The global smart grid market size was USD 40.61 billion in 2023. The market is projected to grow from USD 49.21 billion in 2024 to USD 203.92 billion by 2032 at a CAGR of 19.45% during the forecast period. Contact online >>
The global smart grid market size was USD 40.61 billion in 2023. The market is projected to grow from USD 49.21 billion in 2024 to USD 203.92 billion by 2032 at a CAGR of 19.45% during the forecast period.
Attributed to the COVID-19 pandemic, various industries and countries were left in economic turmoil. Many projects have been considerably disrupted owing to the shutdown of industrial facility chains, disturbance in supply chain analysis, and the unavailability of ample funds among customers.
Energy companies must continually develop production facilities in which complex and injury-prone business processes are automated, and control and decision-making are performed remotely. This requires social sanitation requirements in the current energy economy, which has become more complicated because of the COVID-19 crisis that has added concerns to the global energy crisis.
The substantial decline in smart meter installations in 2020 could be attributed to the economic downturn caused by COVID-19 pandemic. Moreover, the sharp recovery of the market in 2021 is a result of the investment and the economy recovery in many leading countries. In addition, investment in infrastructure increased in 2021 after the decline in 2020. The 2020 drop could be attributed to economic stagnation at the peak time of the COVID-19 pandemic, with post-pandemic investment recovery.
This type of grid can have millions or even billions of possible connections, from microgrid generators to smart meters. Storing such huge data sets comes with its own set of challenges. Some of them include dependence on Internet-based technology, such as the Internet of Things and smart grid-connected devices that can make power grids prone to hacking and cyber-attacks. This challenge became apparent in May 2021 when the Colonial Pipeline fell into the hands of hackers demanding a ransom, cutting off fuel from half of the U.S. East Coast.
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Several governments have made smart meters a central part of national energy policies. Most of them are designed to improve energy efficiency and reduce CO2 emissions. Some governments have required nationwide deployment (e.g., the U.K.). Some governments have also encouraged green technologies, including the introduction of smart meters, in the hope that they will create jobs and offset the global recession. With the support of smart meters, utility companies can reduce the amount of non-technical transmission and distribution losses (T&D) (electricity theft, billing errors, and others). In developing countries, protection offered by the smart meters can be a determining factor for its adoption as the loss of electricity due to theft is high.
On November 14th, 2023, the Biden-Harris administration announced that up to USD 3.9 billion is available for fiscal years 2024 and 2025 through the second round of the Grid Resilience and Innovation Partnerships (GRIP) funding opportunity. Successful projects use federal funding to maximize deployment for grid infrastructure at scale and leverage private sector and non-federal public capital to advance deployment goals.
On October 18th, 2023, the U.S. Department of Energy announced investments of up to USD 3.46 billion in 58 projects in 44 states under the GRIP (Grid Resilience and Innovation Partnerships) program to strengthen the resilience and reliability of the electric grid throughout America. This program includes 34 projects selected through Smart Grid Grants.
Smart grid infrastructure is essential in the transition to a low-carbon electricity grid that includes intermittent renewable energy production, such as solar, wind, and smaller DER grids. As more governments demand decarbonization of the energy sector, utilities are turning to the product to ensure net-zero targets.
For example, Canada, through the Department of Natural Resources, launched its Renewable Energy and Electrification Pathways (SREP), a four-year, USD 795 million program to support the deployment of smart grid technologies. The aim is to expand its range of renewable energy sources to reduce and modernize carbon dioxide emissions. The program enables the introduction of next-generation and smart goods. Canada''s natural resources minister, Seamus O''Regan Jr. commented on the development that the new SREP program will increase the renewable capacity of the country''s grid and improve its reliability and sustainability. This means a cleaner and more reliable electricity supply for Canadians. Moreover, Canada''s goal is to achieve net zero by 2050.
Based on end-user, the smart grid market is categorized into utility, industrial, residential, and commercial.
