impact of energy efficiency drivers on the building

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Global Energy Efficiency Markets

Impact of Energy Efficiency Drivers on the Building

Technology Industry

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May 2009


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and investment community, and other related sources.

In addition to the above, our robust in- house forecast & benchmarking models along with the Frost & Sullivan

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We also certify that no part of our analyst compensation was, is or will be, directly or indirectly, related to the

specific recommendations or views expressed in this service.


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Table of Contents

The Need for Energy Efficiency in Buildings

The Need for Energy Efficiency in Buildings 5 - 9

5 - 9

Impact of Energy Efficiency on Building Technologies Markets

Impact of Energy Efficiency on Building Technologies Markets 10-19

10-19

Key Interacting Building Technology Markets Impacted by Energy Efficiency

Technology Advancements and Market Developments

Technology & Growth Roadmap

Drivers, Restraints and Market Impact of Top 10 Growth Trends

Impact on Technology Markets and Key Players

Regional Trends and Hot Spots

Global Perspective for Energy Efficiency

Combined Impact of Emissions Reduction and Cost Saving

Electricity Demand Outlook by Region & Building Type

Major Regional Differences in Energy Uses

5

6

7-8

9

10

11-12

13

14-15

16-17

About Frost & Sullivan

About Frost & Sullivan 20-24

20-24

18-19


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Global Primary Energy demand

to increase by 50% between now

and 2030. Electricity Demand toincrease 60%.

Over 70% of this increase comes

from developing countries, led by

China and India.

Fossil Fuel Power will continue todominate and will grow dramatically in

the next 20 years.

Potable Water demand to grow

50% on 1995 levels by 2025.

CO2 Emissions reach 40 Gt in

2030, a 55% increase over today.

Significant Global Growth

Opportunities for Green

Technologies and services.

The global energy efficiency market is

challenged by three interlocking issues that

make markets both attractive and complex:

Energy and Fuel Costs

Environmental Issues

Growth in Global Energy Demand

Outlook for Energy Consumption

Global Building Technologies MarketsGlobal Perspective for Energy Efficiency

Global

Energy

Demand

Environment

EnergySupply

and Costs Construction

Activity

Connectivity

& Integration

Building

Intelligence


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AC & Cooling

5%

Heating

42%

Ventilation

2%

Water Heating18%

Lighting

5%

IT Equipment

1%

Other

Appliances

27%

The Need for Energy Efficiency in BuildingsCombined Impact of Emissions Reduction and Cost Saving

AC & Cooling

12%

Heating

28%

Ventilation

8%

Water Heating

3%

Lighting

32%

IT Equipment

4%

Other

Appliances

13%

Between 40-45% of global CO2

emissions come from buildings

Regional variations due to culture,climate and wealth

Energy consumption in buildings still on

a steep growth curve globally

60-65% of buildings in 2050 will have

been built by 2010 Retrofit/Refurbishment markets will be

the key area for energy savings

Efficient results require integrated

approaches and open opportunities for

energy management services.

80% of energy use over a buildings life

cycle is from the buildings operation

Single biggest opportunity is for energy

efficiency in buildings management

Huge cost saving opportunity

Buildings as Consumers of Energy

Source: Frost & Sullivan

Energy Efficiency Market: Industrial & Commercial

Energy Consumption in Buildings (World), 2008

Source: Frost & Sullivan

Energy Efficiency Market: Residential Energy

Consumption in Buildings (World), 2008


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North

America

33%

China

5%

Russia

9%

Europe

29%Latin America

4%

Rest of Asia

13%

Middle East2%

India

2%

Africa

3%

North

America

28%

Africa

3%

India

4%

Middle East

3%Rest of Asia

15%

Latin America

6%

Europe

22%

Russia6%

China

13%

North

America

23%

China

20%

Russia

5%

Europe18%Latin America

7%

Rest of Asia15%

Middle East

3%

India

6%

Africa

3%

Electricity consumption in China has

increased from 551 billion kWh in 1990 to

2,227 billion kWh in 2008 and is forecast

to increase further to 5,971 billion kWh by

2030. This means that Chinas share of the

global market will increase by a staggering

15% from 5% in 1990 to 20% in 2030.

