Washington, DC, U.S.A. — (METERING.COM) — February 25, 2013 – More than 400 vendors are vying for the more than $66 billion smart grid market opportunity by 2023 across 35 emerging market countries, according to a new report from the Northeast Group.
Among these 400 vendors, the number of local-based vendors active in smart grid projects currently exceeds the number of large international vendors, signaling an opening up of the smart grid vendor landscape. Among these local vendors, over 160 of them based in Central and Eastern Europe, Eurasia, Latin America, Middle East and North Africa, South Africa, and Southeast Asia are well positioned in the smart grid market. Of these, over 25% are already active in significant smart grid projects.
“The smart metering market alone is expected to cumulatively reach $66.3 billion in emerging markets by 2023 – it is not surprising that emerging market-based companies are rising to meet this demand,” said Northeast Group. “Local vendors are often best positioned to understand the unique characteristics of specific smart grid markets, which can vary greatly from region to region. These vendors are proving to be invaluable partners for international vendors and several of them are also capable of carrying out large-scale projects on their own.”
Of the leading smart metering, distribution automation, IT, home energy management and professional services vendors, nearly all already have a significant presence in emerging markets, and over 10 percent already have offices in the 35 countries studied. On average, leading international vendors currently have between three to five emerging market partners, which help them in a number of ways, from gaining local market insight to avoiding potential tariff barriers.
These market dynamics could also lead to an increase in mergers and acquisitions in the smart grid sector in emerging market countries. M&A activity is forecast to level off in the more developed smart grid markets after a flurry of activity over the past couple of years. Leading smart grid vendors with sufficient capital could look to acquire emerging market-based vendors, who often own technologies and capabilities well suited to local markets. There have already been approximately a dozen significant acquisitions of emerging market-based smart grid vendors in recent years.
The study also found that vendors in the smart grid market vary in terms of size, ranging from less than 10 employees to well over 1,000, and segment, covering smart metering, distribution automation, IT, home energy management and professional services.