A smart grid provides a comparatively more secure and reliable electrical service, making it superior to conventional grids in terms of efficiency and control. The seamless communication system and distributed communication and computing in the power grid offered by smart grid technology has encouraged the growth of the global smart grid market. In addition, the increased efficiency acquired through optimization of the grid is expected to boost the demand for smart grids across the globe. As per a research study presented by Transparency Market Research, the global smart grid market is expected to grow from US$37.7 bn in 2012 and reach a value of US$118.1 bn by the end of 2019. The market is expected to register a notable 18.20% CAGR between 2013 and 2019.
In this blog, TMR offers answers to several vital questions related to the growth prospects, latest trends, and opportunities in the global smart grid market.
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Which regions will lead to most promising returns on investment?
As per the TMR research study, Asia Pacific is expected to be the most lucrative region for smart grid market players. The increased consumption of electricity in these regions and the high rate of urbanization are the key factors boosting the demand for smart grids in Asia Pacific. The need to introduce alternative measures to save and generate electricity in Japan, China, and India is supplementing the growth of the market.
What are the challenges faced by the key players in developed as well as developing economies?
One of the key barriers faced by the key players operating in the global smart grid market is the lack of proper standards for implementation of a new technology. The lack of these standards is expected to increase the probability of placing a commercial risk on customers and utilities and create complexity in technology selection. Furthermore, in developing regions, poor power distribution is considered as one of the primary factors impeding the global smart grid market. Despite a dynamic economy, several emerging nations are facing this problem, which needs high attention of respective governments. These factors are projected to restrict the growth of the global smart grid market in the coming years.
What factors are expected to change the dynamics of the global smart grid market?
The introduction of flexible and favorable regulations is one of the key factors expected to augment the growth of the global smart grid market in the coming years. The high level of quality and security of power supply offered by the implementation of smart grid technology is also expected to boost the demand for smart grids across the globe. The concept of smart city introduced by several emerging nations has been encouraging the use of smart grids, thus fuelling the growth of the global market.
In addition, prepayment of electricity is expected to create a promising market for smart grid in the coming years. Furthermore, the emergence of ERIGrid project to develop an effective smart grid system that can manage substantial inflow of renewable energy is expected to drive the global market. In addition, the U.S. Department of Energy Office of Electricity and Energy Reliability along with GridWise Alliance are developing industry-driven vision of the future smart grid with a view of developing a balance between demand and supply with ever rising energy demand.
Furthermore, governments across the globe are focusing on the use of more renewable energy sources. However, supply of renewable power, such as hydro, solar, and wind can be unreliable, thus making it challenging for grid operators to integrate them into the systems. This scenario warrants the need for microgirds, which can effectively integrate renewables into the smart grid, creating lucrative opportunities for key players.
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