Similarly, the share of other developing

regions is also forecast to increase. TheRest of Asias share increases from 13% to

15%, Latin Americas from 4% to 7%,

Indias from 2% to 6% and the Middle

Easts from 2% to 3% between 1990 and

2030.

The key reasons for the increase inelectricity consumption in developing

regions is rising populations, higher

economic growth, increased urbanisation,

and rural electrification projects.

Regional Electricity Consumption

The Need for Energy Efficiency in BuildingsElectricity Demand Outlook by Region

Regional Share of Electricity Consumption, 1990

Source: Frost & Sullivan and EIA.




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In 2008, final energy consumption

amounted to almost 300 Exajoules (EJ)

globally.

Industrial & commercial, households and

transport were the largest sectors

accounting for 88% of energy consumption

collectively.

Trends in energy use vary significantly by

country and region. Transport and servicesectors play a more important role in

developed regions and are the fastest

growing sectors in Europe and North

America.

In contrast, in the developing countries,

manufacturing and household energy use

dominate.

Energy use in China has increased the

most with final energy use increasing by

69% between 1990 and 2007.

Electricity Demand Structure

The Need for Energy Efficiency in BuildingsElectricity Demand Dominated by Buildings

Energy Consumption by Sector and Region, 2008

Energy Consumption by Sector, 2008

Source: Frost & Sullivan and IEA.

Note: Other includes construction, agriculture and fishing; Services includes

leisure, commercial services and datacentres.

Services

9%

Other

3%

Transport

26%

Ind & Comm.

33%

Households

29%

0%

20%

40%

60%

80%

100%

Europe Russia North

America

India China Asia Rest of

World

Other

Services

Transport

Households

Ind & Comm.


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The Need for Energy Efficiency in BuildingsMajor Regional Differences in Energy Uses

SpaceHeating

Lighting/Appliances

HotWater

AirConditioning

SpaceHeating

Lighting/Appliances

HotWater

AirConditionin

g

SpaceHeating

Lightin

g/Appliances

HotWater

Air

Conditioning

SpaceHeating

Lighting/Appliances

HotWater

AirConditioning

SpaceHeating

Lighting/Appliances

HotWater

AirConditioning

Source: Frost & Sullivan.


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Key Interacting Building Technology Markets Impacted byEnergy Efficiency

BTech Products HVAC Lighting

Refrigeration Smart Materials

Communication technology

Services Energy management

ESCOs

Performance contracting Consulting Retro-Fitting

Building Controls Building Automation

Home Automation

Integration

Lighting Controls

HVAC Controls

Micro-Renewables

Wind

Solar PV/BIPV

Heat Pumps

Solar Thermal

GreenBuildings

Smart

Buildings

Biomass

IntelligentBuildings


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Technology Advancements in the Key Energy Efficiency

Battlegrounds

HVAC

Alternative technologies (micro-renewables: heat pumps, BIPV, solar thermal,

biomass, micro wind etc.)

Resurgence of cogeneration (and micro-cogeneration) for use in buildings

Smart grid integration through building controls

Increasingly intelligent building/HVAC controls to manage primary energy use

Heat exchangers for internal heat transfer between zones

Materials

Smart materials (smart bricks, smart glass, )

More widespread and better use of insulation materials

Integration of new technology directly into building materials (e.g. BIPV)

Use of recycled and re-used waste materials in concrete etc.

Green building design incorporating energy efficient materials and equipment

Lighting

Compact fluorescent lamps (CFLs) as low energy lighting

LED lamps emerging at high efficiency and reduced cost

Integrated lighting controls within building automation systems Presence/motion detection sensors

Exploitation of natural light in building design


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Market Developments in the Key Energy Efficiency

Applications

Residential

Strong growth trend for microrenewables in homes, especially in Europe

Smart town/city concept facilitated by smart grids at individual homes level

Home automation maintains primary focus on HVAC integration and optimisation

Fuel/energy price volatility urging customers to seek energy efficiency measures Major push towards energy efficient lighting (supported by legislation in many regions)

Commercial

Accelerating evolution of building systems to IP-type networks

Financial advantages of integrated systems in reducing total CAPEX and OPEX

Continued growth in outsourced energy management services

Technologically sophisticated buildings emerging in growth markets of APAC and

Middle east

Increasing focus of major players on integrated energy efficiency solutions

Datacentres

Biggest datacentre concerns - Power consumption, availability & TCO Reducing ongoing costs is top of the agenda for datacentres

Leading to an increase in datacentre outsourcing and in external cloud computing.

