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MARKET OVERVIEW – INDUSTRY TRENDS

BUSINESS OVERVIEW STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION

Our Market at a Glance

Smart cities

of sensors for data collection and analysis, the implementation of adaptive lighting solutions, and the continued development of smart city initiatives that integrate various cognitive technologies into urban infrastructure. The growth of smart cities is having a significant impact on the expansion of the smart street lighting market. Smart cities leverage information and communication technology (ICT) to enhance administrative efficiency, disseminate information, improve public services, and elevate the overall wellbeing of residents. The installation of intelligent lighting systems in smart cities increases citizen satisfaction with safety and security, creates substantial savings in power consumption and maintenance costs, and presents opportunities to tailor street lighting to local conditions.

The global smart street lighting market is projected to grow from £2.0bn in 2024 to £4.3bn in 2028, at a CAGR of 21% (source: Research and Markets). Northeast Group forecasts that, by 2033, the overall smart cities sensors market will have a cumulative value of £342bn, of which streetlighting represents £98bn. Growth is expected to be driven by the continued expansion of urbanisation; the introduction of more government initiatives and funding for smart infrastructure projects; heightened demand for energy-efficient solutions; a strong focus on safety and security; and a significant shift towards sustainability in urban development. Key trends include a focus on energy efficiency within smart street lighting, the integration of Internet of Things (IoT) technologies, the utilisation

Enabling a more sustainable future

Energy distribution

Market opportunity

People

Planet

Smart cities

Progress

Sustainable living

Read more about ESG on pages 56 to 65 .

Market drivers

• Desire for higher standards of living and convenience. • Pressure on infrastructure from growing urban populations.

• Increasing focus on renewable energy and sustainability. • Rising demand for cost efficiencies and control. • Advancement in intelligent analytic technologies.

Market research figures quoted indicate broader sector growth potential and do not represent total addressable segments for Lucy products and services.

Energy distribution

and ensure seamless integration into existing grids. The growth of decentralised energy systems and microgrids is also boosting demand for low voltage switchgear that can handle localised power distribution and storage systems. Many developed countries are upgrading outdated electrical grids to improve reliability and efficiency, driving demand for modern switchgear solutions. The transition to smart grids, which incorporate digital features like real-time monitoring and remote control, further fuels market growth. Growth in electric vehicle (EV) infrastructure is placing heavier demands on power grids, making grid management and resilience ever more important. The UK government has set a target of 300,000 public charging points by 2030, against 73,000 in use at December 2024 (source: Zapmap).

The global electricity transmission and distribution market is projected to grow from £262bn in 2023 to £342bn in 2030, at a CAGR of 3.9% (source: Fortune Business Insights). At the distribution end, the global LV and MV switchgear market size was £55bn in 2023 and the market is projected to reach £84bn by 2032, a CAGR of 4.7% (source: Business Research Insights). Rapid urban growth and industrial development, particularly in emerging economies, are leading to a surge in electricity demand, driving the need for reliable and efficient switchgear solutions. Sustainability and the push towards net zero are catalysts for the reduction of greenhouse gas emissions, as governments and regulatory bodies increasingly endorse energy-efficient systems. The rising adoption of renewable energy sources, such as solar and wind, requires advanced switchgear to manage fluctuating power loads

Sustainable living

The goal of green building is to minimise negative effects on the environment and human health, while maximising the positive impact of energy efficiency, water conservation, biodiversity, indoor air quality and overall sustainability. A survey by Zoopla revealed that 69% of individuals who recently purchased, or are considering purchasing, a new-build home prioritise energy efficiency in their decision-making process. The preference for sustainable living is driven both by environmental and economic factors and influences the rental sector as well as new builds. According to Handelsbanken’s 2024 UK Property Investor Report, 92% of investors reported tenant requests for eco-friendly features, such as heat pumps, solar panels, and electric vehicle (EV) chargers, with 58% of tenants expressing a preference for properties with an EPC rating of C or higher.

The UK’s Labour government aims to build 1.5 million homes in the next five years, helped by planning reforms, the release of green belt land and the reintroduction of mandatory housing targets for local authorities. New builds will have to conform to the new Future Buildings Standard (FBS) regulation, which comes into force in 2025 and ensures that all newly constructed property meets stricter sustainability and energy efficiency criteria. The UK green building market was valued at £5bn in 2024 and is expected to grow to £14bn by 2033, at a CAGR of 11% between 2025 33 (source: IMARC Group). Oxfordshire and its neighbouring counties’ residential construction accounts for around 7% of the UK’s total, which will equate to over £1bn by 2033.

Market opportunity

Market opportunity

Market drivers

• Increasing demand from urban populations. • The transition to renewable energy and the adoption of EVs.

• Growth in renewable power storage. • Need for data and intelligent infrastructure. • Demand for grid resilience, reliability and control.

Market drivers

• Support of circular economy models. • Government regulation and incentives.

• Increased environmental consciousness. • Demand for cost-of-living reductions. • Advancements in green building technologies.

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Lucy Group Ltd Annual Report & Accounts 2024

LUCYGROUP.COM

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