With more than twenty serious contenders in the UK energy services market and fewer opportunities to grow through acquisition, the battle is heating up to win customers and grow revenues organically.
This is the primary finding from recent Verdantix research focused on acquisitions, new propositions and customer needs in the UK energy services market.
“Since 2008 we have conducted comprehensive analysis of the UK energy services market” commented Verdantix Managing Director, Rodolphe d’Arjuzon. “During the last three years the transformation of the market has been remarkable. A wide range of foreign-owned firms such as Ameresco, Bouygues and GDF SUEZ have entered the UK market through acquisition. Advisory boutiques like Utilyx and Power Efficiency and building management system installers like Matrix and BAS have been bought by utilities and private equity firms. Customers must grapple with the risks and opportunities of an over-crowded market.”
According to recent Verdantix research, the UK energy services market will be worth £1.7 billion in 2015 and will grow at approximately 6% annually over the next 5 years to reach £2.3 billion in 2020. Despite this growth, new suppliers in the UK energy services market face significant hurdles to achieve success:
•Power utilities such as British Gas Business, E.ON and SSE must overcome internal resistance, business model transitions and trust issues with customers
•Facilities management players such as CBRE, ISS and MITIE need to invest in innovative energy solutions outside of their commodity service lines
•Equipment vendors like Honeywell and JCI need to either build services capabilities like Schneider Electric or stick with selling hardware
•Global energy and power suppliers like Bouygues, Cofely GDF SUEZ and Veolia must offer private sector customers attractive contracting vehicles and financing terms
“Over the last 3 years between £500 million and £600 million has been spent on UK energy services deals” continued d’Arjuzon. “The assumptions behind those investment plans will now be tested. It’s obvious to everyone that by 2020 there will be winners and losers in the UK energy services market. The UK market will not support twenty different energy services providers for long.”
To get a complete update on the UK energy services market register now for the Verdantix Summit Getting Value From Investments In Energy Innovation taking place at The Royal Society, London on October 8, 2015.