Utilities globally are expected to increase investments in communication technologies by 4.4% between 2021 and 2026 as the smart grid modernisation of electricity networks intensifies, according to a new report issued by ResearchAndMarkets.
Revenue generation within the market is expected to increase from $18.7 billion to $23.2 billion during the forecasts period as utilities increase focus on grid reliability by adopting smart grid capabilities such as remote network monitoring and operation.
Other factors driving the utility communication technologies market will include the need to enhance operational efficiency, reduce the length and occurrence of outages, the race to digitalisation and increased government support for the deployment of smart grid solutions.
The Asia Pacific region is expected to be the fastest-growing market for utility communications, followed by Europe.
There is a high demand for electricity in the Asia Pacific region due to the continued increase in population and industrial activities hence utilities in the region are expected to invest massively in smart grid capabilities to monitor grid networks.
The region is expected to invest about $9.8 billion in the development of smart grid infrastructure between 2018 and 2027.
Countries such as China, Japan, and South Korea are continuously investing in grid expansion projects to increase the reliability and resilience of distribution grids, which is likely to drive the demand for utility communication solutions and related services in the coming years.
Utility companies in the region are also moving toward clean energy on a large scale to meet the growing energy needs of the region. In 2017, China accounted for 45% of the total global investment (nearly $126.6 billion) in renewable power generation projects, followed by India, with an investment of $10.7 billion, according to the Renewable Energy Policy Network (REN21). The trend is expected to continue and will require infrastructure modifications which will include installation of new communication equipment or upgrading of existing ones.
North America is expected to follow the Aisa Pacific region in terms of investments owing to the increasing need to upgrade ageing infrastructure.
Despite massive investments being directed towards the improvement of cellular networks, utilities are expected to continue to prefer wired communication solutions. The wired segment is expected to hold the largest share of the utility communication market, by technology type, during the forecast period.
The solutions utilities are expected to prioritise include optic fibre, Ethernet, powerline carrier, SONET/SDH, MPLS-IP, and MPLS-TP. Optic fibre and Ethernet will be the most preferred medium for networking in utility communication owing to higher bandwidth support and speed, which helps in providing high performance, reliability, and improved coverage.