Energy services in North America 2014

Transcription

1 Energy services in North America 2014 A multi client study By Gambi Chiang Helen Bedford March 2014

2 Energy services in North America 2014 Contract: Report 57237/1 Date: March 2014 Issued by: BSRIA Limited Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH UK Telephone: +44 (0) Fax: +44 (0) E: W: Compiled by: Name: Gambi Chiang Helen Bedford Approved by: Name: Jeremy Towler Gambi Chiang All rights reserved. This document may not be reproduced, transmitted or redistributed in part or full without prior written consent from a BSRIA Director. BSRIA Page 3 of 105 Report 57237/1

3 CONTENTS CONTENTS 1 EXECUTIVE SUMMARY INTRODUCTION Background Methodology Scope of the study Acknowledgements WHAT IS ENERGY SERVICES Definition of energy services Energy supply trend Energy prices Market structure and supply chain MARKET ANALYSIS Market size and potential Market drivers and obstacles End user demand analysis Government Healthcare Education Data centre Retail Industrial Owner occupied Multi-tenant Supply market Analysis Energy services offerings Current player group Merger and acquisition New entrants Market trends Financing Commercial banks and financial players PACE (Property Assessed Clean Energy) Energy Savings Warranty Program On-bill Financing program Energy Services Agreement Power Purchase Agreement (for renewable installation) Innovative financing ENERGY RETROFIT Market size Drivers and obstacles Offering and solution trends Purchasing process and criteria Market competition Key success factors ENERGY PERFORMANCE CONTRACTING Market definition and major characteristics Business model Market size Drivers and obstacles Offering and solution trends Purchasing process and criteria Market competition Key success factors...47 BSRIA Page 4 of 105 Report 57237/1

4 CONTENTS 7 ENERGY PROCUREMENT Energy procurement Market definition Market size and outlook Drivers and obstacles Offering and solution trends Market players MAJOR ESCOS Profile of major players Ameresco Chevron Energy Solution Energy Systems Group Honeywell Johnson Controls McKinstry Essention Noresco Schneider Electric Siemens Trane Highlight of other national and regional players ABM Bundled Energy Solutions Constellation Energy Control Inc. (ECI) and OpTerra Energy Group Pepco Energy Services, Inc Major local players by region California Florida Ohio Texas Midwest Northeast Southeast Northwest Canada Other companies DTZ Econoler UGI Performance Solution APPENDICES APPENDIX: A STATES AND CITIES THAT HAVE MANDATORY REGULATION FOR ENERGY DATA SUBMISSION APPENDIX: B CONSTRUCTION & MACROECONOMIC FACTORS BSRIA Page 5 of 105 Report 57237/1

5 CONTENTS TABLES Table 1 Total energy services market size, f Table 2 Summary on the drivers and obstacles of energy services market Table 3 List of ESCOs by company background Table 4 Customer s perception on ESCOs from different background Table 5 Summary on market trends and the effects on existing players Table 6 List of states that have PACE program Table 7 Energy retrofit market size, f Table 8 Summary of drivers and obstacles for energy retrofit Table 9 Energy performance contracting (EPC) market size, f Table 10 Leading ESCOs ranking and market share, Table 11 Summary of the drivers and obstacles of Energy Procurement Market Table 12 Energy Procurement Market business models Table 13 Energy procurement market fee structure Table 14 List of ESCOs in California Table 15 List of ESCOs in Florida Table 16 List of ESCOs in Ohio Table 17 List of ESCOs operating in Texas Table 18 List of ESCOs operating in Midwest Table 19 List of ESCOs in Northeast Table 20 List of ESCOs in Southeast Table 21 List of ESCOs in Northwest Table 22 List of ESCOs in Canada Table 23 US general economic forecast indicators, Table 24 Canada general economic forecast indicators, FIGURES Figure 1 Market size of the energy services market Figure 2 Net energy generation from different sources in US, Figure 3 US Shale gas production , millions barrels per day Figure 4 Projected cumulative retirements of coal-fired generating capacity , gigawatts Figure 5 Electricity Deregulation by US state, Figure 6 Trend on crude oil and natural gas prices Figure 7 Historic natural gas prices in US Figure 8 Natural gas prices in US , nominal US$ Figure 9 Electricity prices in US , nominal US$ Figure 10 Energy prices for commercial sector in Canada , US$ Figure 11 Energy prices for industrial sector in Canada , US$ Figure 12 Total energy services market size, f Figure 13 ESCO industry revenues by market sector, Figure 14 Explanation on the PACE model Figure 15 Explanation of the On-bill financing model Figure 16 Explanation on the Energy Services Agreement (ESA) model Figure 17 Energy retrofit market size, f Figure 18 Business model of energy performance contracting Figure 19 Energy performance contracting (EPC) market size, f Figure 20 Overview of the ESCO selection process used by the federal government Figure 21 Main services as part of energy procurement Figure 22 Energy procurement process Figure 23 Energy procurement market assessment methodology Figure 24 Energy procurement market size, f Figure 25 Energy procurement fee types Figure 26 Energy procurement market players BSRIA Page 6 of 105 Report 57237/1

