Smart Grid Market Assessment, By Network Area [Home Area Network, Neighborhood Area Network, Wide Area Network, and Long-Range Wide Area Network], By Components [Hardware, Software, Services], By Applications [Distribution Automation, Conservation Voltage Reduction, Substation Automation, and Advanced Metering Infrastructure, Others], By Region, Opportunities, and Forecast, 2016-2030F

The Smart Grid market has experienced significant growth in recent years and is expected to maintain a strong growth trajectory in the coming years. Valued at USD 52.19 billion in 2022, the market is projected to reach USD 218.58 billion by 2030, reflecting a notable CAGR of 19.61% during the forecasted period from 2023 to 2030. The market is expected to experience growth due to the rising investments in the industry and the implementation of advanced technologies like smart meters, electric vehicle chargers, and other infrastructure advancements. These technological developments are projected to propel the expansion of the market in the upcoming years. Moreover, the demand for smart grids is rapidly increasing due to factors such as growing energy demand, renewable energy integration, grid modernization initiatives, grid resilience, etc. 

Many power grids around the world are outdated and face challenges due to aging infrastructure. Components such as transformers, substations, and power lines may need replacement or upgrades. Modernization initiatives help address these infrastructure issues by incorporating advanced technologies and more efficient equipment. One of the most prominent examples of a modernization initiative is Schneider Electric SE’s EcoStruxure Advanced Distribution Management System (ADMS). Schneider Electric SE's EcoStruxure ADMS offers a comprehensive network management solution that encompasses monitoring, analysis, control, optimization, planning, and training tools. It operates on a unified representation of the entire electric distribution network. By merging Distribution Management Systems (DMS), Outage Management Systems (OMS), and Supervisory Control and Data Acquisition (SCADA) functionalities, EcoStruxure ADMS combines over 50 advanced functions. This integration enables the maximization of benefits derived from intelligent grid devices, distributed renewable energy sources, advanced metering, and other smart grid components.

The Advent of Highly Advanced Smart Grid Technologies

The emergence of highly advanced smart grid technologies has revolutionized the energy sector. These cutting-edge technologies have significantly enhanced the capabilities of traditional power grids, enabling more efficient, reliable, and sustainable energy distribution. One of the most prominent examples of highly advanced smart grid technology is the implementation of Advanced Metering Infrastructure (AMI). AMI is mostly attributed to residential customers, and it consists of meters that measure and document electricity consumption at intervals of at least one hour. These meters supply the collected data to both the utility company and the customer daily. The range of AMI installations varies, starting from basic meters that record energy usage at hourly intervals, up to advanced meters with built-in two-way communication capabilities. These sophisticated meters could capture and transmit real-time data instantly. Moreover, the United States is regarded as the 2^nd largest electricity producer in the world. As per the United States Energy Information Administration, in 2021, electric utilities in the United States had approximately 111 million installations of advanced metering infrastructure (AMI), representing around 69% of all electric meter installations. Most of these AMI installations, around 88%, were attributed to residential customers. Additionally, AMI meters accounted for approximately 69% of all residential electric meters. Hence it can be stated that the advent of highly advanced smart grid technologies like AMI is amplifying the Smart Grid market growth rate extensively across the globe.

Continuous Development of Smart City Projects

As smart city projects expand, the demand for advanced energy management systems, including smart grids, grows significantly. The integration of multiple systems and the need for real-time data monitoring and analysis drive the adoption of smart grid solutions. Moreover, the essence of a smart city lies in harnessing real-time data to elevate the standards of living and foster a sustainable future. One of the most appropriate examples of smart city projects is Songdo International City in South Korea. Once a coastal area reclaimed from the Yellow Sea, Songdo has rapidly transformed into a smart city, earning the reputation as the "Smartest City in the World." The concept of a smart city revolves around utilizing real-time data to enhance the quality of life and sustainability. At the heart of the city's Central Business District lies the G-Tower, serving as the central control hub. Equipped with an extensive network of CCTV cameras, the G-Tower monitors various aspects such as traffic flow, building temperatures, emergency response coordination, etc.

