Smart Grid Market - Forecasts from 2022 to 2027

Smart Grid Market - Forecasts from 2022 to 2027

The smart grid market is projected to witness a compound annual growth rate of 13.33% to reach US$68,793.878 million by 2027, from US$28,647.530 million in 2020. The smart grid is an electricity supply network that uses digital communications technology to detect, and react to local changes in usage and enable the self-healing of the network automatically after the disturbance of the power.

Smart grid provides efficient and reliable power supply through various smart grid applications and technologies, thus offering the opportunity for the economy and the environment. Due to the increase in the deployment of smart grid technologies across the globe, the advanced metering infrastructure is expected to witness significant growth during the forecasted period. The governments of both underdeveloped and emerging countries are recognizing smart grid technology as the strategic infrastructural investment which will aid in their long-term economic prosperity and thus will help them achieve the carbon emission targets. These factors are expected to boost market growth and provide opportunities for smart grid companies in the forecasted period.

The smart grid market is expected to expand due to the increased investment in the market, and deployment of the technologies such as smart meters, EV chargers, and other infrastructure technologies which are expected to boost the market growth of the smart grid market during the forecasted period. However, the low accessibility to electricity especially in underdeveloped nations and the poor regulations and initiatives to modernize and expand the grid infrastructure by the government are limiting the growth of the smart grid market.

Market Drivers

The smart grids market is primarily driven by the regulatory pressure for reducing carbon emissions, the increasing electricity demand, and adoption of the renewable generation to improve efficiency in energy conservation and consumption. Further, the rise in the population, industrialization, rising concern over the environment due to fossil power stations and urbanization is pressurizing the government to plan regulatory standards regarding carbon emission. The rise in awareness regarding the benefits of the smart grid technology like reduced energy consumption and money saving for the end-users such as residential, commercial, and industrial.

The favourable policies and fiscal incentives are driving the smart grid market. There has been a rise in the number of electric vehicles which is providing an opportunity for the expansion of the smart grid market. Besides, the large-scale deployment of the smart grid and utility companies focusing on improving distribution efficiency is supplementing the growth of the smart grid market. For instance, on 7 September 2019, the 10,000-acre Aurangabad Industrial City (AURIC) in Aurangabad, Maharashtra was inaugurated as the first greenfield industrial smart city in India. The high initial investment for the technology solutions deployment and the smart grid security is challenging the growth of the smart grid market in the forecasted period.

Segment Analysis

The smart grid market is segmented by software such as Advanced Metering Infrastructure, Smart Grid Distribution Management, Smart Grid Network Management, Grid Asset Management, Substation Automation, Smart Grid Security, and others.

By hardware, the market is segmented into Sensors, Programmable Logic Controllers, Smart Meters, and Networking Hardware.

The smart grid market is segmented by service into Consulting, Deployment and Integration, and Support and Maintenance.

Software is accounted for a significant market share. Advanced metering infrastructure is to witness significant growth due to the increase in the efforts to modernize the electricity grid and reduce the T&D loss and the increase in the investments in advanced metering infrastructure by the government.

The smart grids market as the region is segmented into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific regions. North America is expected to hold the largest market share and dominate the market during the forecasted period. This is mainly due to the significant growth and implementations of technological advancement including in the areas of smart grid distribution management, distribution automation, and advanced metering infrastructure. The increasing investment in the smart grid and smart city projects and the rising requirement for better smart grid mechanisms are driving the smart grids market in the region. Also, the government has mandated various policies and the emergence of electric vehicles which is driving the market of smart grids. The Asia Pacific is exhibiting the highest growth rate during the forecasted period on account of the adoption of renewable energy in the regions, especially in remote and rural communities.

COVID-19 Impact On Smart Grid Market

The outbreak of the Covid-19 pandemic has impacted every industry including Smart Grid Market. The lockdown across the globe in 2020 and continued restrictions in 2021 have disrupted production activities across the globe, this is mainly due to the disrupted supply of components and equipment by the suppliers of Asian countries. However, the demand for smart systems is expected to rise to manage the grid operations to reduce the interventions by the consumers.

Market Segmentation:

By Component

Software
Advanced Metering Infrastructure
Smart Grid Distribution Management
Smart Grid Network Management
Grid Asset Management
Substation Automation
Smart Grid Security
Others
Hardware
Sensors
Programmable Logic Controller
Smart Meter
Networking Hardware

By Service

Consulting
Deployment and Integration
Support and Maintenance

By Geography

North America
USA
Canada
Mexico
South America
Brazil
Argentina
Others
Europe
Germany
Spain
United Kingdom
France
Others
Middle East and Africa
Saudi Arabia
South Africa
Others
Asia Pacific
China
Japan
Australia
India
Others