By Aida Mezit, Conference Manager, Metering, Billing/CRM Europe
Despite the economic slowdown and huge investment needed, the smart grid market is showing no signs of abating. Its size and projected growth are best exemplified in figures, with the estimated total investment for full global smart grid overhaul at a dazzling $2 trillion. In China alone, the investment of $90 billion in smart grid technologies is planned by 2020. The true value of the global smart grid market by 2020 is expected to be $100 billion, a significant share of it in China and other fast growing economies.
The key drivers behind such a staggering need in investments are the sharp rise in electricity demand especially in the BRIC countries, the need to modernize ageing infrastructure, economic and political demands for a lesser dependence on foreign fossil fuels, and the pressure to move to renewable sources.
The nascent smart grid market is a playing field for new technologies, commercial arrangements and partnership, and a whole new set of entrants – from telcos, internet providers, data aggregators, car manufacturers, to home automation providers, to name a few. If predictions are correct, the $100 billion market forecast indicates that smart energy is on the cusp of becoming the most significant investment and growth field of the 21st century.
To understand the key strands of these developments, we have combed through the European market, assessed technologies and individual projects, governments’ stances and political sentiment to create the list of findings, both the positive ones and those where progress is yet to be made.
On the plus side, technology is making an undisputed impact with many projects well under way and new in the pipeline.
Summary of main trends
- Smart grid is moving from research to an early industrialization stage. The first cohesive projects outside the controlled pilot environment are already being rolled out. Initial results and feedback are already available, with many validating energy efficiency claims and cost-benefit ratios.
- There has been an accelerated number of smart projects over the last few years. The European Commission has recently published an inventory of over 300 projects currently taking place in Europe. The trend shows more advanced and integrated projects, in particular the rise of ‘smart communities’, with a gradual spread from original hubs of activities (such as Scandinavia) to other regions of Europe.
- Next generation technologies and innovation are making an impact. Energy solution giants are innovating on an unprecedented scale, creating cutting edge technologies to support a complex network of production, management and consumption, and where new demands on the grid, such as renewables or microgeneration are optimized.
What is hampering developments is the regulatory and industry incoherence, with the consumer still inadequately included in the dialogue.
- An absence of a clear regulatory framework and electricity market overhaul, instrumental to stimulating utilities to innovate, create novel business models and attract investments. A more coherent market structure also presents huge opportunity for technology giants and the nascent new entrants, all pushing to capture a lucrative share of what is still a very elusive market.
- Lack of standardization and interoperability, which result in fragmented communication standards and protocols that lag behind technology advancements, making it impossible to fully exploit new technologies.
- Getting consumers to participate in energy exchange, from home management and home production to demand response programs. There seems to be an entrenched lack of trust on the part of the consumer and unclear communication on the part or utilities.
These findings, exemplified with best European and global projects and technology, the latest on regulation, policy and innovation have been poured into over 100 of presentations at the industry’s largest and most comprehensive European event – Metering, Billing/CRM Europe, co-located with Transmission & Distribution/Smart Grid and Smart Homes.