Asia-Pacific Dominates the Global Market for Smart Grid

Asia-Pacific has been dominating the global smart grid market. The region has been at the forefront of smart grid deployments, with significant investments and initiatives in countries like China, Japan, India, and South Korea. Factors contributing to Asia-Pacific dominance include government initiatives, increased demand for energy efficiency, improved grid reliability, and integration of renewable energy sources. The high investments in research and development drive innovation and market growth, thereby making the Asia-Pacific region a frontrunner in the smart grid sector. Governments in countries like China, India, and Japan are heavily investing in modernizing their energy infrastructure, fostering smart grid adoption.

The Asia-Pacific region is expected to dominate the global smart grid market by 2030, with a market value reaching USD 65.84 billion by 2030, registering a CAGR of over 20.36% during the forecasted period. This is due to the larger population density in countries like China and India, strong government support for smart grid infrastructure integration, and the region's focus on renewable energy.

Government Initiatives

The government of several nations has played a crucial role in fostering the growth of the smart grid market. By recognizing the significance of modernizing the electricity infrastructure and promoting sustainable energy practices, governments have implemented various policies and initiatives to support the development and adoption of smart grid technologies. For instance, the National Smart Grid Mission was issued by the Indian government. The objective of the Indian power sector's transformation is to create a secure, sustainable, and digitally enabled ecosystem. This includes implementing smart grid technology to facilitate distributed generation, especially rooftop solar, through bidirectional energy flow and net metering. The smart grid enables real-time monitoring, grid automation, and active consumer participation, fostering reliable energy access, sustainable growth of renewable resources, and energy conservation. Moreover, it aligns with the mission of providing reliable and quality energy for all stakeholders while promoting a greener energy ecosystem.

Impact of COVID-19

The COVID-19 pandemic had a positive as well as a negative impact on the worldwide smart grid market. On one hand, it has accelerated the digitization of energy systems, emphasizing the importance of remote operations and reliable electricity supply, leading to increased interest and investment in smart grid technologies. On the other hand, the pandemic also caused delays in project deployments due to disrupted supply chains and construction activities. The crisis has highlighted the significance of resilient energy systems, with smart grids recognized as essential for ensuring grid stability and quick response to disruptions. Moreover, financial constraints resulting from the economic downturn have affected the ability of utilities and governments to invest in smart grid projects, leading to some market slowdowns. Changes in electricity consumption patterns during the pandemic posed challenges for demand response programs but also emphasized the importance of demand flexibility. Moreover, increased awareness of energy efficiency and the adoption of smart meters and energy management systems has driven interest in energy-saving measures and smart grid solutions. Overall, while the pandemic has presented obstacles, the need for resilient and efficient energy systems remains paramount, and as economies recover, the demand for smart grid technologies is expected to rebound, driven by the focus on grid resilience, energy efficiency, and remote monitoring capabilities.

Impact of the Russia-Ukraine War

The Russia-Ukraine war led to disruptions in energy supply, which in turn has highlighted the importance of energy diversification and resilient infrastructure, prompting countries and energy companies to consider investing more in smart grid technologies. Geopolitical uncertainty arising from the conflict-affected investment decisions and business confidence, potentially impacting the overall investment climate for smart grid projects. Moreover, energy security concerns have been amplified, particularly in Europe, emphasizing the need for advanced energy management systems like smart grids to enhance security by diversifying energy sources and improving integration capabilities. Furthermore, policy and regulatory changes resulting from the conflict also influenced the smart grid market as governments prioritized grid resilience and diversification.