6 Energy services in North America 2014 A multi client study By Gambi Chiang Helen Bedford March 2014

7 Energy services in North America 2014 Contract: Report 57237/1 Date: March 2014 Issued by: BSRIA Limited Old Bracknell Lane West, Bracknell, Berkshire RG12 7AH UK Telephone: +44 (0) Fax: +44 (0) E: W: Compiled by: Approved by: Name: Gambi Chiang Name: Jeremy Towler Helen Bedford Gambi Chiang All rights reserved. This document may not be reproduced, transmitted or redistributed in part or full without prior written consent from a BSRIA Director. BSRIA Page 3 of 24 Report 57237/1

8 CONTENTS CONTENTS 1 EXECUTIVE SUMMARY Background Methodology Scope of the study Acknowledgements WHAT IS ENERGY SERVICES Definition of energy services Energy supply trend Energy prices Market structure and supply chain MARKET ANALYSIS Market size and potential Market drivers and obstacles End user demand analysis Government Healthcare Education Data centre Retail Industrial Owner occupied Multi-tenant Supply market Analysis Energy services offerings Current player group Merger and acquisition New entrants Market trends Financing Commercial banks and financial players PACE (Property Assessed Clean Energy) Energy Savings Warranty Program On-bill Financing program Energy Services Agreement Power Purchase Agreement (for renewable installation) Innovative financing ENERGY RETROFIT Market size Drivers and obstacles Offering and solution trends Purchasing process and criteria Market competition Key success factors ENERGY PERFORMANCE CONTRACTING Market definition and major characteristics Business model Market size Drivers and obstacles Offering and solution trends Purchasing process and criteria Market competition Key success factors ENERGY PROCUREMENT BSRIA Page 4 of 24 Report 57237/1

9 CONTENTS 6.1 Energy procurement Market definition Market size and outlook Drivers and obstacles Offering and solution trends Market players MAJOR ESCOS Profile of major players Company Highlight of other national and regional players Major local players by region California Florida Ohio Texas Midwest Northeast Southeast Northwest Canada Other companies DTZ Econoler UGI Performance Solution APPENDICES APPENDIX: A STATES AND CITIES THAT HAVE MANDATORY REGULATION FOR ENERGY DATA SUBMISSION APPENDIX: B CONSTRUCTION & MACROECONOMIC FACTORS TABLES Table 1 Total energy services market size, f Table 2 Summary on the drivers and obstacles of energy services market Table 3 List of ESCOs by company background Table 4 Customer s perception on ESCOs from different background Table 5 Summary on market trends and the effects on existing players Table 6 List of states that have PACE program Table 7 Energy retrofit market size, f Table 8 Summary of drivers and obstacles for energy retrofit Table 9 Energy performance contracting (EPC) market size, f Table 10 Leading ESCOs ranking and market share, Table 11 Summary of the drivers and obstacles of Energy Procurement Market Table 12 Energy Procurement Market business models Table 13 Energy procurement market fee structure Table 14 List of ESCOs in California Table 15 List of ESCOs in Florida Table 16 List of ESCOs in Ohio Table 17 List of ESCOs operating in Texas Table 18 List of ESCOs operating in Midwest Table 19 List of ESCOs in Northeast Table 20 List of ESCOs in Southeast Table 21 List of ESCOs in Northwest Table 22 List of ESCOs in Canada Table 23 US general economic forecast indicators, BSRIA Page 5 of 24 Report 57237/1

