Energy Engineering Service Outsourcing Market Forecasts to 2030 - Global Analysis By Service, Location, Energy Source, Application, End User and By Geography

According to Stratistics MRC, the Global Energy Engineering Service Outsourcing Market is accounted for $391.6 million in 2023 and is expected to reach $1513.4 million by 2030 growing at a CAGR of 21.3% during the forecast period. Energy engineering service outsourcing involves contracting specialized firms to handle various aspects of energy-related projects, such as design, analysis, implementation, and maintenance. These services encompass a wide range of tasks, including energy auditing, efficiency optimization, renewable energy integration, and sustainability consulting. Outsourcing allows organizations to leverage external expertise, reduce operational costs, and access cutting-edge technologies without investing in in-house resources.

According to the U.K.-based World Nuclear Association, nuclear power is the second-largest source of low-carbon electricity worldwide after hydropower, and it reduces carbon dioxide emissions by 2.5 billion tons per year.

Market Dynamics:

Driver:

Increasing investment in renewable energy infrastructure

Renewable energy projects like solar farms, wind turbines, and geothermal plants require specialized engineering knowledge and experience. Energy engineering service outsourcing possesses this expertise in designing, constructing, and maintaining these complex systems. As more renewable projects are built, the demand for energy engineering service outsourcing services will rise. Moreover energy companies are looking for ways to manage costs while building renewable infrastructure. Outsourcing to ESPs can provide access to skilled labour at competitive rates, particularly in regions with a large pool of qualified engineers rising the demand for energy engineering service outsourcing.

Restraint:

Security and intellectual property (IP) concerns

Companies are apprehensive about outsourcing critical engineering projects if there's a risk of confidential data or technical information being compromised. This can lead to missed opportunities for growth and innovation in the engineering service outsourcing market. Due to IP theft fears, companies might outsource only routine engineering tasks, keeping sensitive projects in-house. This restricts the range of services that engineering service outsourcing can offer and limits the overall market potential.

Opportunity:

Growing demand for digitization

Digitization enables seamless communication and collaboration between outsourcing firms and their clients, allowing for real-time project updates, virtual meetings, and document sharing. This facilitates smoother project management and enhances efficiency in delivering engineering services. Outsourcing firms can leverage these tools to analyze large datasets, optimize energy systems, and automate repetitive tasks, leading to improved accuracy and faster project delivery.

Threat:

Quality control issues

Quality control issues can result in client dissatisfaction due to receiving deliverables that do not meet their expectations or standards. This can lead to strained client relationships, loss of trust, and potential contract terminations, impacting long-term partnerships and recurring revenue streams. Thus failure to meet quality standards and regulatory requirements can expose outsourcing firms to legal liabilities, fines, and penalties. Non-compliance with industry regulations or safety standards can result in litigation, damage claims, and reputational harm.

Covid-19 Impact

Remote work mandates have accelerated digitalization, prompting firms to adopt virtual collaboration tools. Cost-consciousness has driven businesses to seek outsourcing partners for cost-effective solutions. However, uncertainties in global markets and fluctuating energy demand have tempered growth. Despite challenges, the crisis has highlighted the importance of resilient energy systems, fostering innovation in renewable energy and efficiency solutions. Overall, the pandemic has reshaped priorities, accelerating trends towards remote work, digitalization, and sustainable energy practices in outsourcing services.

The R&D & designing segment is expected to be the largest during the forecast period

The R&D & designing segment is estimated to have a lucrative growth, because Designing services offered through outsourcing facilitate the customization of energy solutions tailored to specific client needs and project requirements. Outsourced design teams can provide comprehensive planning, simulation, and modelling services, ensuring the integration of renewable energy sources, energy storage systems, and efficient infrastructure. Moreover outsourcing R&D enables access to specialized expertise and accelerates the adoption of emerging technologies, such as advanced analytics, IoT, and AI, to optimize energy systems boosting the market growth.

