A new report released by research firm Frost & Sullivan explores the global digital grid solutions market and how smart metering and seven other factors will disrupt the segment.
The global digital grid solutions market will expand owing to first and second-generation smart metering deployments in China, North America and Europe and other factors including advancements in digital technologies, climate change policies and ageing infrastructure, according to the report.
Frost & Sullivan’s Global digital grid growth opportunities report states that the market will record a 1.2% compound annual growth rate between 2020 and 2030. Revenue generation is anticipated to increase from $8.15 billion in 2020 to $9.21 billion by 2030.
The report states that China will generate the highest revenue owing to the replacement of first-generation smart meters followed by North America as utilities in the region increase the installation of second-generation smart metering devices. Smart meter rollouts in Europe are also expected to contribute to the growth of the digital grids solutions market in the region.
The market in the Asia Pacific – which will hold the fourth spot – is expected to be driven by the electrification of grid and transportation systems, according to the study. Utilities in the region are expected to deploy digital grid solutions to manage renewable energy resources and electric vehicles.
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Other factors that will drive the market will include an increase in investments in grid modernisation under efforts by utilities to enhance grid resilience and reliability. An increase in the penetration of distributed resources and a continued decline in technology costs are expected to help expand the market.
The report states that the pandemic slowed market growth in 2020. However, by 2026, the digital grid solutions market will cross 2019 levels as new, delayed and previously halted projects begin.
Lack of funding and budgetary constraints amongst utilities are also expected to hinder deployment as well as a lack of willingness/awareness by energy companies to switch to smart grid capabilities.
Market trends and opportunities
Frost & Sullivan also forecast a surge in utility investments in cybersecurity technologies by 2025 as energy companies seek to reduce the vulnerability of grid networks to cyberattacks as digitalization intensifies.
Technologies such as big data analytics, blockchain, 5G, distributed energy resources management, edge intelligence and demand-side management technologies and their integration are expected to help utilities maximize return on investments on digital grids enhance consumer offerings as well as optimise grid operations, according to the study.
The study states that growth opportunities for market players will be around the use of IoT to integrate transmission and distribution equipment for grid resilience, mergers and acquisitions between competitors to leverage market synergies and in the use of energy-as-a-service business models for enhanced customer experience.
Find out more about the report.