are two critical factors restraining market growth. The OEMs
and service providers regularly exchange confidential data on project
specifications, technologies, and equipment performances to enhance
collaboration on development, design, and support. Thus, IP management and data
security issues have become increasingly crucial for businesses utilizing
outsourcing services.
Energy ESO Market
Report Highlights
- The digitization segment accounted for
21.3% of the total revenue share of the market in 2020
- The onshore segment is expected to
account for over 60.0% of the revenue share in 2027
- The North American energy ESO market is
expected to witness the fastest CAGR of 20.6% over the next seven years
- The non-renewable energy segment is
expected to register a CAGR of 17.3% over the forecast period
Furthermore, the energy engineering
service providers need to compete on the grounds of pricing and their domain
expertise to prove beneficial for the energy-producing companies. ESPs are
emphasizing the provision of services to address the difficulties experienced
while operating in the energy sector. For instance, power fluctuation is one of
the major issues connecting wind farms to the power network. Hence, ESI Group,
a French provider of virtual prototyping solutions, offers virtual testing technology
for windmill operations. Similarly, Altair Engineering, Inc., a U.S.-based
provider of product engineering, industrial design, and analytics solutions,
offers IoT-based digital transformation services for the energy outsourcing
industry.
Over the past few months, the COVID-19
pandemic has caused an unprecedented global slowdown. It has also affected the
energy sector, thereby delaying the construction of new energy infrastructure
and facilities due to equipment delivery problems. For instance, China, being
the first country affected by the COVID-19 pandemic, is one of the primary
producers of several clean energy equipments, including wind turbines and solar
panels. Delivery and installation of energy-related equipment for renewable
energy companies have been negatively affected due to the pandemic, which has
resulted in the reduced demand for engineering service providers.
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In recent years, ESPs have evolved from providing energy ESO
services from their headquarters to opening key operations and excellence
centers in developing countries. Most leading ESPs provide services for
embedded product engineering, mechanical designs, plant layout designs, and
digital manufacturing solutions. These firms are principally engineering,
procurement, and construction management companies with a global presence. As
the industry has evolved from a domestic to a global domain, it has impelled
companies to form global delivery systems. The market is witnessing robust
growth with numerous domestic and international companies operating across the
regions. Moreover, the key market participants are entering into mergers and
acquisitions to expand their business presence and sustain the competitive
business environment. For instance, in 2017, Altran Engineering, through its
subsidiary Altran U.S., acquired Aricent, a U.S.-based design, and engineering
service provider. With this acquisition, Altran Engineering aimed to leverage
new opportunities and emerging demands from this region. Some prominent players
in the energy engineering service outsourcing (ESO) market include:
·
Altair Engineering, Inc.
·
ALTEN Group
·
ALTRAN
·
Assystem
·
Cyient
·
ESI Group
·
LUXOFT
·
Mott Macdonald
·
QuEST Global Services Pte. Ltd.
·
Rilco Engineering Services
·
Segula Technologies
·
Semcon
·
STAS Engineering
·
Total OutSource, Inc.
About Grand View Research
Grand View Research, Inc. is a U.S. based market research and
consulting company, registered in the State of California and headquartered in San
Francisco. The company provides syndicated research reports, customized
research reports, and consulting services. To help clients make informed
business decisions, we offer market intelligence studies ensuring relevant and
fact-based research across a range of industries, from technology to chemicals,
materials and healthcare.
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More Information:www.grandviewresearch.com
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