The decarbonisation of the commercial and industrial (C&I) sector is gaining momentum, as tech advancements, regulatory oversight, and demand for sustainable solutions influence firms’ decision making, Frost & Sullivan has said.
‘Regulatory oversight and market-driven forces are propelling companies to optimise energy use, electrify operations, and shift to low-carbon energy sources,’ the consulting firm noted. ‘A significant transformation in energy procurement is underway and businesses are increasingly adopting digital solutions to track emissions, manage energy consumption, and balance supply and demand in real time.’
Double-digit CAGR
This transition is taking place despite ongoing geopolitical uncertainties, with Frost & Sullivan noting that market forces are set to drive the decarbonisation of the C&I sector at a double-digit CAGR over the next decade.
Climate-focused reporting frameworks are enhancing transparency and compliance, it added, with corporate sustainability and accountability central to the transition.
Stricter regulations, such as the European Corporate Sustainability Reporting Directive (CSRD), are prompting businesses to make supply chain sustainability a priority, by requiring businesses to report on direct and indirect value chain relationships.
‘An unprecedented opportunity’
“The next decade presents an unprecedented opportunity for businesses to accelerate their decarbonisation efforts,” commented Jonathan Robinson, growth expert at Frost & Sullivan. “As technology costs decline and corporate climate accountability grows, companies that proactively invest in energy optimisation and sustainability will be best positioned for success.”
Corporate power purchase agreements (PPAs) are also emerging as a key driver of in the renewable energy transition, it added, helping businesses secure renewable energy while insulating against energy price volatility. Multi-buyer agreements, energy storage integration, and the rise of alternative energy sources like geothermal and nuclear are also shaping the future of corporate energy procurement.
“Standardisation efforts at corporate and government levels are streamlining PPA adoption, reducing costs, and accelerating agreements,” Robinson added. “Frost & Sullivan projects that by 2035, corporate PPAs will drive over 25% of global wind and solar development, cementing their role in the energy transition.”
The consultancy added that the global C&I distributed solar PV market is set to experience peak demand by 2030, when it is forecasted to reach 115.2 GW in annual installations. Growth is poised to slow in legacy markets after that date, it noted, however emerging economies across Asia, Latin America, and Africa & the Middle East are expected to fuel continued expansion. Read more here.
