The energy market has been subjected to severe disruption in the last 18 months, forcing business, consumers and governments to reconsider the way they obtain, use and manage their energy.
Such recalibration means there will be considerable new opportunities for energy management companies in the short and longer term as the world focuses on decarbonisation. Companies will need to make sure they have a strategy – and the expertise, be it in-house or with a partner – that combines agility with a financial and technical solution that will enable them to win their unfair share.
Engineering, manufacturing and supply chain expert Plexus asked its team what trends they are hearing from the sector.
The growing need to supercharge
Mark Mackay, Business Development Director
Today, electric cars (EVs) represent approximately 1% of global car stocks meaning there are more than 10 million EVs on the road, but revenue predictions for EVs show an annual growth rate (CAGR 2022-2027) of 18%. Electric trucking was valued at USD 505.5 million in 2021 and this market is projected to grow from USD 631.3 million in 2022 to USD 7,146 million by 2029. The electric construction equipment industry is estimated to grow from USD 9.2 billion in 2022 to USD 24.8 billion by 2027. These are huge levels of growth.
As more and more drivers make the switch to electric, there are clearly opportunities for those developing super- or even hyper-chargers to keep all these car, trucks and heavy equipment on the road. Developers need to move quickly, with the right technology to become leaders in this growing space. Opportunities will extend beyond chargers to technology that captures and stores energy efficiently. Whether that’s using offshore wind to power hydrogen fuel cells, which can store and move energy, or co-locating solar farms with charging stations to facilitate destination charging, thus ensuring energy availability.
One challenge for companies hoping to take advantage of these opportunities is the limited availability of silicon carbide. This is required to power core module technology for all chargers and vehicles. Having a scalable supply chain solution with a focus on reducing risk and facilitating growth will be crucial to take market share.
Hydrogen fuel cells in heavy equipment
Rich Latta, Director of Manufacturing Solutions
The first hydrogen powered trucks in Europe rolled into action in 2021. For many trucking and heavy equipment manufacturers, moving straight to hydrogen cells rather than opting for electrification will make more sense. It will avoid the need to stop and charge frequently. A combination of electrification and hydrogen fuel cells will provide greater range and less frequent charging, making their equipment more attractive to buyers. The opportunities and challenges for this new technology are numerous. Two key areas stand out:
- As hydrogen has a lower ignition energy than fossil fuels, the risk of combustibility and electric shock rises. Building in the right safety measure for these products will increase their commercialization potential.
- Building in cost reduction to bring this new technology to the right price point will make it a viable option for mass marketing. Utilised effectively, Design for Excellence methodologies will help to achieve this.
A global energy transition in the face of global instability
Ramie Smith, Senior Director Industrial - EMEA
Initially we might see a backwards trend in this area, particularly in countries where governments are prioritising reducing energy bills for consumers and businesses alike or facing greater demand than their supply can meet. We have already seen this in Germany where parliament approved measures to use mothballed coalmines to produce electricity, leading to major protests from climate change activists.
Longer-term, the need to ensure energy independence, avoid future price rises and decarbonise will drive a move away from fossil fuels to greener, renewable alternatives. Supporting the transition from oil and gas to renewable energy will require all stakeholders from the power companies, governments, manufacturers and innovators across the energy sector to work collaboratively. The vast scale-up of battery-based electricity storage infrastructure is widely seen as central to global net-zero ambitions. Harvesting energy from renewable sources and converting it into useable power will require the wide deployment of new technologies and investment in national grids. This will include power electronics, high voltage equipment, including HVDC (High Voltage Direct Current Electricity) Systems, automation and protection products and asset management equipment to monitor performance. When developing technology in each of these areas, companies need to remember the energy trilemma of balancing affordability, reliability and sustainability.
Reducing your supply chain emissions
Megan Schleicher, Senior Director - Environmental, Social and Governance
With the global focus on climate change, companies are increasingly focusing on the sustainability of their supply chain. This includes seeking to reduce Scope 3 emissions - indirect emissions that occur because of the companies’ operations, but from sources not owned or controlled by the company - and de-risk. When bringing new energy management products to market, each member of the supply chain needs to behave in a socially and environmentally responsible way. Specifically, from an environmental perspective, you should consider:
- Regional/Global Growth – how will you be able to deliver your product sustainably within minimum carbon footprint in different regions? How will you be able to cope with demand fluctuation across regions, do you need to consider relocating?
- Product Design – consider the decisions you make in early product development and the long-term environmental impacts those could have.
- Supply chain configuration - which suppliers are at most risk from the impact of climate change or fluctuating energy prices?
Applying this thinking will not only deliver from a sustainability perspective, but also increase resilience and de-risk your supply chain.