Dubai, United Arab Emirates
This whitepaper aims to analyze & forecast trends in energy efficiency market & provides an overview of the growth opportunities in the region. It seeks to outline trends, the new energy efficiency technologies, benefits of the policies if adopted, & more.
The GCC is at an interesting juncture as the economic and social initiatives driving the transition towards Energy Efficiency (EE) have never been stronger. High economic growth and diversification from oil and gas (O&G) have significantly increased demand for electricity and energy. Plus, the region’s policies on fuel and electricity subsidies have led to wastefulness, and inefficient buildings and industrial infrastructure, making these countries some of the most energy- intensive globally. The current economic growth path is unsustainable; hence, there is a push to develop Renewable Energy (RE) and EE policies to meet the increasing energy demand, diversify the electricity mix, and reduce dependence on fossil fuels.
“With the penetration of information and communication technology (ICT), buildings are expected to become smarter, intelligent, environmentally friendly, and energy efficient,” said Sasidhar Chidanamarri, Associate Director, Energy & Environment Practice – MENASA, Frost & Sullivan.
As per recent analysis and research by Frost & Sullivan, a number of technologies will reflect higher relevance, and thereon, greater adoption, in the GCC as compared to others. Potential products that are likely to gain traction in the GCC energy efficiency industry are LED lighting, Building Management Systems, District Cooling, Building Insulation, Variable Frequency Drives & Energy Recovery Devices, Trigeneration plant systems, Solar Thermal Air Conditioning, Non-Electric Chillers, Low Emissivity Glass, and Building Integrated Photovoltaics (BIPV). Besides the aforementioned products, services market such as Energy Performance Contracting (EPC) is also expected to have significant opportunities in the GCC.
Innovations and Disruptions in Building Energy Efficiency in the GCC, recent analysis conducted by Frost & Sullivan’s Energy & Environment Growth Partnership Service program, shows that the market for EPC in the UAE was estimated to be USD 80-100 million in 2015 and is expected to have a CAGR of 15-17 percent in the next four to five years.
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The EE policies, if adopted, will provide a financial boost to governments as there is an opportunity cost associated with reducing wasteful consumption of oil/electricity. The EE policies will also eliminate the need for massive investments in power generation. Reforms related to fuel and electricity tariffs by GCC governments are also improving prospects for EE technologies, besides improving the financial situation in an era marked by falling revenues due to low oil prices. The market for EE products and solutions as well as ESCO services is bound to grow driven by government initiatives, as well as a shift in opinion and attitude towards viewing energy expenditure as a strategic cost center.
“With buildings becoming fully integrated and networked using wireless, web-based automation systems, owners seek to maximize the real benefits,” noted Sasidhar. “Hence, energy management will lead to improvements in operational efficiency, optimization of energy, and demand management.”
The large potential of this market can be gauged by the spurring real estate development activity and the need to cut energy consumption across commercial, residential, and government infrastructural segments.