10 CONTENTS Table 24 Canada general economic forecast indicators, FIGURES Figure 1 Market size of the energy services market Figure 2 Net energy generation from different sources in US, Figure 3 US Shale gas production , millions barrels per day... 8 Figure 4 Projected cumulative retirements of coal-fired generating capacity , gigawatts... 8 Figure 5 Electricity Deregulation by US state, Figure 6 Trend on crude oil and natural gas prices Figure 7 Historic natural gas prices in US Figure 8 Natural gas prices in US , nominal US$... 8 Figure 9 Electricity prices in US , nominal US$... 8 Figure 10 Energy prices for commercial sector in Canada , US$... 9 Figure 11 Energy prices for industrial sector in Canada , US$... 9 Figure 12 Total energy services market size, f Figure 13 ESCO industry revenues by market sector, Figure 14 Explanation on the PACE model Figure 15 Explanation of the On-bill financing model Figure 16 Explanation on the Energy Services Agreement (ESA) model Figure 17 Energy retrofit market size, f Figure 18 Business model of energy performance contracting Figure 19 Energy performance contracting (EPC) market size, f Figure 20 Overview of the ESCO selection process used by the federal government Figure 21 Main services as part of energy procurement Figure 22 Energy procurement process Figure 23 Energy procurement market assessment methodology Figure 24 Energy procurement market size, f Figure 25 Energy procurement fee types Figure 26 Energy procurement market players BSRIA Page 6 of 24 Report 57237/1

11 1 EXECUTIVE SUMMARY Figure 1 Market size of the energy services market 2013 Purchasing trend Market competition Energy services market outlook 1.1 BACKGROUND 1.2 METHODOLOGY 1.3 SCOPE OF THE STUDY 1.4 ACKNOWLEDGEMENTS BSRIA Page 7 of 24 Report 57237/1

12 2 WHAT IS ENERGY SERVICES 2.1 DEFINITION OF ENERGY SERVICES 2.2 ENERGY SUPPLY TREND Figure 2 Net energy generation from different sources in US, Source: EIA Figure 3 US Shale gas production , millions barrels per day Source: EIA, 2013 Figure 4 Projected cumulative retirements of coal-fired generating capacity , gigawatts Source: EIA, 2013 Deregulation overview - United States Figure 5 Electricity Deregulation by US state, 2012 Deregulation overview - Canada 2.3 ENERGY PRICES Figure 6 Trend on crude oil and natural gas prices Source: EIA Natural Gas prices Figure 7 Historic natural gas prices in US Source: EIA Figure 8 Natural gas prices in US , nominal US$ Source: EIA, 2014 Electricity prices Figure 9 Electricity prices in US , nominal US$ Source: EIA, 2014 BSRIA Page 8 of 24 Report 57237/1

13 Canada Energy Prices Figure 10 Energy prices for commercial sector in Canada , US$ Source: National Energy Board, Canada, 2013 Figure 11 Energy prices for industrial sector in Canada , US$ Source: National Energy Board, Canada, MARKET STRUCTURE AND SUPPLY CHAIN BSRIA Page 9 of 24 Report 57237/1

