Will blockchain define smart electric meter market trends of the future?

Touted as one of the highly remunerative verticals of the overall smart & sustainable technologies industry, the smart electric meter market has recently caught the eye of prominent investors as these devices have emerged as viable alternatives over conventional electric meters.

In fact, smart meters are said to be one of the biggest developments for the electricity grid, thanks to the two-way communication and real-time monitoring technology that has potentially led to the fundamental transformation of modern power grids and sustainable energy mix protocols.

As a result, several regional governments have initiated smart electric meter rollouts and installations, which has strongly influenced the smart electric meter market trends.

Evidence in support of the aforesaid is the substantial valuation of smart electric meter industry that surpassed $7 billion in 2017. With several countries further adopting smart meter deployment, Global Market Insights predicts the smart electric meter market to hit $10 billion by 2024.

Market leaders

China has emerged as a leader with target installations poised to exceed 380 million devices by 2020, followed by the US with 132 million installations of smart meter systems.

Reports claim that China accounted for more than 70% of the overall Asia Pacific smart electric meter market share in 2017 and is further expected to depict stellar growth with the country’s 13th five-year plan emphasizing on the developments of smart cities and effective monitoring of electricity and water.

Meanwhile, by the end of 2016, the electric utilities of the US had installed more than 70 million advanced metering infrastructure (AMI) smart meters, accounting 40% of the US electricity customer base – as per the Residential Energy Consumption Survey piloted by the EIA in 2015.

With further encouragement from the regulators toward adoption of smart technologies, the U.S. smart electric meter market is forecast to exceed USD 1 billion in terms of revenue by 2024.

Cyber-attacks & security threats

Regardless of the benefits to consumers and governments, the deployment of smart meters has always been in controversy as it is plagued with cybersecurity problems. Given the smart meter data collection and communication abilities, these meters have become a target for malicious attackers who may benefit from manipulating or stealing the data, say experts familiar with the industry dynamics.

In late 2015 and in 2016, Russian hackers shut down the parts of Ukraine’s power grid. According to reports, the Russians had successfully breached the computers of several US electric utilities and were able to gain information as well as access to critical control systems that were enough to cause power outages.

In response, electric utilities are betting billions of dollars to prevent rival countries from invading the power grids – a move that would potentially impact the commercialization landscape of smart electric meters industry.

Is blockchain a solution?

As the controversies and hype around the Internet of Things and smart meters continue, blockchain, the technology first used in cryptocurrencies, is being touted as the elusive link that will enable IoT-based deployments to be more secure.

The underlying technology has identification security through private-public encryption with key access. Experts cite that if the key access codes are kept secure and safe, blockchain has the potential to take care of the rest.

On this note, it is prudent to mention that Xage, a cyber security start-up leveraging blockchain to securely link industrial machines from oil wells to smart meters, has raised $12 million from investors such as GE Ventures, as the US government is constantly thriving to curtail the nooks in the defenses of the energy industry.

The impact of initiatives such as these are certain to be felt across smart electric meter market, which in the years ahead, is likely to be characterized by the adoption of the blockchain to counteract security issues.

Multiple other companies including Rockwell, Siemens, Claroty, and Schneider-Electric are also working toward the security challenges looming over the smart electric meter market. While the smart electric meter industry remains rigid in terms of deployment and regulations, it remains to be seen how a certain degree of blockchain-based interventions will unfold in the ensuing years.