Although the market for smart grid technologies is already established, representing more than $33 billion in revenue in 2012, it has grown with little contribution from a number of countries with populations greater than 100 million, and with almost no activity in Africa, with its population of 1 billion. This suggests that the market is likely to continue robust growth for the foreseeable future. According to a recent report from Navigant Research, the market for smart grid technologies will reach $73 billion in annual revenue by the end of 2020, totaling $461 billion in cumulative revenue from 2013 to 2020.
“Smart grid technologies improve the reliability and efficiency of the power grid via the application of modern IT capabilities alongside or in place of existing utility assets and networks,” says Bob Lockhart, research director with Navigant Research. “However, the term ‘smart grid’ has been overused to the point of losing its meaning. A more precise definition includes five key applications: transmission upgrades, substation automation, distribution automation, smart grid information and operations technology, and smart metering.”
Of these five, by far the most capital-intensive application is transmission upgrades, which require substantial infrastructure investments. Transmissions upgrades will represent nearly $250 million in revenue from 2013 to 2020, or more than half the total for the overall smart grid technology market, the study concludes.