South America smart grid market worth $49.8bn by 2023


Washington, DC, U.S.A. — (METERING.COM) — June 11, 2013 – Smart grid expenditure in South America will cumulatively reach $49.8 billion by 2023, allocated across the five segments of advanced metering infrastructure, distribution automation, wide area measurement, home energy management, and information technology, according to a new study from Northeast Group, LLC.

The bulk of the spending will be in distribution automation ($23.2 billion), followed closely by smart metering ($19 billion with 80.7 million meters).
“When we released our first South America study two years ago, there was a lot of potential but limited activity,” noted Ben Gardner, president of Northeast Group. “Since then, several countries have drafted smart grid roadmaps, launched numerous pilot projects and vendor activity has accelerated across the region.”

According to the study South America is one of the most attractive emerging market regions for smart grid. It is comprised of countries with increasingly proactive regulatory frameworks and core business case indicators that point towards immediate benefits from smart grid. Among these South American utilities will receive near term savings from smart meter deployments by reducing non-technical losses, with the 15.5% regional distribution loss rate among the highest in the world.

But there are also important long term benefits to smart grid that help win governmental support, including rising middle classes that mean that demand response programs will grow in importance and developing the region’s strong solar, wind, and small hydro resources that will require smart grid to help manage the increased variability. Utilities can therefore make near term deployments to help reduce losses, while laying the groundwork for long term benefits.

This study covers all ten Latin countries in South America. Eight of these countries already have significant pilot projects in place, while half of the countries have begun to develop some form of smart grid roadmap. Brazil is leading the way with pilot projects dating back to the mid-2000s, over one million smart meters deployed and a number of smart city projects that are testing out a variety of smart grid applications. Furthermore, Brazil’s government has set clear regulations for smart meter deployments and created incentives for residents to install small scale solar PV along with smart meters.

But Brazil is not alone in its smart grid development. Ecuador has set an even more ambitious timeline for smart grid deployments, while Colombia and Peru are in the process of finalizing smart grid roadmaps. Chile is developing its own smart city projects, Argentina is funding smart grid R&D, and even Paraguay is developing smart meter pilot projects.

Beyond AMI, distribution automation is a focus for almost all South American utilities due to high outage rates, and several South American countries are also currently developing phasor measurement unit projects throughout the transmission grid.