The utility segment is expected to dominate the market during the forecast period due to the global deployment of grid technologies. In addition, the governments of underdeveloped and emerging countries recognize these technologies as strategic infrastructural investments, which will help achieve the carbon emission targets. The growing population, industrialization, and rising concern over the environment due to fossil power stations push the governments to plan regulatory standards regarding carbon emissions.
Furthermore, the industrial segment is expected to grow significantly during the forecast period due to the government''s favorable policies and fiscal incentives. In addition, a rise in the number of electric vehicles positively enhances the growth of this sector.
The residential segment is estimated to grow due to the increase in awareness regarding the benefits of these technologies, including reduced energy consumption and money-saving across various end-users.
The commercial segment is expanding due to the growing demand for uninterrupted, efficient, and reliable electricity sources.
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Based on component, the market is classified into software, hardware, and services.
The software segment is expected to dominate the global smart grid market share during the forecast period, owing to the increase in the efforts to modernize the electricity grid and reduce T&D losses. In addition, an increase in investments by the government in advanced metering infrastructure (AMI) is expected to propel global smart grid market growth. For instance, in the U.S., the government passed the Energy Independence and Security Act of 2007 to develop and deploy smart grid technologies.
Furthermore, the hardware segment is expected to grow during the forecast period owing to the initiatives taken by the governments of various countries across the globe for the installation of smart electricity meters in their countries. For example, in December 2020, the Australian Energy Market Commission planned to install electricity meters in the country. It launched an independent review of electricity meter rules to discover new opportunities for boosting deployment.
The services segment provides applications, including installation and integration of various modules of utility smart grid operations. Hence, enterprises opt for these services to smooth the integration and deployment process and reduce costs.
The market has been analyzed geographically across five major regions: Asia Pacific, North America, Latin America, Europe, and the Middle East & Africa.
North America Smart Grid Market Size, 2023 (USD Billion)
North America held the leading share globally in 2023. U.S.’s economy, national security, and even the health and safety of citizens depend on a reliable supply of electricity. The U.S. electric grid is a technological marvel, with more than 9,200 electricity generating facilities over a million megawatts of producing capacity connected by more than 600,000 miles of transmission lines. The government is also supporting renewable energy projects with various initiatives and incentives due to the increased environmental concerns. U.S. is highly adopting clean energy which is anticipated to develop demand for smart grid solutions in order to integrate renewable sources with existing power grids.
Due to its size and rapid growth, Latin America is an important emerging market for these solutions. The region has a common need to improve technical and commercial energy losses and enhance service reliability and quality. This will help create these products and take advanced metering infrastructure and grid automation technologies to the spotlight.
The Middle East & Africa is estimated to grow notably in the coming years owing to the rising construction of smart cities in the countries such as the UAE and Saudi Arabia. Additionally, the GCC countries in the region are highly inclined towards accelerating digital economy and adopting smart technologies, which is expected to have a positive impact on the market.
Redesigning the electricity grid is necessary to meet the growing energy demands. Several government regulations and policies across developing countries positively enhance the expansion of grid infrastructure. In addition, to increase transmission capacity, a qualitative grid expansion is essential to deliver efficient and intelligent operations as compared to the existing infrastructure. As the growing investment in renewable energy capacity needs to be matched with the equivalent investment in grid capacity expansion, the industry participants emphasize expanding their grid infrastructure to enhance customer reach.
Siemens, a technology company focused on industry, infrastructure, transport, and healthcare, is one of the largest industrial manufacturing companies in Europe. In April 2021, the German multinational conglomerate announced the first high-voltage direct current (HVDC) link featuring voltage-sourced converter (VSC) technology in India. The 2,000 megawatts (MW) electricity transmission system consists of two links, Thrissur in Kerala and Pugalur in Tamil Nadu, supporting the Power Grid Corporation of India Ltd.
The market research report offers an in-depth analysis of the industry. It further provides details on the adoption of these technologies across several regions. Information on the growth of the market trends, drivers, opportunities, threats, and restraints of the market can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players, along with their strategies in the market.
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