Successful positioning in times of rising energy prices and increasing decarbonization needs
The market for B2B energy services is expected to grow significantly in Europe over the next 15 years. The war in Ukraine and growing pressure from the EU and national governments to cut carbon emissions have given further impetus to an already thriving market. Developing solutions that support decarbonization and make energy supply more affordable and secure – including energy efficiency services, on-site generation, and carbon capture and storage – is a key focus for all major industries across Europe.
In this study, we assess opportunities in the booming energy services market: Which industries and customer segments are most attractive, how the market for the different services will develop, which companies are competing and what capabilities energy services companies need to succeed. The study is built on our market insights, desk research and more than 20 interviews with B2B energy services executives in Europe.
Developing solutions that support decarbonization and make energy supply more affordable and secure – including energy efficiency services, on-site generation, and carbon capture and storage – is a key focus for all major industries across Europe. B2B energy services cover a broad range of segments, depending on the particular situation and needs of industrial customers.
Commercial and technical services including consulting and installation of more energy-efficient hardware to reduce companies’ energy consumption and make best use of available funding support schemes.
Design, construction and operation of on-site generation infrastructure on behalf of B2B customers with medium to high energy demand.
Designing, building and managing public and private charging infrastructure as well as providing related services.
Providing on-site hydrogen generation capacity as well as hydrogen storage and transport facilities.
“Energy costs account for a high share of our overall costs – we need reliable access to affordable energy, otherwise we will need to re-allocate our production.”
Energy services providers need to be able to offer a wide range of products and services, and to be able to manage complex integration projects – renewables generation plus energy storage and energy management systems, for example. As a result, they need to have a very detailed understanding of the customer at every stage to be able to offer specific and to-the-point solutions. The key capabilities for building a B2B solutions business can be divided into three categories:
B2B energy services companies need to ensure that their sales organization is focused on the most attractive industries and customer segments.
Energy service companies need to balance the trade-off between centralization (efficiency, building competence) and regional presence (fast reactions, customized solutions).
External commercial and technical partners need to be integrated smoothly to provide additional breadth and depth as value for the customer.
To build up or expand a solutions business and add the capabilities described above, four possible approaches exist:
Acquiring companies means obtaining control over an established operating model with a functioning business case and offers the advantage of gaining scale rapidly. However, a potential culture clash is a key risk of an M&A transaction.
Developing a new energy solutions business from scratch in-house offers the advantage of building a culture that is highly compatible with that of the core business and facilitates combining the capabilities of the core business with the energy solutions business.
A strategic alliance offers a loose form of collaboration that can be set up quickly, with clearly defined objectives and timeline. It typically involves limited financial resources and can be scaled up or down with growth requirements more easily.
Joint ventures enable companies to combine different capabilities within an agile and focused operating model – provided it is well-structured.