Smart Grid Market Set for Explosive Growth in Next Decade

Recent studies show that smart grid technology is set to take off in the next few years. As a result, the way that utilities operate will change dramatically and cause the emergence of a new IT market.

A 2013 report by GTM Research concludes that the global smart grid market will exceed $400 billion by 2020, a CAGR of eight percent. This is an aggregate total covering all things smart grid. A study with a narrower scope conducted by Navigant Research shows that a significant portion of this spending will be on IT systems. From 2014 through 2022, the total amount spent on smart grid IT systems will be $139.3 billion.

Different markets have their own set of priorities; in the Asian-Pacific market, distribution automation is a higher priority, while in the North American market, analytics are more important. Regardless of the priorities, the different global markets share many points of emphasis in common.

Advanced metering infrastructure (AMI) allows two-way communications between the resident’s meter and the utility company. Legacy metering systems only track total usage. An AMI system would allow for more sophistication, such as a tiered pricing structure that charges higher rates for usage at peak times. The advice utilities often give to wait until after 8 PM to use appliances is now more than a suggestion.

Analytics collect data on consumer and business usage along with grid operations. This information allows providers to adjust distribution as needed. Network operations software gives a ‘big picture’ view of what’s going on in the system. Managing outages, demand and energy are among its key functions. Software will also provide security and ensure regulatory compliance.

You can add the growth of the smart grid to death and taxes on the list of life’s inevitable events. The future growth of the market is simply too large to dismiss. Smart grid technology allows for a more dynamic and efficient distribution of energy as opposed to ‘dumb’ systems that distribute power without regard to such factors. Consumers will have to take heed of utility providers’ advisories or literally pay the consequences if they don’t.