Smart Grid Market Forecasts to 2028 – Global Analysis By Component (Hardware, Software, Services), Application (Generation, Transmission, Distribution, Consumption), End User (Residential, Commercial, Industrial) and By Geography
According to Stratistics MRC, the Global Smart Grid Market is accounted for $43.81 billion in 2021 and is expected to reach $167.33 billion by 2028 growing at a CAGR of 21.1% during the forecast period. Smart Grids are often defined as a sensible electrical network that comprises an electrical network and smart data communication technology. It is capable of delivering electricity to the user from multiple and cosmopolitan sources such as wind turbines, solar energy systems, and even plug-in hybrid electric vehicles. A smart grid is an electricity network using digital technology to provide electricity to consumers via two-way data communication. This system allows for monitoring, analysis, control, and communication within the supply chain to help increase efficiency, lessen energy consumption and cost, and maximize the transparency and dependability of the energy supply chain. The smart grid was introduced to overcome the flaws of conventional electrical grids by using smart meters.
Supportive regulatory framework of governments worldwide
Governments across the world have imposed several supportive policies and mandates, focusing on implementing smart grids and spreading awareness about energy conservation. These regulations drive the adoption of smart grid technology for industrial, commercial, and residential applications. The Department of Energy (DOE) was allocated USD 4.5 billion through the American Recovery and Reinvestment Act of 2009 (Recovery Act) funds to modernize electric power grids. Under the Smart Grid Investment Grant (SGIG) program, the DOE and the electricity sector have jointly invested USD 8 billion in 99 cost-shared projects, wherein more than 200 electric utilities and other organizations have participated in modernizing the electric grid infrastructure, strengthening cybersecurity, improving interoperability, and collect an unprecedented level of data on smart grid operations and its benefits. The Smart Grid Investment Grant (SGIG) program aims to accelerate the modernization of the nation’s electric transmission and distribution systems.
High installation cost of smart grids
The initial phase of smart grid deployment is capital-intensive. It may restrain the growth of the global smart grid market. The role of the local and national governments is vital in transforming energy infrastructure. Smart grid technology requires huge initial investments to set up the transmission networks that allow two-way communication between the utility and its customers. Furthermore, effective deployment of a smart grid creates the need for strong coordination across customary organizational boundaries, high flexibility toward significant changes in processes, and rigorous governance. High investments for the successful deployment of smart grids may add an economic burden on the government. Similarly, high operational and maintenance cost after the deployment of smart grid technology is another big concern for utility providers. Developing countries with poor infrastructure, such as China, Brazil, and India, also need huge financial support for building and updating the infrastructure. Though billions of dollars are being invested in smart cities projects, the challenge to ensure a significant and favorable return on investment (ROI) is still there. Public and private organizations are going to play a major role by offering loans at low-interest rates or offering grants and funds for smart grid projects.
Ongoing smart city projects in developing countries
Smart cities are developed urban areas that create sustainable economic growth and high quality of life by excelling in several fields, such as technology, mobility, environment, living standard, and government regulations. More than 100 smart city projects are going on across the world, presenting a huge opportunity for technology companies, utility service providers, and consulting service providers. In smart cities, key services pertaining to utilities, safety, transportation, and healthcare segments are managed more efficiently and intelligently with proper utilization of resources and the adoption of advanced technologies such as IoT and smart energy meters. Traditional power grid models cannot provide the same level of efficiency to citizens and find it difficult to meet the requirements for energy monitoring, real-time data gathering, and smart billing, which are generated due to modernization. Smart cities are likely to significantly depend on a robust smart grid platform to create a centrally planned and controlled infrastructure. Favorable conditions such as developed ICT infrastructure and better internet access are likely to result in widespread adoption of smart grids in smart cities.
Proper storage and management of complex data generated by smart grid infrastructure
The deployment of smart grid technologies has led to the generation of vast volumes of highly complex data. The data is related to consumer information, utility consumption, transmission logs, etc. It is highly unstructured and needs to be processed to gain vital insights. The continuous generation of data from various nodes of networks is creating challenges for smart grid solution providers to store and manage this data efficiently. The unmanaged data can raise multiple threats, and it might eventually become difficult to gain valuable insights from the data. The respective authorities need to create high-volume data centers, as well as deploy analytical solutions without increasing the cost. Smart utilities are generating huge volumes of data from millions of smart meters, grid sensors, control devices, and networks of other electronic devices. Generating and gathering useful data insights from such vast data for intelligent decision-making is the challenge faced by utility technology providers. The processing of large volumes of data to provide real-time analytics is one of the major functions of smart grid technology. To gain a competitive edge, solution providers need to develop superior data analytical techniques and accurate predictive analysis models. Providing intelligent business solutions to predict equipment failure, natural disasters and their effects, and customer behavior patterns based on the historical data and usage patterns is the most complex challenge faced by utility providers.