14 3 MARKET ANALYSIS 3.1 MARKET SIZE AND POTENTIAL Table 1 Total energy services market size, f Total market size US$ million EPC Energy retrofit Energy procurement Total Total market size change, % EPC change Energy retrofit change Energy procurement change f 2015f 2016f Figure 12 Total energy services market size, f 3.2 MARKET DRIVERS AND OBSTACLES Table 2 Summary on the drivers and obstacles of energy services market Drivers Obstacles Energy and operation cost saving Funding for deferred maintenance and upgrades Government targets on energy/ carbon reduction Incentives Legislation on disclose of energy efficiency information Green image Hurdle in financing Low energy price in the past few years Unfavourable state legislation Lack of understanding and trust BSRIA Page 10 of 24 Report 57237/1

15 3.3 END USER DEMAND ANALYSIS Figure 13 ESCO industry revenues by market sector, 2011 Source: Lawrence Berkeley National Laboratory Government Federal State Local Healthcare Education Data centre Retail Industrial Owner occupied Multi-tenant 3.4 SUPPLY MARKET ANALYSIS Energy services offerings Current player group Large ESCOs Table 3 List of ESCOs by company background Independent / contracting Utilities / Power generation and distribution Manufacturer Facilities Management / consultant BSRIA Page 11 of 24 Report 57237/1

16 Local ESCOs Table 4 Customer s perception on ESCOs from different background ESCO background Customer perception Merger and acquisition New entrants 3.5 MARKET TRENDS Table 5 Summary on market trends and the effects on existing players Market trends Effect on existing players 3.6 FINANCING Commercial banks and financial players PACE (Property Assessed Clean Energy) Table 6 List of states that have PACE program States with PACE program in place Figure 14 Explanation on the PACE model Source: WEF, GE Capital Real Estate, Energy Savings Warranty Program BSRIA Page 12 of 24 Report 57237/1

17 3.6.4 On-bill Financing program Figure 15 Explanation of the On-bill financing model Energy Services Agreement Figure 16 Explanation on the Energy Services Agreement (ESA) model Power Purchase Agreement (for renewable installation) Innovative financing BSRIA Page 13 of 24 Report 57237/1

18 4 ENERGY RETROFIT 4.1 MARKET SIZE Table 7 Energy retrofit market size, f Total market size, US$ million EPC Total market size change, % EPC Change f 2015f 2016f Figure 17 Energy retrofit market size, f 4.2 DRIVERS AND OBSTACLES Table 8 Summary of drivers and obstacles for energy retrofit Drivers Obstacles 4.3 OFFERING AND SOLUTION TRENDS 4.4 PURCHASING PROCESS AND CRITERIA 4.5 MARKET COMPETITION 4.6 KEY SUCCESS FACTORS BSRIA Page 14 of 24 Report 57237/1

19 5 ENERGY PERFORMANCE CONTRACTING 5.1 MARKET DEFINITION AND MAJOR CHARACTERISTICS Figure 18 Business model of energy performance contracting Business model 5.2 MARKET SIZE Table 9 Energy performance contracting (EPC) market size, f Total market size, US$ million EPC Total market size change, % EPC Change f 2015f 2016f Figure 19 Energy performance contracting (EPC) market size, f 5.3 DRIVERS AND OBSTACLES Monetary benefit Legislation and government initiatives Innovative financing product available Long term contract is not suitable for private sector Lack of skill-set 5.4 OFFERING AND SOLUTION TRENDS 5.5 PURCHASING PROCESS AND CRITERIA Figure 20 Overview of the ESCO selection process used by the federal government Sources: BSRIA BSRIA Page 15 of 24 Report 57237/1

20 5.6 MARKET COMPETITION Table 10 Leading ESCOs ranking and market share, 2013 Ranking in descending order Johnson Controls Ameresco Siemens Honeywell Noresco (part of United Technologies) Chevron Energy Solution Pepco Schneider Electric McKinstry Essention Trane Energy Systems Group Market share Total share Note: The ranking and market share is estimated based on comments from the industry, company supplied information and company s published financial data. 5.7 KEY SUCCESS FACTORS BSRIA Page 16 of 24 Report 57237/1

