Smart Grid Technology Market

Smart grid technology includes a large number of individual components such as intelligent appliances, smart power meters, smart substations, super conducting cables, integrated communication systems, and phasor management units. These components optimize and monitor peak loads, customer preferences on electricity consumption, two-way communication between electricity provider and end user for automatic billing process or any maintenance problems, safe and reliable delivery of energy, identifying faults for the entire transmission line, and power outage history. Installation of smart grids in power sector is a capital-intensive process, but over the time period, it is financially and environmentally viable. The smart grid technology market is segmented on the basis of component and region.

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Prominent trends identified in the global Smart Grid Technology Market are growing investments in research and development (R&D) of smart technology software such as wide area monitoring and controlling, renewable energy integration, and advanced metering infrastructure. Also, several governments are looking for efficient methodologies to manage distribution of energy sources and reduce carbon emissions released by conventional energy resources. Additionally, growing requirement by power utility companies to upgrade and modernize their transmission and distribution (T&D) networks, owing to the emergence of new utility-scale and generated renewable capacity.

On the basis of category

The Smart Grid Technology Market is categorized on the basis of component into software, hardware, and services. The software components category is sub-classified into advanced metering infrastructure (AMI), distribution management system, network management system, grid asset management, substation automation, grid security, and billing and customer information system. Among these, distribution management system holds a significant market share, owing to its capability to provide consistent, safe, and proficient power by offering advanced analytics through integration of outage management system (OMS), energy management system (EMS), supervisory control and data acquisition (SCADA), and advanced fault and network analysis. Based on the services component, deployment and integration holds a significant share in the market, due to growing demand for smart grids.

Based on geography

On the basis of region, the smart grid technology market is classified into Asia-Pacific (APAC), North America, Latin America (LATAM), Europe, and Middle East and Africa (MEA). During the historical period, North America held the largest share and is expected to hold significant share in the market throughout the forecast period, owing to early adoption of smart grid projects. Developed countries like the U.S. and Canada are investing heavily in this market. Also, the MEA region has a potential scope for smart grids in the coming years, due to high availability of both conventional and renewable energy resources, and several countries in the region are implementing community-based micro smart grids in their rural communities.

Key factors driving the growth of the smart grid technology market are efficient way of managing distributed energy resources and increasing concerns on reduction of carbon footprint during electricity generation. These key factors are leading to substantial growth in investments in transmission optimization and distribution automation for grid modernizing.

Normally, grid connectivity is a one-way communication between transmission company and end user, but by introducing smart grid connectivity, it can be transformed into a two-way communication. It helps the transmission company to take back extra electricity from end users who are producing at their residential and commercial installations. According to International Energy Agency (IEA), the U.S. alone is expected to spend $2.1 trillion by 2035 in the smart grid technology market to develop grid technologies and infrastructure to prepare for high penetrations of renewable sources.