South America is expected to invest $20.1 billion in smart grid infrastructure over the next decade.
Market research firm Northeast Group forecasts the majority of the investments to be directed towards smart grid infrastructure including smart metering and battery storage systems.
Investments towards the sector will grow as utilities seek to modernise energy systems to address “…high rates of electricity theft, poor reliability and subpar operations. Brazil alone loses $6.5 billion per year due to electricity theft and other non-technical losses,” says Ben Gardner, president at Northeast Group.
“South America has always had great potential to benefit from smart grid infrastructure investment.”
Investments in smart grid have been low over the past years due to lack of funding as the region suffered from economic challenges. For instance, Brazil has experienced an economic downturn for eight consecutive quarters.
However, economic recovery by most countries in the region will drive investments towards smart grid infrastructure.
Regulatory back-up is also expected to improve investments towards smart infrastructure, evidenced by Chile and Colombia having established policies supporting rollout of smart meters.
Energy stakeholders in Brazil are discussing a smart meter regulatory target.
The market is expected to be dominated by international vendors including ABB, Honeywell, Itron, Kamstrup, Landis+Gyr and Schneider.
South America is also emerging as a key geography for Chinese vendors hoping to gain market share from the European and North American vendors. A number of Chinese vendors have established themselves in the market, in some cases acquiring local Brazilian companies.