Rise in Demand for Energy Efficient Products Driving the Growth of Smart Grid Market.
New York, NY -- (SBWIRE) -- 10/11/2021 -- The Smart Grid Marke t size is set to grow at a CAGR of 10.2% and to reach $86.9 billion during the period 2021-2026. The growing demand for power is the need of the hour. There is an increasing demand for reliable and continuous power supply with the rise of electric and hybrid vehicles, and this is especially an area of concern in developing and emerging economies of the world. The need to reduce transmission and distribution losses is also a point that needs to be addressed urgently. A smart grid is capable of addressing the aforementioned issues and essentially has the ability to modernize the power grid. One of the major factors driving the growth of the smart grid market is the resulting increase in efficiency and optimization that can be achieved with the use of this technology. Favorable government regulations and policies is another factor attributing to the growth of this market. Smart grid technologies play a major role in helping with greenhouse gas emission control and also increase the strength of critical infrastructure to be able to better withstand the effects of climatic change. Recent technological advancements such as substation automation and network architecture focusing on improved carbon footprint that are fueling the concept of Internet-of-Things and Smart Cities, to name a few, are also impacting the smart grid technology market as smart energy is one of the main components of a smart city.
Smart Grid Market Segment Analysis- By Type
DC Smart Grids hold a major share in the Smart Grid market globally at 66% share in 2020. They find application in high-power electrical equipment and in machinery used in industries, buildings and transportation. Many distributed energy resources such as stationary batteries and fuel cells are dependent upon direct DC Smart Grid. Further, DC Smart Grids offer major advantages over AC Smart Grids such as lower costs, higher reliability, and better stability. DC Smart Grids also reduce energy dissipation and facility costs resulting from AC-to-DC conversion. Thus, many end users prefer DC Smart Grids over AC Smart Grids. The Smart Grid market is being driven by deployment of improved distributed energy resources (DER) technologies such as micro turbines, combustion turbines, hydrogen electrolyzers, synchronous generators, hybrid systems, wind systems and other distributed generation technologies. These technologies, when integrated with Smart Grid, can reduce the carbon footprint significantly as compared to conventional grid. Additionally, the evolution of IoT-based platforms are also increasing the capabilities of Smart Grid systems. IoT-enabled Smart Grids are convenient for utilities to track energy consumption in real-time. Demand response application is another factor accelerating the demand for Smart Grids especially isolated Smart Grids. The global AC Smart Grid market is expected to grow with a CAGR of more than 10.5% during 2021-2026, due to an increase in government initiatives aimed at achieving optimum energy utilization.
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Smart Grid Market Segment Analysis- - By End Users
By End Users the market is segmented into Residential, Commercial, Industrial (Water and Wastewater, Chemical, Oil and Gas, Food and Beverages, Semiconductor and Electronics, Medical and Pharmaceutical, Power and Energy, Metal and Mining, Paper and Pulp, Others. Industrial sector is witnessing a significant growth in a market and estimated to reach 5.2 Billion, growing at a CAGR of 6.9%. The growth is attributed due to the surge of various industrial verticals such as water and waste water, chemicals, Oil and Gas and others. According to Federal Ministry for the Environment, Nature Conservation and Nuclear Safety more than 96 percent of German population is connected to the public sewage system and 10.07 billion cubic meter of waste water were collected and treated in public sewage treatment facilities in 2020. The public sewage system covers 540,723 kilometres of sewers and discharged into 10,000 waste water treatment facilities. Water meters measures liquid all phases including sludge by-products, large volumes of fluid carrying suspended solids. In March 2020, Rotterdam (city in Netherland) Integrated Food Projects that are going on in progress that is helping to create carbon-neutral manufacturing factory. Integrated Food Projects are working with London-based drinks manufacturers with an investment of $250 million approx. These manufacturing of factory in Rotterdam is highly using water and heat meter for production of chilled juice drinks by manufacturing 400 million bottles of drinks per year as they are used in many applications such as carbonation, leak detection, tank blanketing, dryer air and others.