The wireline segment is expected to be the largest during the forecast period
The wireline communication technology segment accounted for the largest share of the smart grid market. Wireline communication technology is driving the market as it is comparatively cost efficient and this type of transmission is less prone to third-party intrusions and interruptions. It mainly includes fiber optic, Ethernet, and powerline carriers. Fiber optic and Ethernet are the most preferred media for networking in distribution automation. Fiber optic offers higher bandwidth support and speed, which helps provide high performance, reliability, and improved coverage. Moreover, fiber optic communication technology is widely used in substations as it can operate at high voltages. Currently, commercial optical fiber transmission systems offer bit rates of up to 10 Gbps, using single wavelength transmission and approximately 40 to 1,600 Gbps using wavelength division multiplexing (WDM).
The transmission segment is expected to have the highest CAGR during the forecast period
Optimization of the grid performance owing to reduced balancing cost & technical losses to support the utilities is set to enhance the smart grid market penetration. Adoption of smart systems including home appliances and thermostats along with shifting focus toward digital sensing field devices & communication will propel the demand for grid modernization. Lower outage response duration, consumption patterns, improved resource utilization and high energy efficiency are some factors driving the demand for end-use smart systems. The devices enable utilities to provide information and services to the end users. Rising implementation of ICT technologies along with enhanced focus toward energy integration will propel the product installation.
Region with highest share:
North America is projected to hold the largest market share during the forecast period. The US and Canada, contribute heavily to the growth of the regional market. The region is estimated to account for the largest share of the global smart grid market, and a similar trend is expected to continue in the coming years. One of the key reasons for the large market size is the early adoption of smart grid projects. The strong financial position of the US and Canada enables them to invest heavily in smart infrastructure platforms of the smart grid market. The market in US is expected to grow mainly because it is the most mature market in terms of smart grid deployment, advanced IT infrastructure, the presence of several enterprises, and the availability of technical expertise in the country. Smart grid technology in the US is undergoing a considerable transformation as digital technologies are being applied to distributed energy resources. All these factors are expected to drive the growth of the smart grid market in North America. The U.S will witness substantial growth owing to mounting severity & regularity of natural disasters coupled with unplanned power outages. In addition, increasing government initiatives with the objective to address climate changes and ensure mutual energy security coupled with the incorporation of renewable energy in the power grids will complement the business outlook.
Region with highest CAGR:
Asia Pacific is projected to have the highest CAGR and China has the highest share of the smart grid market in Asia Pacific. Japan and India are other countries making progress in the smart grid market. The need to reduce transmission and distribution losses in developing nations across the region will drive the market. Moreover, the need to reduce carbon emissions from developed nations in the region and the growing consumption of electricity in China, South Korea, Australia, New Zealand, India, and Singapore will drive the smart grid market.
Some of the key players profiled in the Smart Grid Market include ABB, GE, Siemens, Oracle, Schneider Electric, IBM, Wipro, Honeywell, Itron, Eaton, Mitsubishi Electric, Tech Mahindra, SAP, Cisco, Trilliant Holdings, and Tantalus.
In January 2021: Schneider Electric acquired DC Systems BV, which is a major supplier of smart systems. This has helped the company in advancing innovations in electrical distribution.
In September 2020: Siemens Energy, a subsidiary of Siemens, launched its new Unified Power Flow Controller (UPFC) PLUS and expanded the options for grid stabilization. The UPFC PLUS helps system operators stabilize the grid by dynamically controlling the load flow in alternating-current grids.
In July 2018: GE Power’s Grid Solutions business launched a new Advanced Distribution Management Solution (ADMS) in collaboration with Tata Power Delhi Distribution (Tata Power - DDL), specially designed for India, with advanced features such as monitoring, security, analysis, and planning.
In May 2018: Itron entered a contract with Jamaica Public Service Company (JPS), an integrated electric utility company and the sole distributor of electricity in Jamaica, to provide Itron’s smart grid solution for Jamaica.
