Europe’s AMI market to grow at fast rate

Neha Vikash,
Research Analyst,
Frost & Sullivan
London, England — (METERING.COM) — January 23, 2013 – Legislation and standardization are set to catalyze the advanced metering infrastructure (AMI) market in Europe, with market participants working towards standardization and fulfilling regulatory requirements for the development of smart meters and AMI to begin mass rollouts, according to analysts Frost & Sullivan.

The company projects that the AMI revenue in Europe is expected to grow from $1.13 billion in 2011 to $3.72 billion in 2016 at a compound annual growth rate (CAGR) of 26.9 percent.

“Emerging smart grid technologies, which support enhanced energy management, will boost the installation of AMI in Europe,” noted Frost & Sullivan Energy & Power Supplies research analyst Neha Vikash. “The market is expected to witness higher growth not only in smart meters and the installation segments, but also in communications networks, MDM, customer and program data management segments as well.”

However, smart meter implementation in Europe reveals regional disparities. Market growth has been faster in Western and Northern Europe. The lack of regulatory drive and utility implementations has affected installation rates in Central and Eastern Europe. It is expected that the smart metering activity in the CEE region will follow the Western European knowledge wave and experience – and that once this large scale roll out activity begins, it will be faster compared to that of Western Europe.

Regulatory approval, along with increased competition, aging infrastructure, and new technology should continue to drive investments in advanced metering and intelligent grid technologies.Nevertheless, EU member states that lack the regulatory push for deployment will experience large-scale implementation after 2015, as they have to comply with the EU’s Third Energy Directive, or pay a high penalty fee.

In addition to legislation, the lack of communication standards and security issues also play a major role in determining market prospects. In fact, data security is an issue among all member states, but it is of higher importance in the UK, Germany and the Netherlands. This has resulted in a delay in smart meter roll out plans by utilities.

Standardization is also likely to affect future smart meter sales, development and innovation. Meters complying with security requirements as per the standardization mandate as well as satisfying regional legislative security requirements are likely to encourage customers to adopt smart meters.