Governments, industry bodies, and electric utilities around the world are coming together with newfound urgency – spurred in some regions by copious amounts of economic stimulus funds – to stimulate the development of the smart grid. These initiatives are designed to improve the reliability of the electrical grid, reduce costs through increased operating efficiencies for utilities, and prepare the grid for the integration of renewable energy and electric vehicles.
According to a recent report from Pike Research, these efforts will lead to a dramatic increase in worldwide smart grid capital spending, from $10.5 billion in 2009 to a high point of $35.8 billion in 2013. However, after the initial government and industry push of the next several years begins to taper off, the Smart Grid market will decline in size, though the cleantech market intelligence firm anticipates that it will remain a robust business for years to come.
“What we now call ‘Smart Grid’ has actually been a substantial global utility automation industry for years,” says senior analyst Bob Gohn. “The current surge in smart grid activity has been primarily driven by government initiatives, and naturally this adrenaline boost will wear off in the next few years. We forecast that the Smart Grid market will decline at an average rate of 6% per year after 2013, but it will still be a huge business compared to what we have seen in the past.”
Gohn adds that the rates of change in market value will vary significantly by world region. For example, the North American market will decline at a rate of only 1% per year after its peak in 2013, largely due to the fact that there is more aging grid infrastructure to be replaced after many years of underinvestment. In addition, the Smart Grid market in Europe will not peak until 2014, and the subsequent decline will be slower than in other parts of the world.
Pike Research’s report, Smart Grid Technologies, analyzes the global market opportunity for Smart Grid technologies and applications. The report examines utility business models, regulatory factors, technology issues, and the dynamics of end-user demand. It includes profiles and analysis of 70 key players in the rapidly evolving Smart Grid industry ecosystem, as well as detailed global market forecasts through 2015, segmented by region and application.