• A report from Pike Research forecasts that worldwide revenue from smart grid infrastructure (that’s primarily what will need to be invested on the energy providers’ side) will grow from $10bn in 2009 to reach a peak of $35bn in 2013. Overall the market will attract $200bn in investment between 2008 and 2015.
The chart below shows the company’s projections of where the money is going and the report points out that although much of the market attention has been on metering infrastructure, this is a relatively small part. Grid automation initiatives will capture 84% of investment through 2015, compared with just 14% for advanced metering infrastructure (AMI) and 2% for electric vehicle management systems.
The report also makes the very pertinent point that ultimately the success of smart grids is dependent on consumer behaviour, government policies, financial stability of utilities and energy suppliers, cooperation between industries and also between technologies. On the other hand, there are also a lot of momentum behind the initiatives.
The motivators cited include: improved reliability and security, improving operating efficiencies, balancing power generation supply and demand and reducing the environmental impact. What’s holding things back is a lack of common vision and standards, inadequate business and regulatory models and lack of public awareness and acceptance.
• A report from Zpryme takes a broader view of the market and provides more detail of the ICT element. It predicts an overall smart grid market growing from $69.3bn in 2009 to $171.4bn in 2014, a compound growth rate of 14%. The US market is expected to grow from $21.4bn in 2009 to $42.8bn in 2014 (14.9% growth rate).
It concludes that in 2014, 89% of the market ($152.3bn) will be comprised of devices, hardware, software and communications equipment. These are the products needed for the infrastructure and communication systems which will build, link, monitor, manage and secure the smart grid. IT hardware and software and integrated communications are expected to be worth $66.8bn in 2014, that’s a compound growth rate of over 21% between 2009 and 2014.
Given the investment going into the market around the world, the report makes the point that hardware and software company with the resources and a flexible knowledge base should explore product opportunities in the smart grid sector. Can’t argue with that!
So it’s hard to be precise about what the smart grid market is, let alone how big it is and how fast it’s growing. But it’s fair to assume, based on the above reports (and I see no reason to doubt it), that the ICT element in smart grid implementation is growing at an annual rate of 20% plus, and likely to continue at that rate for five years or more.
That makes it a very attractive market for any ICT company coming out of a recession and one that few should ignore. Even if there seems like no opportunities now, looking at the long term implications of smart device infrastructure and communications opens up endless possibilities for the future, which need to be investigated by any enterprising ICT company. It’s certainly the best long-term green ICT market, as many of the large players have realised. Those with relevant specialist experience in the market, such as Logica, will reap the benefits.