The renewable segment is expected to have the highest CAGR during the forecast period

The renewable segment is anticipated to witness the highest CAGR growth during the forecast period, because renewable energy projects often require a multidisciplinary approach, incorporating aspects of electrical, mechanical, and civil engineering. Outsourcing firms offering a diverse range of services can capitalize on this trend by providing comprehensive solutions for renewable energy projects, from feasibility studies to system integration. Additionally outsourcing allows companies to access talent and resources from around the world, enabling them to participate in renewable energy projects in different regions expanding the markets presence.

Region with largest share:

Asia Pacific is projected to hold the largest market share during the forecast period due to the rapid growth of cities and industries. Outsourcing power engineering services presents numerous advantages, such as access to specialised knowledge, value savings, and faster assignment execution. Moreover, energy engineering outsourcing can guide governments and agencies in accomplishing their sustainability targets via tapping into the expertise of carrier providers who possess in-depth information of energy technologies.

Region with highest CAGR:

North America is projected to have the highest CAGR over the forecast period, owing to increasing investment in renewable energy sources is the primary factor driving the region's growth. For instance, according to the U.S. Energy Information Administration (EIA), electricity production from renewable sources in 2020 increased to 20.0% from 17.0% in 2019. Moreover, the early adoption of advanced technologies in the energy sector is also expected to drive regional market growth over the forecast period.

Key players in the market

Some of the key players in the Energy Engineering Service Outsourcing Market include International Paper Co, Fresh Pak Corp, Georgia-Pacific LLC, Red Rock Pallet Co Inc, Badger Paperboard Inc, Dura-Fibre LLC, Menasha Corp, Signode Industrial Group LLC, Fibre Converters Inc, WestRock Co, Smurfit Kappa Group, Mondi Group, Nefab Group, Elsons International, Inc., DS Smith Plc, Thimm Group and Cascades Inc.

Key Developments:

In April 2024, International Paper and DS Smith Plc announced that they have reached agreement on the terms of a recommended all-share combination, creating a truly global leader in sustainable packaging solutions.

In April 2024, Georgia-Pacific's Crossett Mill Earns EPA Recognition for Energy Conservation. The ENERGY STAR Challenge for Industry is a national call-to-action to improve American manufacturer's energy efficiency.

In May 2023, Dura-Fibre LLC acquired Greif Chicago Converting, a packaging business in Chicago, to strengthen its position in custom laminated products and packaging. The acquisition includes products such as strap protectors, FiberWrap, and coverboard products.

Services Covered:

• Structuring & Layout
• R&D & Designing
• Digitization
• Implementation & Maintenance
• Other Services

Locations Covered:

• On Shore
• Off Shore

Energy Sources Covered:

• Non-renewable
• Renewable
• Chemical Processing

Applications Covered:

• Power Generation
• Energy Efficiency and Conservation
• Energy Management Systems (EMS)
• Smart Grid Solutions
• Energy Infrastructure Development
• Energy Storage Solutions
• Other Applications

End Users Covered:

• Oil & Gas
• Commercial Buildings
• Government and Public Sector
• Transportation
• Residential
• Other End Users

Regions Covered:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • Italy
  • France
  • Spain
  • Rest of Europe
• Asia Pacific
  • Japan
  • China
  • India
  • Australia
  • New Zealand
  • South Korea
  • Rest of Asia Pacific
• South America
  • Argentina
  • Brazil
  • Chile
  • Rest of South America
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Qatar
  • South Africa
  • Rest of Middle East & Africa

What our report offers:

• Market share assessments for the regional and country-level segments
• Strategic recommendations for the new entrants
• Covers Market data for the years 2021, 2022, 2023, 2026, and 2030
• Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
• Strategic recommendations in key business segments based on the market estimations
• Competitive landscaping mapping the key common trends
• Company profiling with detailed strategies, financials, and recent developments
• Supply chain trends mapping the latest technological advancements

Free Customization Offerings:

All the customers of this report will be entitled to receive one of the following free customization options:

• Company Profiling
  • Comprehensive profiling of additional market players (up to 3)
  • SWOT Analysis of key players (up to 3)
• Regional Segmentation
  • Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
  • Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances