Smart grid is a highly intelligent automated energy distribution network equipped with advanced ICT solutions, enabling two-way communication between different components involved in generation, transmission, and distribution of energy. MarketsandMarkets expects the global smart grid market to grow from USD 19.8 million in 2016 to USD 65.4 million by 2021, at a Compound Annual Growth Rate (CAGR) of 27.0%.
The smart grid market by software is segmented into advanced metering infrastructure, smart grid distribution management, smart grid communication, grid asset management, geographic information system, and billing & customer information system. The smart grid distribution management is estimated to have the highest growth rate during the forecast period. The smart grid distribution management helps the utilities in providing consistent, safe, and proficient power by providing advanced analytics, monitoring, training, and optimization by integrating OMS (Outage Management System), EMS (Energy Management System), DMS (Distribution Management System), DRM (Demand Response Management), and SCADA (Supervisory Control and Data Acquisition). The major growth drivers identified for the smart grid distribution management market are rising smart grid technology market, increasing adoption of distributed renewable generation, and regulatory pressure for reducing carbon emission. Globally, the market is witnessing substantial investments in R&D and marketing channels.
As the demand for additional solutions and systems continues to increase due to the technological advancements in the smart grid market, the need for well-designed, efficient, and reliable services becomes increasingly vital. The efficient delivery of services improves system reliability and operational efficiency and saves costs. The services segment is further classified into consulting, deployment & integration, and support & maintenance services. These services are responsible for the smooth functioning of the entire process, while reducing costs and driving inefficiencies and maintaining their operational environment for end users. The deployment and integration service is expected to hold the largest market share during the forecast period. Integration services in the energy market are aimed at streamlining the business applications by integrating various modules of the utility smart grid operations.
Asia-Pacific (APAC) is the fastest growing region for the smart grid market during the forecast period of 2016–2021. The State Grid Corporation of China has planned to invest USD 250 billion for up-gradation of their existing electrical infrastructure. Of this, USD 45 billion would be invested for the smart grid technologies. The major growth driver for smart grid in APAC is the upcoming smart cities projects in the region. Apart from this, other densely populated countries, such as India, Singapore, and South Korea, are also rapidly implementing smart grid technologies.
