UK Energy Management Systems (EMS) Market Landscape Sample Deliverable © 2018 RocSearch. All Rights Reserved. 1 Table of Contents ▪ Executive Summary 02-07 ▪ Market Definition and Value Chain 08-10 ▪ Market Size and Growth Outlook 11-13 ▪ Growth Drivers and Inhibitors 14-16 ▪ Market Trends and Their Impact 17-20 ▪ Key Energy Regulations 21-23 ▪ Competitive Landscape 24-31 ▪ Mergers and Acquisitions 32-37 ▪ Investment-worthy Opportunities 38-53 ▪ Appendix 54-60 © 2018 RocSearch. All Rights Reserved. Executive Summary (1/5) UK Energy Management Systems Market Study Energy Management Systems have a wide array of end-users from households to power generation companies, creating a c. £XXbn market that is expected grow at XX% for the next 5 years 1) Energy Management Systems Market Definition 1.1) Application Areas ▪ The Energy Management Systems’ market in the UK includes: • Products and Devices that connect to all electric equipment (HVAC, Lighting, IT Infrastructure etc.) within a residential or commercial establishment to gather and monitor energy consumption data • Software and Related Service that provide Energy Data Services, Advanced Data Analysis, Invoice Management, Emissions Forecasting, Bill Validation, Predictive Maintenance, Energy Usage Reporting, Asset Tracking, etc. • Professional Services include Energy Surveys, Energy Performance Inspections, Reporting, Training, Audit and Certification, etc. ▪ These solutions find wide application across the entire energy lifecycle from power generation to distribution to final consumption by domestic and commercial customers 1.2) Segment Characteristics, Size and Outlook ▪ This study estimates the overall Energy Management Systems Market to be currently worth c. £XXbn and is expected to reach c. £XXbn by the end of 2022, growing at XX% CAGR ▪ Energy management products/ services are shaped by the distinct requirements of the end-user at different stages of the lifecycle and therefore, the market is segmented based on the type of end-user as: • Industrial Energy Management System - This end market includes Utilities (power generation companies, transmission and distribution companies) and Industrial establishments (manufacturing plants, industrial complex) - The market is currently worth c. £XXbn and is expected to reach £1XXbn by the end of 2022, growing at XX% CAGR • Building Energy Management System - This end market includes commercial buildings, offices, hospitals, government and public buildings and similar establishments - The market is currently worth c. £XXbn and is expected to reach £XXbn by the end of 2022, growing at XX% CAGR • Home Energy Management System - This end market includes homes and residential establishments - The market is currently worth c. £0.3bn and is expected to reach £0.5bn by the end of 2022, growing at 12% CAGR ▪ UK continues to be one of the largest markets in Europe, although some experts believe that it is not at the forefront of technology adoption, especially in the Home Energy Management segment. This also explains the relatively smaller size of the Home EMS segment. Sources: RocSearch analysis across secondary data sources; Primary interviews with 15+ senior stakeholders in the EMS sector; Scanning 1,000+ companies in the EMS sector as part of the RocEye deal origination study © 2018 RocSearch. All Rights Reserved. 3 Table of Contents ▪ Executive Summary 02-07 ▪ Market Definition and Value Chain 08-10 ▪ Market Size and Growth Outlook 11-13 ▪ Growth Drivers and Inhibitors 14-16 ▪ Market Trends and Their Impact 17-20 ▪ Key Energy Regulations 21-23 ▪ Competitive Landscape 24-31 ▪ Mergers and Acquisitions 32-37 ▪ Investment-worthy Opportunities 38-53 ▪ Appendix 54-60 © 2018 RocSearch. All Rights Reserved. Market Definition UK Energy Management Systems Market Study Energy management solutions (products, software and services) are used by utilities, industrial facilities, commercial establishments and households to achieve cost savings through higher consumption efficiency Based on the end-user application, EMS is classified into Home Energy Management System (HEMS), Building Energy Management System (BEMS), and Industrial Energy Management System (IEMS) Home Energy Management System ▪ End Market These systems are designed for residential load ▪ Application Area Used to monitor and optimise consumer’s energy consumption. Smart meter, smart sensors, smart appliances are a few of the key components of HEMS Industrial Energy Management System ▪ Major Players ▪ End Market Sharp, PassivSystems, XXX These systems are designed for utilities, manufacturing facilities and any industrial complex ▪ Application Area Typically used in electric substations, boiler plants, cogeneration plants, electrical and thermal fluid distribution lines, pumps and fans, HVAC systems, lighting systems Energy Management ▪ Major Players System Building Energy Management System Cisco Systems, XXX ▪ End Market Covers large segment load – commercial buildings, offices, hospitals, government and public buildings and similar establishments ▪ Application Area Used to control, monitor and optimise energy consumption of a building’s systems such as lighting, HVAC and plant room equipment ▪ Major Players ABB, XXX Sources: Presentation HEMS – Michigan Technological University (2016); Airedale; Bresaer; Mordar Intelligence; MarketsandMarkets; Advanced Energy Economy © 2018 RocSearch. All Rights Reserved. 