Smart Grid Market Segment Analysis- By Geography
Global Smart Grid Market is dominated by North America with a market share 35.2% in 2020. Growing interest towards unconventional reserves accompanied with technological advancements leading to the higher well production rates are driving the growth of oil and gas in U.S. The growth of oil and gas industry has poised the growth of water and Heat meters. In 2019, McDermott International, Inc announced that it had been awarded a USD 1.5 billion contract by Saudi Aramco for its Marjan Field. The contract for engineering, acquisition, construction, and installation (EPCI) covers the production of offshore and pipeline oil and gas installations. Such developments leverages a positive impact on the market growth. In 2019, Canadian Utilities Limited entered into a partnership with Quanta Services, Inc. for the Fort McMurray West 500-kV Transmission Project valued at $1.6 billion, hence creating more opportunities for water and heat meters, them being essential for measuring the thermal energy of source and sink in this vertical.
Smart Grid Market Drivers
Deployment of Smart Grid for rural electrification
Smart Grid is emerging as a viable option for rural electrification. Smart Grid not only ensures installation of power set up much faster but also ensures lower energy costs as compared to conventional grids. Thus, Smart Grids also provide electricity to rural areas at economical prices. According to the International Energy Agency (IEA), nearly 240 million Indians lacked access to electricity in 2019. Thus electrification is highly required which furthers accounts for growth of the Smart Grid system.
Rise in demand for energy efficient products:
Smart Grid manufacturers are increasingly producing energy-efficient products to reduce carbon footprint and enable energy savings for the consumers. The rise of energy-efficient appliances can be attributed to the stringent government regulations on electric home appliances and advances in technology. The U.S. Department of energy, mandated the industry manufacturers to use new technologies for the development of energy efficient meters which were rated based on thermal efficiency and standby losses. As energy efficient appliances are designed to utilize minimum energy. More than 80 countries have set standards and labels for energy efficient appliances. For instance, in the USA, an ENERGY STAR certified water meter saves $3500 over its lifetime. With BEE's Standards and Labelling Program having included Smart Grid technologies as a mandatory appliance, manufacturers produce more energy-efficient products, in turn reducing energy costs and improving demand for the smart grid. Hence rise in demand for energy efficient products will drive the market demand in the forecast period 2021-2026.
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Smart Grid Market Challenges
High Initial Investment:
Implementation of Smart Grid solutions in factories is a part of automation process. Adoption of automation machines can be one of the most cost intensive process and requires high capital input. In addition to the initial costs, there are several unpredictable costs which may exceed the real cost saved by the accomplishing automation in the company. Some of these costs involve research and development costs of automating a process, anticipatory repairs, and maintenance costs. Additionally, there is also training cost associated with smart grid operation that further restraints the market growth. Most of the smart grid solutions also occupy larger space which is a major challenge in small sized industries. The high cost of installation of smart grid further discourage the application in residential projects and small scale commercial buildings.
Smart Grid Market Landscape
Partnerships and acquisitions along with product development and up gradation are key strategies adopted by players in the Smart Grid market. In 2020, the Smart Grid market remained fragmented with the top five players accounting for 40% of the share. Major players in the Smart Grid market include ABB Ltd., Eaton Corporation PLC, General Electric Co., Siemens AG, Exelon Corporation and others. These major players have been actively globalizing their presence through partnerships and strategic acquisitions of local and regional players, which is aiding their expansion into emerging markets.
In July 2019, Arensis partnered with Schneider Electric and developed a Smart Grid pilot program. As part of the program, the companies will develop a blockchain Application Programming Interface (API) platform to enable off grid project financing and sale of renewable energy to remote areas globally.
In January 2019, Siemens announced plans to acquire Russelectric, in a bid to strengthen its position in the Smart Grid market.
The Smart Grid market is poised to grow at a rapid pace owing to a wide range of applications in the utilities and healthcare sectors.
The major players in the Smart Grid market include ABB Ltd., Eaton Corporation PLC, General Electric, Siemens AG, Exelon Corporation and others.
APAC region has been widely adopting Smart Grid systems, especially for rural electrification which is further driven by governmental plans. Apart from that, developed countries in the APAC region such as China, Singapore and Malaysia also deploy Smart Grid for energy security purpose.
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