21 6 ENERGY PROCUREMENT 6.1 ENERGY PROCUREMENT Market definition Energy procurement - Definition Figure 21 Main services as part of energy procurement Figure 22 Energy procurement process, Tradition Energy, Amerex Market size and outlook Figure 23 Energy procurement market assessment methodology Routes to market Current state of the market Trends in verticals Market characteristics Figure 24 Energy procurement market size, f Renewables Drivers and obstacles Table 11 Summary of the drivers and obstacles of Energy Procurement Market Drivers Obstacles BSRIA Page 17 of 24 Report 57237/1

22 6.1.4 Offering and solution trends Table 12 Energy Procurement Market business models Type of business model Online Overview Description Companies Strengths Weaknesses Own trading platform Companies Strengths Weaknesses Integrated nationals/multinationals Companies Strengths Weaknesses Energy marketing/supply companies Energy services firms (ESCO) Companies Strengths Weaknesses Affiliated utility marketers Consultants Companies Strengths Weaknesses Energy brokers BSRIA Page 18 of 24 Report 57237/1

23 Table 13 Energy procurement market fee structure Type of Energy Procurement Fee Structure Fixed Fee/ Nil Rate Flexible Monthly or Variable Rate Fee Hybrid Fee No Fee or Discrete Fee Description Figure 25 Energy procurement fee types Trends Market players Figure 26 Energy procurement market players Company name Company Info Energy Procurement Services Business Structure No. of Employees in Energy Procurement Services Estimated Revenue in Energy Procurement Services Offerings in Energy Procurement Services Geographical Coverage Strength and Focus Vertical Market BSRIA Page 19 of 24 Report 57237/1

24 7 MAJOR ESCOS 7.1 PROFILE OF MAJOR PLAYERS Company 1 Company Info Energy Services Business Structure No. of Employees in Energy Services Estimated Revenue in Energy Services Offerings in Energy Services Geographical Coverage Company Qualification Strength and Focus Sales Approach Vertical Market 7.2 HIGHLIGHT OF OTHER NATIONAL AND REGIONAL PLAYERS 7.3 MAJOR LOCAL PLAYERS BY REGION California Table 14 List of ESCOs in California Major national ESCOs Regional ESCOs Florida Table 15 List of ESCOs in Florida Major national ESCOs Regional ESCOs BSRIA Page 20 of 24 Report 57237/1

25 7.3.3 Ohio Table 16 List of ESCOs in Ohio Major national ESCOs Regional ESCOs Texas Table 17 List of ESCOs operating in Texas Major national ESCOs Regional Operating ESCOs Midwest Table 18 List of ESCOs operating in Midwest Major national ESCOs Regional Operating ESCOs Northeast Table 19 List of ESCOs in Northeast Major national ESCOs Regional ESCOs Southeast Table 20 List of ESCOs in Southeast Major national ESCOs Regional ESCOs Northwest Table 21 List of ESCOs in Northwest Major national ESCOs Regional ESCOs Canada Table 22 List of ESCOs in Canada Major national ESCOs Regional ESCOs Possible new entrants BSRIA Page 21 of 24 Report 57237/1

26 7.4 OTHER COMPANIES DTZ Econoler UGI Performance Solution BSRIA Page 22 of 24 Report 57237/1

27 APPENDIX: A STATES AND CITIES THAT HAVE MANDATORY REGULATION FOR ENERGY DATA SUBMISSION Cities States BSRIA Page 23 of 24 Report 57237/1

28 APPENDIX: B CONSTRUCTION & MACROECONOMIC FACTORS Table 23 US general economic forecast indicators, Population (million) GDP change (%) Unemployment rate (%) Inflation rate (%) Source: US Federal Reserve Board, The World Bank, United States Census Table 24 Canada general economic forecast indicators, Population (million) GDP change (%) Unemployment rate (%) Inflation rate (%) Source: Prince Edward Island Statistics Bureau, Office of The Parliamentary Budget Officer, Employment and Social Development Canada, Inflation.eu BSRIA Page 24 of 24 Report 57237/1