The Evolution of the Energy Services Sector & How It Has Been Impacted

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After the early 90s we have seen the emergence of energy service companies. The start of the energy service business can be traced back to the energy crisis of the late 70s, as entrepreneurs developed techniques to fight the rise in energy costs. The ultimate target of the ESCO is to produce substantial savings in energy prices by delivering energy audits and reviews and effectively making processes more economical in regards to energy prices.

Evaluating just a year ago big oil reached negative prices, we’ve since come-along way as energy media websites have been reporting that oil prices will continue to elevate throughout 2022. However one other synchronous trend is government authorities, like the one in Canada, are all pressing for carbon neutrality over the following 5 years. In Canada despite the fact that there are a variety of provinces and regions with oil reserves, none have more than that of Alberta. This particular province contains 39% of Canada’s remaining oil reserves.

Ever since their beginnings in the 80s, energy service companies have evolved and grown. Since COVID engulfed the world we have seen potentially the most radical changes to this industry while seeking to remain relevant. Innovation has performed a vital part in the progression of the energy solutions segment.

As we’ve previously explained, the top goal for energy service providers comes down to decreasing spending and produce supportable solutions for the future. Deregulation of the energy industry in the 90’s was the driver that propelled the rise of energy service firms. A couple of years in to the Trump presidency we’ve witnessed a significant sweeping deregulation in the energy industry which demonstrably benefits energy service companies.

In 2006 the industry group NAESCO said energy service companies grew by 22% and boasted $2.6 billion in profits marking a paramount moment for energy service companies through the U.S.A.. In Canada the popularity of ESCOs also grew dramatically primarily in the oil full province of Alberta.

Each energy service company varies in their own technical special areas of practice whilst others cover the entire array of service which includes auxiliary and wellsite heating, meter proving, sampling and analysis, instrumentation and even vegetation management. In actuality we can easily go on for hours on end about the detailed list of solutions ESCOs provide.

Energy procurement providers also play a fundamental role in the management of energy expenses with the goal of lowering spending and making efficiency a main priority in most organizations. In contrast to popular belief energy rates are in fact negotiable and it is energy consulting organizations that can help companies discover more economical energy rates. These service providers start with performing what is acknowledged as a baseline of initial energy assessment which may or may not include pipeline leak detection services. This produces a layout of existing energy consumption which sets out to determine reference points so the energy management consultant can prove any future cost savings. The energy management consultants are generally, independent of the organization itself and work in unison with top brass. At this hierarchal degree the energy experts have immediate access to the organizations decision makers.

Energy services firms encompass a wide array of different services and products. You don’t have to look very far to see the devastation created by COVID19. Tens of thousands of jobs in the energy sector were lost in the first half of 2020 throughout the US and Canada.

We spoke with Dale Scordo, an operations executive with Versa Energy service providers and here’s what he had to say.

“The energy sector has experienced many hits over time and if I’m to be genuine, whilst this infection is dreadful and in a sweeping manner, the industry will return. Our corporation as an example has used the past couple months to plan on how we intend to make progress in 2021.”

Energy services companies are usually privately owned companies, whether independent or a component of a large conglomerate, state owned, nonprofits, jv partnerships, manufacturers or manufacturers’ subsidiaries.

Since its creation in the 90’s, a single U. S. governmental program called “Super-ESPC” (ESPC stands for Energy Savings Performance Contracts) has actually been responsible for $2.9B in ESCO contracts. With it being renewed and modified in late 2008 they’ve awarded 16 organizations with what’s often called Indefinite delivery/indefinite quantity or IDIQ contracts priced at a minimum of $5 billion each on average. They are skilled in streamlining and simplifying the whole job to ensure the highest possible efficiency and energy cost savings.

It is without doubt that we will be seeing a transformation, or an progression per se, of energy utility organizations whereas instead of selling just electricity or gas, utilities organizations will begin to sell bundled services, which might include providers utilities have not considered before, service enabled by smart meters and smart home innovation, like home protection, as an example, or monitoring the elderly. In Canada we generally see energy providers pairing with government so they’ll be able to further broaden their reach with customers this includes the respected natural gas company in Canada named Enbridge, Enbridge has worked vigilantly to grow their service providers and products to obtain a greater amount of the energy consumer market. This phenomena was the start of the current energy provider reinventing itself as a twin pack offer both the solutions like a utility company and the energy as well.

Now before you go thinking this spells the end of energy services companies I’d like to emphasis that professional energy providers organizations or those operating in the oilfields, are a modern necessity and can not be replaced by utility heavyweights. However there remains the possibility they could bring them more internal as opposed to outside independent organizations. If there’s any takeaway from reading this is that energy providers organizations are going to be with us for the predictable future and adapting to anything that the world brings its way.