5 Table of Contents ▪ Executive Summary 02-07 ▪ Market Definition and Value Chain 08-10 ▪ Market Size and Growth Outlook 11-13 ▪ Growth Drivers and Inhibitors 14-16 ▪ Market Trends and Their Impact 17-20 ▪ Key Energy Regulations 21-23 ▪ Competitive Landscape 24-31 ▪ Mergers and Acquisitions 32-37 ▪ Investment-worthy Opportunities 38-53 ▪ Appendix 54-60 © 2018 RocSearch. All Rights Reserved. Market Size & Growth Outlook UK Energy Management Systems Market Study As one of the largest markets in the region, the UK Energy Management Systems market is estimated to be worth c. £XXbn (c. 15% of Europe) and is forecasted to grow by more than XX% during 2017-22 UK EMS MARKET SIZE - £BN (2014 – 22) CAGR 2014-17 CAGR 2017-22 XX XX XX% XX% XX XX XX XX XX% XX% Industrial Energy Management System XX XX XX XX XX 1.50 XX XX Building Energy Management System XX XX XX XX XX% XX% 0.68 XX XX XX XX XX XX 0.60 XX Home Energy Management System XX XX 9% 12% 0.23 XX XX XX XX XX XX 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E Key Observations Industry Speak ▪ By the end of FY 2018, the UK Energy Management Systems market is expected to be worth £XXbn accounting for c. 15% of the overall European market • “The market is not very mature. EMS that control energy consumption in a building, those have been around for a long time but at the same time, many of them were not internet ▪ UK has traditionally followed other countries like Germany, France, and Denmark, who have compatible” – Director, ABC been at the forefront of new EMS technology adoption • “The energy management and metering side, is very crowded and there are a lot of players ▪ Though the legacy systems have been in existence for quite a long time, but recently, connected out there. So, there are old school players who have been there for 25 years like Siemens devices (IoT, AI) are making inroads in the UK market gradually and then again there are lots who operate in the market” - MD, ABC ▪ Large globally diversified players like Schneider, XX, etc. account for c.XX% of the market and • “The UK comprises almost 10-15% of the European Market. Germany is the market leader, the remaining market is highly fragmented Germany and France have about 15-20% each of the market” - Managing Director, ABC Sources: PwC, TEAM Energy, Wattics, RocSearch Analysis, Primary Interviews © 2018 RocSearch. All Rights Reserved. 7 Market Size & Growth Outlook UK Energy Management Systems Market Study While industrial customers (manufacturing, engineering, etc.) have been heavy adopters of energy management solutions, the commercial sector (hospitality, banking, etc.) is catching up UK EMS MARKET BY END MARKETS (2017) Key Observations By End Markets: XX% Home EMS ▪ Industrial customers (manufacturing, engineering, construction) are heavy adopters of EMS; Commercial establishments (Consumer goods, Hospitality & Leisure, Banking & Capital) are slow adopters; and SMEs will emerge as a major underserved market segment XX% 100% = Building EMS £XXbn • 33% industrial firms and 20% commercial organizations plant to invest £1.0mn in smart energy technology in the next 5 years XX% Industrial EMS • Leading companies have announced energy efficiency targets for 2020- P&G will power its plants with 100% renewable energy and Walmart will reduce building energy intensity by 20% from 2010 levels ▪ Adoption in the residential sector is expected to remain sluggish with a vast majority of respondents unwilling to spend on smart home systems in next 2 -5 years UK EMS MARKET BY OFFERINGS (2017) By Offerings: ▪ Software and consulting together constitutes XX% of the EMS market XX% Software & Related Services ▪ Abundance of data, upgradation of existing solutions, demand for specialized solutions for complex applications are few factors driving the XX% demand 100% = Products/Devices £XXbn By Deployment Model: Consulting ▪ XX – XX% of the energy management software market consists of on-premise software; availability of in-house IT team and low XX% infrastructural cost are few factors driving the demand for this deployment model ▪ Cloud based model is gaining traction as it offers easy data