Report Scope

"Global Smart Grid Market Assessment, Opportunities and Forecast, 2016-2030F" is a comprehensive report published by Markets and Data that presents a thorough analysis of the present status of the worldwide Smart Grid market. The report assesses the industry from both qualitative and quantitative perspectives, examining its dynamics, challenges, market size, segmental shares, growth trends, impact of the COVID-19, and Russia-Ukraine War. It also identifies potential opportunities and provides forecasts for the period spanning from 2023 to 2030. Furthermore, the report features profiles of key players in the industry, highlighting their market share, business models, competitive intelligence, and other valuable details.

In this report, Global Smart Grid Market has been segmented into the following categories: 

·         By Network Area

o   Home Area Network

o   Neighbourhood Area Network

o   Wide Area Network

o   Long Range Wide Area Network

o   Others

·         By Components

o   Hardware

§  Smart Sensors

§  Smart Power Meters

§  Super Conducting Cables

§  Integrated communications

§  Phasor Measurement Units

§  Others

o   Software

§  Smart Energy Management System

§  Demand response Programs

§  Distribution Management Systems

§  Outage Management Systems

·         By Application

o   Distribution Automation

o   Conservation Voltage Reduction

o   Substation Automation

o   Advanced Metering Infrastructure

o   Others

Key Players Landscape and Outlook

The global smart grid market is experiencing a rapid growth rate as companies from across the globe are focusing on the advancement of smart grid technologies through various collaboration projects. Moreover, the advent of Artificial Intelligence (AI) and IoT (Internet of Things) along with the investment of the companies in creating more resources for research and development, marketing efforts, and the expansion of distribution networks is aiding the market expansion rate extensively.

For Instance, in April 2023, Airtel established a strategic alliance with Secure Meters for the extensive rollout of 1.3 million smart grid solutions powered by Narrowband Internet of Things (NB-IoT) technology in Bihar. This collaboration underscores Airtel's dedication to elevating its infrastructure and services in the region. The deployment of NB-IoT-based smart meters represents a significant step towards improving metering efficiency and introducing cutting-edge technology to India energy sector. The partnership between Airtel and Secure Meters reflects a joint commitment to harness IoT technology for smarter and more effective energy management within the state.

For instance, in March 2023, Schneider Electric and Cisco, two of the most renowned global technology companies joined forces to construct Egypt's most advanced smart grid system. Leveraging their expertise in information technology and digital innovation, this collaboration aims to establish a highly efficient and cyber-protected network. This advanced infrastructure will incorporate cutting-edge technologies such as AI and the IoT to effectively manage and facilitate the integration of both conventional and renewable energy sources.

In January 2023, ABB strategically invested in OKTO Technologies with the objective of digitalizing the energy grid and prolonging the life of essential components. This investment underscores ABB's dedication to enhancing grid technologies via digital solutions. The partnership with Okto Grid is poised to introduce innovation to the energy sector by optimizing grid performance and extending the durability of crucial components. This investment aligns with ABB's overarching mission to play a part in the digital transformation of the energy industry.

For instance, in October 2022, IBM announced its role as the systems integrator for NV Energy's Advanced Service Delivery initiative, which encompasses smart grid technology, advanced meter infrastructure, and meter data management. NV Energy, a utility company that provides electricity and gas services to around 1.4 million customers in Nevada, is leading a significant initiative to deploy advanced smart grid technologies. This endeavour received support from the Department of Energy's USD 138 million stimulus grant. Moreover, IBM partnered with NV Energy to provide expertise in various areas, including grid systems integration, grid system architecture, business process, and business analytics, thereby amplifying the growth of smart grid market worldwide.

Key Players Operating in Global Smart Grid Market are:

·         Schneider Electric SE

·         General Electric Company (GE Grid Solutions)

·         Cisco Systems, Inc.

·         IBM Corporation

·         Siemens AG

·         Wipro Limited

·         Honeywell International, Inc.

·         Oracle Corporation

·         Itron, Inc

·         Hitachi Energy Ltd

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·         How are the markets divided into different product/service segments and the market size and growth of each segment?

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