Table of Contents
1 Executive Summary
2.2 Stake Holders
2.3 Research Scope
2.4 Research Methodology
2.4.1 Data Mining
2.4.2 Data Analysis
2.4.3 Data Validation
2.4.4 Research Approach
2.5 Research Sources
2.5.1 Primary Research Sources
2.5.2 Secondary Research Sources
3 Market Trend Analysis
3.6 Technology Analysis
3.7 Application Analysis
3.8 End User Analysis
3.9 Emerging Markets
3.10 Impact of Covid-19
4 Porters Five Force Analysis
4.1 Bargaining power of suppliers
4.2 Bargaining power of buyers
4.3 Threat of substitutes
4.4 Threat of new entrants
4.5 Competitive rivalry
5 Global Smart Grid Market, By Component
5.2.1 Smart Meters
5.2.3 Programmable Logic Controller (PLC)
5.2.4 Networking Hardware and Energy Storage
5.3.1 Advanced Metering Infrastructure
5.3.2 Smart Grid Distribution Management
5.3.3 Smart Grid Security
5.3.4 Billing and Customer Information System
5.3.5 Supervisory Control and Data Acquisition (SCADA)
5.3.6 Smart Grid Communication
5.3.7 Smart Grid Network Management
5.3.8 Grid Asset Management
5.3.9 Substation Automation
5.4.2 Deployment and Integration
5.4.3 Support and Maintenance
6 Global Smart Grid Market, By Communication Technology
7 Global Smart Grid Market, By Technology
7.2 Communication Infrastructure
7.3 Distribution & Network Automation
7.4 Transmission Upgrades (TU)
7.5 Consumer Interface
7.6 Cyber Security
8 Global Smart Grid Market, By Application
9 Global Smart Grid Market, By End User
10 Global Smart Grid Market, By Geography
10.2 North America
10.3.6 Rest of Europe
10.4 Asia Pacific
10.4.5 New Zealand
10.4.6 South Korea
10.4.7 Rest of Asia Pacific
10.5 South America
10.5.4 Rest of South America
10.6 Middle East & Africa
10.6.1 Saudi Arabia
10.6.4 South Africa
10.6.5 Rest of Middle East & Africa
11 Key Developments
11.1 Agreements, Partnerships, Collaborations and Joint Ventures
11.2 Acquisitions & Mergers
11.3 New Product Launch
11.5 Other Key Strategies
12 Company Profiling
12.5 Schneider Electric
12.11 Mitsubishi Electric
12.12 Tech Mahindra
12.15 Trilliant Holdings
List of Tables
1 Global Smart Grid Market Outlook, By Region (2020-2028) ($MN)
2 Global Smart Grid Market Outlook, By Component (2020-2028) ($MN)
3 Global Smart Grid Market Outlook, By Hardware (2020-2028) ($MN)
4 Global Smart Grid Market Outlook, By Smart Meters (2020-2028) ($MN)
5 Global Smart Grid Market Outlook, By Sensors (2020-2028) ($MN)
6 Global Smart Grid Market Outlook, By Programmable Logic Controller (PLC) (2020-2028) ($MN)
7 Global Smart Grid Market Outlook, By Networking Hardware and Energy Storage (2020-2028) ($MN)
8 Global Smart Grid Market Outlook, By Software (2020-2028) ($MN)
9 Global Smart Grid Market Outlook, By Advanced Metering Infrastructure (2020-2028) ($MN)
10 Global Smart Grid Market Outlook, By Smart Grid Distribution Management (2020-2028) ($MN)
11 Global Smart Grid Market Outlook, By Smart Grid Security (2020-2028) ($MN)
12 Global Smart Grid Market Outlook, By Billing and Customer Information System (2020-2028) ($MN)
13 Global Smart Grid Market Outlook, By Supervisory Control and Data Acquisition (SCADA) (2020-2028) ($MN)
14 Global Smart Grid Market Outlook, By Smart Grid Communication (2020-2028) ($MN)
15 Global Smart Grid Market Outlook, By Smart Grid Network Management (2020-2028) ($MN)
16 Global Smart Grid Market Outlook, By Grid Asset Management (2020-2028) ($MN)
17 Global Smart Grid Market Outlook, By Substation Automation (2020-2028) ($MN)
18 Global Smart Grid Market Outlook, By Services (2020-2028) ($MN)
19 Global Smart Grid Market Outlook, By Consulting (2020-2028) ($MN)
20 Global Smart Grid Market Outlook, By Deployment and Integration (2020-2028) ($MN)
21 Global Smart Grid Market Outlook, By Support and Maintenance (2020-2028) ($MN)
22 Global Smart Grid Market Outlook, By Communication Technology (2020-2028) ($MN)
23 Global Smart Grid Market Outlook, By Wireline (2020-2028) ($MN)
24 Global Smart Grid Market Outlook, By Wireless (2020-2028) ($MN)
25 Global Smart Grid Market Outlook, By Technology (2020-2028) ($MN)
26 Global Smart Grid Market Outlook, By Communication Infrastructure (2020-2028) ($MN)
27 Global Smart Grid Market Outlook, By Distribution & Network Automation (2020-2028) ($MN)
28 Global Smart Grid Market Outlook, By Transmission Upgrades (TU) (2020-2028) ($MN)
29 Global Smart Grid Market Outlook, By Consumer Interface (2020-2028) ($MN)
30 Global Smart Grid Market Outlook, By Cyber Security (2020-2028) ($MN)
31 Global Smart Grid Market Outlook, By Application (2020-2028) ($MN)
32 Global Smart Grid Market Outlook, By Generation (2020-2028) ($MN)
33 Global Smart Grid Market Outlook, By Transmission (2020-2028) ($MN)
34 Global Smart Grid Market Outlook, By Distribution (2020-2028) ($MN)
35 Global Smart Grid Market Outlook, By Consumption (2020-2028) ($MN)
36 Global Smart Grid Market Outlook, By End User (2020-2028) ($MN)
37 Global Smart Grid Market Outlook, By Residential (2020-2028) ($MN)
38 Global Smart Grid Market Outlook, By Commercial (2020-2028) ($MN)
39 Global Smart Grid Market Outlook, By Industrial (2020-2028) ($MN)
40 Global Smart Grid Market Outlook, By Government (2020-2028) ($MN)
Note: Tables for North America, Europe, APAC, South America, and Middle East & Africa Regions are also represented in the same manner as above.
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