LONDON--(EON: Enhanced Online News)--According to the latest procurement intelligence report from Technavio, the global electric utilities market is expected to grow at a CAGR of 3.55% over the next five years due to the rise in population and a proportionate increase in energy requirements.
“In addition, hike in subsidies for clean energy, and growing retail electricity will also drive the market”
The research report titled ‘Global Electric Utilities Market: Procurement Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices, and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“During the forecast period, the expansion of the market will be fueled by growing dependency on technology and high demand for electricity,” says lead Technavio procurement specialist Angad Singh for category spend intelligence. “In addition, hike in subsidies for clean energy, and growing retail electricity will also drive the market,” adds Angad.
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Cost saving opportunities in the global electric utilities market
The adoption of various cost-optimization levers helps buyers of global electric utilities realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global electric utilities market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Technologies such as smart grid, distributed energy resources, and energy storage help improve energy efficiency. Such technologies can be used to optimize assets, control grid better, and improve safety leading to cost-savings to the extent of 9% of the total category spend.
Buyers expect distribution infrastructure to easily incorporate multiple technologies, ensure safe transmission of electricity, and minimize transmission loss caused by aging infrastructure, theft or cyber breach. Hence, buyers opt for suppliers that have increasingly invested in infrastructure upgrading and safety during energy transmission.
Supplier competition saving aspects
Buyers can negotiate on price based on the volume of energy consumption to get services at the best cost. As electricity cost has a significant impact on buyers' operating budgets, change in tariff structures, and market fluctuations result in increased cost and subsequently decreased revenue.
Buyers prefer to engage with suppliers that have in-house field experts, high workforce retention, and a good customer to employee ratio to avoid supply interruptions and outages due to manpower shortage, which can lead to huge losses for the consumer.
Bundling of services saving aspects
One of the most opportunistic strategic cost saving levers in the global electric utilities market is the need for consolidation of services. Bundling of services such as transmission, maintenance, support services, energy storage, and better user interface are preferred to reduce cost and ensure consistent quality.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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