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The energy and industrial market is the glue that interlocks the world’s infrastructure in a way that makes it smarter and more efficient. From the solar panels that power your home and office building to the modern grids that effectively manage the changing electricity demand and the industrial internet of things (IIoT) technologies that transform companies to the charging stations that keep electric vehicles running, this market remains virtually synonymous with technological advancement.

The supply chain impact of the COVID-19 pandemic presented a global roadblock. A recent 青青草App survey reveals that of the 100+ energy and industrial supply chain decision-makers surveyed, 82% agreed either strongly or somewhat that their supply chain footprint has shifted notably because of COVID-19. Still, as demand for renewables, microgrids, electric vehicle (EV) chargers and smart devices continues to balloon, trends and drivers that shed light on the future of the industrial and energy market are emerging.

An explosion of data continues, and with it, the impetus to incorporate lessons from that data into the cognitive abilities inherent within smart building technology. Notably as well, renewable power storage maintains a steady increase in deployment. Among these market trends looms an ever-increasing demand for renewables, as well as for microgrids that offer security and resilience. 

Increased Demand for Microgrids and EV Charging Stations

The general market trend for microgrids and EV charging stations is characterized by upward-spiking demand. This is favorable news within a world where supply is abundant enough to meet demand, but a battery shortage currently exists. Recent advancements in battery technology should help to close this gap between supply and demand. Additionally, more players entering the battery space should drive costs down and spur further development. 

Then there is electrification to consider. The shift from internal combustion engines (ICE) is good news for the environment – and EV charging station original equipment manufacturers (OEMs). According to , 90% of light-duty cars traveling down American roads must be electric by 2050 to meet climate mitigation targets. Even if the United States does not reach that goal, massive adoption of EVs and their necessary charging stations is on the distant horizon. 

Increased demand is a forgone conclusion not just domestically but abroad; according to , the electric vehicle charging station market size is projected to globally rise from approximately 2,115 units in 2020 to 30,758 by 2027. Look to the Asia-Pacific region for potentially the biggest charging station influx; government policies there support EV initiatives and complementary services. Portable charging components that lessen the need for brick-and-mortar charging locations are included in this space.

Meanwhile, as battery and solar power storage becomes affordable and widespread, self -sustaining microgrids should become even more attractive when combined with data-processing capabilities. Recent wildfires in California and snowstorms in Texas showed the world why the development of microgrids are pressing and pertinent. 

Though the microgrid as a self-contained solution for energy distribution continues to gain traction, microgrid designers are still left with the resounding question of where to source battery components. It’s a common complaint voiced by the innovators of today who have ideas ready for launch – but not enough components to fulfill them on a mass scale. After all, 62% of energy and industrial decision-makers say they’ve experienced delays in their production delivery or time-to-market due to component shortages and sourcing issues.

Renewables and Renewable Power Storage

According to the , COVID hurt but did not halt global growth in renewable power. Supply chains for photovoltaics and wind have been majorly disrupted throughout the pandemic. Then, there were social distancing protocols that put the brakes on further; construction workers had to change the way they approached everyday efficiency at the job site. But hope is on the horizon for renewables, and IEA estimates predict a 5% increase this year. Renewable energy is the sole energy production source to receive such positive predictions. 

Renewable power storage facilities also continue to increase in number. As lithium battery composition continues to improve and costs edge lower, competition in the market should increase and facilities see a marked boom. Case in point: the projected the costs of lithium batteries to plummet 45% between 2018 and 2030. Add to this the production of “flow batteries” that offer greater longevity than lithium-ion, and that means more (renewable) power to the people.

As more players enter this space, green energy nudges toward commercial viability. Who can develop green energy and get it to market at reasonable cost? is the overriding question. A definite race is underway. However, as notes, lowered costs do not a renewable-energy panacea make. There are two opportunities to build an even better and more renewable existence: policies that encourage renewables over fossil fuels and stimulus packages embraced by businesses as a result of government COVID-19 support.

Harnessing A Data Explosion: Smart Buildings 

Thank an increase in artificial intelligence (AI) technology and machine learning capabilities for a new era of smart buildings. These structures seem to grow more intelligent and connected by the day, and as device development increases, so will the capabilities of these buildings. A brick-and-mortar foundation is just the beginning inside these connected edifices.

The idea of smart buildings is not new, but as more devices become available, they are more connected than ever before. Component shortages due to tariffs and COVID-19 fallout did put the brakes on smart building proliferation in the short term. Semiconductors are scarce and battery components are precious. Though manufacturing efforts once stymied by the pandemic are resuming, material availability and applicable costs challenge smart construction efficiency. As supply chains recover, however, lessons may be taken from the pandemic and applied to these smart buildings. 

Smart technology embedded within building ecosystems offer post-pandemic solutions. As employees working from home in the last year return to the office space, sensors, new devices and related IoT capabilities look to personalize the office space by offering real-time data and valuable insights. These platforms are designed to make the buildings healthier, safer and more efficient for everyone involved. highlighted this silver lining, maintaining that protocols for health and worker safety are molding the framework for smart buildings of the future. 

Capital Equipment

The capital equipment sector is no stranger to the ongoing component shortages. This translates to an inability for manufacturers to release equipment in an expedient manner. Nonetheless, capital equipment showcases major growth drivers in AI and augmented reality, Big Data, 5G, IoT and advanced driver assistance systems (ADAS) end markets. Demand for smart devices will result in a positive market impact overall.

As Industry Week projects, semiconductor capital equipment manufacturers look to serve as problem-solvers in this realm. Necessary fab innovation is occurring as chip size decreases and power increases. This translates to a long product development cycle, however.

Overall Pandemic Impact and Ultimate Recovery

A resounding challenge presented by the pandemic is supply chain resilience. Extracting elements from China at reasonable prices, for example, and competing with other products and services for a limited component supply, has been difficult. Add tariff requirements to COVID-19 protocols, and it has been a challenge to maintain adequate costs and/or delivery of parts of the supply chain.

As a hopeful end to the pandemic looms, manufacturing is back — but the cost of materials continues to challenge everyone. In fact, as a result of the pandemic, 94% of survey participants affirmed that their company experienced a financial impact; nearly one third lost over $100 million.

OEMs in the energy and industrial market are set to invest in digital technologies and analytics to help their companies recover faster from the impacts of COVID-19. In fact, 87% of respondents from the 青青草App survey agree with that statement.

Market Trends to Watch

The industrial and energy market is interconnected in many ways. Smart technologies are related to the semiconductor business. The software suite deployed from analytics derived from smart devices drives smart buildings. Expect even more connectivity across the board, revamped supply chains and an increasingly “smart” human existence as these technologies that often work in tandem become more easily sourced. What can one expect in the near- and long-term with this sector? Certainly, lessons put into action from COVID experiences. The pandemic has exposed the need for solid continuity plans. 

Still, even a pandemic can’t squelch innovation. As innovators moved work from the office to the home, collaboration continued. Advancements were made. New technology and software suites were initiated. It has been a challenge to maintain costs and/or delivery of parts of the supply chain. But as people worked from home, engineering and development activities persisted.

Now supply just has to keep up.