Smart grid spending could reach US$46bn by 2015

12 Jul 2010

Drivers such as climate change standards, “antiquated” energy utility infrastructure and demand for renewable energy forms will force smart grid upgrades, a forecast suggests.

A new market forecast by ABI Research – Smart Grid Applications: Smart Meters, Demand Response, and Distributed Generation – is predicting that global smart grid spending over the next five years will veer towards US$46bn, with almost US$41bn being devoted to upgrades for outdated transmission and distribution infrastructure.

The study, which provides the outlook for smart meter installations, as well as the spending associated with them, covers the market for smart grid equipment and services for the 2010-2015 period, covering North America, Europe, the Asia-Pacific region, and other countries.

It says climate change standards and renewable energy mandates are among the key drivers that are forcing utilities to upgrade their infrastructure to incorporate cleaner energy sources.

Larry Fisher, research director of NextGen, the ABI Research unit, said: “Most of the electric utility infrastructure deployed in the industrialised world was built between 60 and 80 years ago. Much of this infrastructure is outdated, and with the continuing increase in demand for power year after year, the grid cannot safely and reliably manage the loads of today and tomorrow without significant upgrades.”

Preparing for cleaner energy

The report says utilities are having to install more accurate measurement, monitoring, control and analysis equipment to ensure these energy sources can be properly and reliably integrated into the grid.

According to the study, transmission and distribution (T&D) investments will account for the lion’s share of smart grid investments through 2015.

“On a cumulative basis, a total of almost US$41bn will be invested globally in the electrical T&D infrastructure through 2015, compared to $4.8bn for the purchase and installation of smart meters. This infrastructure spending will focus on grid automation and control, distribution automation, distributed generation and demand response programmes, added Fisher.

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Carmel Doyle was a long-time reporter with Silicon Republic