Smart Grid Market Overview
[150 Pages Report] The Smart Grid Market is expected to grow at a high CAGRof 19% over the forecasting period (2024-2031). Factors such as increased investments for smart cities globally and modernization of aging power infrastructure will further result in for double-digit growth in global market over the forecast period.
A smart grid is an electrical grid that includes a variety of operation and energy measures including smart meters, smart appliances, renewable energy resources, and energy-efficient resources. Electronic power conditioning and control of the production and distribution of electricity are important aspects of the smart grid. The report covers all the major trends and drivers playing a vital role in the growth of the global Smart Grid Market. The global Smart Grid Market has been segmented based on region, component, and end-users.
Smart Grid Market Summary
| Metrics | Details |
| Market CAGR | 19% |
| Segments Covered | By Component, By End-Users and By Region |
| Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, and Other key insights. |
| Fastest Growing Region | Asia Pacific |
| Largest Market Share | North America |
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Market Growth and Trends
The global Smart Grid Market growth is primarily driven by increasing demand for electricity and needs to improve efficiency in energy conservation and consumption. The rising concerns over environmental damage from fossil-fired power stations have led to a desire to use large amounts of renewable energy. Dominant forms such as wind power and solar power are highly variable, resulting in rising in adoption or shift to more sophisticated smart grid systems from traditional power systems. The smart grid makes use of technologies such as state estimation, that improve fault detection and allow self-healing of the network without the intervention of technicians. This will ensure a more reliable supply of electricity and reduce vulnerability to natural disasters or attacks.
In addition, one of the key drivers of increasing global electricity demand is urbanization, coupled with a rise in investments in digital electricity infrastructure are also some of the crucial factors that drive the market growth. Moreover, with growing awareness about ‘smart everything,’ the smart cities concept has also been gathering increasing attention, especially in developing countries like China and India, which is essentially a result of all the intermediary technologies. For instance, on 7 September 2019, the 10,000-acre Aurangabad Industrial City (AURIC) in Aurangabad, Maharashtra was inaugurated as the first greenfield industrial smart city of India.
Therefore, growing awareness about the benefits of smart grid technology such as reduced energy consumption and money savings for the end-users coupled with rapid urbanization will further boost the market over the forecast period.
Market Segmentation Analysis
Based on components, the global Smart Grid Market can be classified into software (Advanced Metering Infrastructure (AMI), Smart Grid Distribution Management, and others), Hardware (AMI meter, Sensors, and others), and Services (Consulting, support & maintenance, and others). In 2018, the software and services segment accounted for more than 70% of the overall market share and is expected to remain dominant during the forecast period. The growth of this segment is mainly attributed to cost savings on overall electricity bills and an increase in need to shift from conventional energy sources to sustainable and renewable energy resources. In addition, the growing concerns regarding security and data privacy are also the major factor that drives the growth of this segment.
Based on end-users, the global Smart Grid Market can be classified into Residential and Non-residential. In 2018, Non-residential accounted for the major share in the market. With the growing demand for uninterrupted, efficient, and reliable electricity source for various commercial purposes. Therefore, it is expected to fuel significant growth in the global smart grid market over the forecast period.
Market Geographical Share
By geography, the global Smart Grid Market is segmented into North America, Asia-Pacific (APAC), Europe, South America, and the Middle East and Africa (MEA). In 2018, North America accounted for the majority share in the market. The government has been actively involved with the energy efficiency and management standards for the residential sector, while the public and investor-owned utilities are also considering reducing the energy cost and consumption as a major priority factor in their management strategies.
In addition, rapid infrastructural development in the region will play a pivotal role in the growth of the global smart grid market. For instance, In Mexico, the government plans to open SEZ across the country to promote economic growth in the region which will further increase the demand for smart grid. The government expects to attract investments from various sectors, including processing, agribusiness, oil and gas, manufacturing, technological innovation and development, and logistics during the forecast period. Accordingly, the government has identified 95 potential projects with investments worth more than US$5 billion that could be developed in these SEZs by 2020.
APAC is expected to post higher CAGR over the forecast period. The growth in the industry is mainly due to rapid industrialization, highly flourishing residential and commercial building sectors, and growing middle-class population and spending power coupled with rising awareness for smart grid, which leads to the increasing demand for technology in the region.
Market Companies
Global Smart Grid Market is moderately fragmented with the presence of global and regional players in the market. The market players in the Smart Grid Market are focusing on expanding through strategic interventions, such as acquisitions, and collaborations in the Smart Grid Market.
Some major players in the market are ABB Group, Cisco Systems, Inc., General Electric Company, Honeywell International, IBM Corporation, Schneider Electric SE, Siemens AG, eSmart Systems, Eaton Corporation, S&C Electric Company, and among others.
In 2018, GE Power Grid Solutions, along with Tata Power Delhi Distribution (Tata Power-DDL), announced it had launched Advanced Distribution Management System (ADMS) to modernize and enhance the area’s grid.
In 2017, ABB India restored and modernized the critical 1,035 MW Sharavathi hydropower plant in Karnataka, which approximately accounts for 25 percent of the state utility Karnataka Power Corporation’s power generation. The India Smart Grid Foundation (ISGF) Innovation Award, one of India’s most prestigious ones, recognized ABB India’s efforts by awarding the “Smart Technology of the Year 2016” to this project.
In 2017, Siemens announced a partnership to connect 20,000 homes and distributed energy resources (DERs) into a smart grid in the Netherlands city of Rotterdam. The project is being undertaken over the next three years by the city, the Dutch grid operator Stedin, and Dutch energy service provider Lyv Smart Lyving.