Budget cuts not expected to impact installation of racks and the average power

consumption by datacentres.

Increase in use of Software as a Service (SaaS)


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Energy Efficiency and Building Controls:Technology and Growth Roadmap

1980 20001990

Evolution ofBuilding

Technology

Markets

2010 2020

Systems

Integration

Building

Management

& Control

Building

Automation

Green

Buildings

IT

ConvergenceFunctional

Controllers

Home

Automation

Building

Control

Building

AutomationSmart

Buildings

Energy

Control

Construction

& Operational

Efficiency

Building

Performance

Integrated

Networking

Energy

Management

Enhanced

Management

Intelligent

BuildingsHVAC Control

Intelligent

Green

Buildings

2009

Security

Convergence

Smart

Towns

Low Energy

Lighting

Micro-

Renewables

Micro-

Generation

Smart

Grids

How the movers & shakers are positioning themselves



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Unimportant Critical

Very Uncertain

Very Certain

Global Building Technologies MarketEnergy Efficiency . Drivers and Restraints of Growth

Economic

Growth in Emerging

Regions

Energy Efficiency

Inherently Linked

To Cost Saving

Rising Global

Population

Span of influence

across residential,

commercial andindustrial customers.

Market Drivers

Volatile

Energy Costs

Lack of Finance

In Emerging

Economies

Lack of

Green Focus

In Emerging

Markets

High cost of

retrofitting older

buildings

Market Restraints

Lack of

Consistent

Green Policies

Global

Economic

Slow-Down



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Global Building Technologies MarketMarket Impact of Top 10 Growth Trends

Projected

Impact on the

Building

TechnologiesIndustry

High Impact

Low Impact

Certainty

Low High

Micro

Renewables

Cogeneration

Resurgence

Smart Grid

Integration

Heat

Recycling

Smart

Buildings

Integrated

Networking

Advanced

Materials

Energy Management

& Control

Low Energy

Lighting

Green

Buildings

High Growth Impact

Low

Growth

Impact

Medium

Growth

Impact



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2007

0

Smart Grids

Micro-Renewables

Building Controls

EnergyEfficient

Lighting

Insulation

Materials

2008

2009

2010

2011

0

0

0

0

Energy efficient lighting largely unaffected by 2009

recession with strong legislation, although expectdecline in high end architectural lighting from Q1 2009.Short term dominance of CFL followed by mid termboom for LED lighting.

Dip in demand from Q3 2009 following weak

construction in residential buildings. Strong rebound

expected from Q3 2010. Primarily still a market in

Europe, North America and Japan. Opening up in other

parts of APAC for mid-term future.

Hit by weak construction in 2009, but underlyingdrivers are strong due to pivotal role in controlling

energy consumption. Also a key element ofintegration into smart grids. Integration and IPnetworking remain major trends in commercial sector.

Major role to play in both retrofit and new buildprojects. EU markets stimulated by governmentgrants. Close links to construction markets restrain

growth in 2008-10. Smart materials still a nichemarket with longer term opportunities beyond 2015.

Buzzing topic in 2008 driven by electricity demandgrowing faster than supply. Momentum maintained in2009 with strong acceleration expected in 2010.Attracting a broad spectrum of new players to theenergy efficiency marketplace.

Global Building Technologies Market

Impact of Energy Efficiency Drivers on Technology Markets



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Smart Grids Micro-RenewablesBuilding Controls

Energy

Efficient

Lighting

Insulation

Materials

Global Building Technologies MarketLeading Players by Segment



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About Frost & Sullivan


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Who is Frost & Sullivan

The Growth Consulting Company

Founded in 1961, Frost & Sullivan has over45 years of assisting clients with their decision-making and

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Over 1,700 Growth Consultants and Industry Analysts across 32 global locations.

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perspective of technology, markets and growth opportunities.

Three core services: Growth Partnership Services, Growth Consulting and Career Best Practices.


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impact of energy efficiency drivers on the building

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