Australia Smart Grid Market Assessment, By Network Area [Home Area Network, Neighborhood Area Network, Wide Area Network, Long Range Wide Area Network], By Components [Hardware, Software], By Application [Distribution Automation, Conservation Voltage Redu

Australia Smart Grid Market Assessment, By Network Area [Home Area Network, Neighborhood Area Network, Wide Area Network, Long Range Wide Area Network], By Components [Hardware, Software], By Application [Distribution Automation, Conservation Voltage Reduction, Substation Automation, Advanced Metering Infrastructure, Others], By Region, Opportunities and Forecast, 2017-2031F

Australia smart grid market is projected to witness a CAGR of 18.6% during the forecast period 2024-2031, growing from USD 0.9 billion in 2023 to USD 3.51 billion in 2031. Smart grids have become a preferred solution in Australia, owing to the rising cost of electricity, aging infrastructures, and increasing governmental pressures to close down coal-fired power stations. Households in the Northern Territory, Tasmania, and New South Wales are expected to experience a tragic rise in electricity bills where the Northern Territory is expecting to witness the highest average annual rise of USD 116 in households and USD 332 in small businesses.

Moreover, the market is driven by the integration of renewable energy and energy efficiency mandates. With substantial growth in distributed energy resources (DER) such as solar and wind, smart grid technologies contribute a major role in grid stability and optimizing energy efficiency. Moreover, by 2050, DERs are anticipated to account for up to 45% of Australia's overall electricity generation capacity. Further, the market is witnessing robust growth due to policy initiatives and investments in electric vehicle infrastructure. At clean energy state and local government level, the Australian Capital Territory (ACT) stands out as a leader, with proactive policies backing renewable energy adoption and electric vehicle integration.

With its commitment to sustainability and innovation in the field of energy management, Australia presents a bright future outlook for smart grid solutions, which shall be able to satisfy the increasing demand while at the same time guaranteeing efficient and reliable electricity delivery throughout the country.

Expanding Smart Grid Applications in Consumer Markets to Gauge as a Driving Factor

Increased participation in the consumer market is one of the major driving factors toward a transformative change in Australia smart grid market, owing to shift towards a more interactive and decentralized energy landscape. Consumers are no longer passive users of energy as they actively participate in the market, powered by innovative technologies such as electric vehicles, smart appliances, energy storage systems, and solar photovoltaics. Moreover, since several years, proactive governmental policies supporting EV adoption have led to the milestone achievement of over 20% of new vehicle sales being EVs by 2023 end.

Furthermore, the demand for smart grids is expanding in home settings. There is a clear demand for mini-grids that are capable of autonomous generation, storage, and distribution of energy, even after the grid faces disruptions and outrages. Furthermore, The Virtual Power Plants (VPP) trial schemes contribute toward residential energy assets in the market. Other than empowering individual landlords, the democratization of energy is expected to spur new economic models. These models encourage further integration into the grid by allowing renewable energy sources to run more efficiently and make the grid more resilient through their appreciation of active contribution of landlords and tenants.

Expansion of Renewable Energy Sources

In Australia, the growth of smart grid technologies is led by the rapid expansion of renewable energy sources and technological advancements in grids. As renewable capacity continue to soar, a growing requirement is witnessed for smart grid solutions that efficiently manage and integrate these variable energy sources into the grid. It offers more reliability, resiliency, and flexibility, which provides the utilities with the capability to further optimize energy distribution.

Over the years, the renewable sector in Australia has seen strong growth. In 2010, there was an installed capacity of 480 MW of utility-scale renewable generation in the National Electricity Market (NEM) of Australia. In 2023, the number of installations had increased to 19,000 MWs of utility-scale renewable generation. According to the estimates, by 2030, installed renewable generation is anticipated to reach 35,000 MW and account for more than half of utility-scale generation capacity. The rapid accelerating growth boldly underlines the need for smart grid technologies that can manage renewables such as solar and wind variability.

Government Initiatives Acting as a Catalyst of the Market Growth

Government initiatives for efficiency and sustainability in energy management strengthen the Australia smart grid market. Abundant renewable energy resources create a demand for smart grid technologies. For instance, there are several key projects in line with Smart Grid and Smart City pursuits to spread smart grid meters, demand response programs, and advanced grid automation systems throughout the country.

Moreover, the continuous strategic thrusts of the country toward grid decentralization and energy storage solutions further support the seamless integration of renewable energies. The approach provides grid stability and plays a vital role in the reduction of carbon emissions. The draft report by the government, entitled as Post 2025 Electricity Market Design, attempts to integrate smart grids and technologies, such as IoT and machine learning blockchain, expected to propel market growth in the forecast years.

Hardware Segment to Dominate the Australia Smart Grid Market Share

In 2023, the Australia smart grid market is characterized by a dominant hardware segment. The share depicts the critical role played by physical components in the deployment and effectiveness of smart grid systems. Hardware devices such as smart meters, advanced sensors, and communication infrastructure are fundamental to the operational efficiency and reliability of the grid. The emphasis on hardware can be attributed to the need for real-time data collection, correct monitoring, and integration of renewable energy sources.

Furthermore, growing demand for upgraded grid infrastructure that supports greater energy loads and improves the overall resilience of the grid, drives the investments in hardware. On the contrary, the software segment support and optimize the hardware components rather than leading the market, showcasing an upward growth in the forecast years.

Regional Variances in Australia Smart Grid Market

The Australia smart grid market spreads differently across its varied regions. In Western Australia (WEM), the focus lies on enhancing products and services tailored to meet the specific demands of the energy market, aiming to optimize efficiency and reliability. Whereas energy storage solutions have turned crucial in South Australia to maintain grid stability with the integration of more renewable energy sources. These projects indicate regional priorities within the broader smart grid landscape in Australia and articulate a more nuanced vision toward sustainability in managing energy and technology innovation that is specific to local needs and challenges. As these markets mature, stakeholders take advantage of regional insights to spur continued innovation of smart grid infrastructure toward a more resilient and sustainable future for energy.

Future Market Scenario (2024 – 2031F)

Mass adoption of EVs will drive the need for strong EV-charging infrastructure as a part of smart grids, promoting low-carbon transportation in a great way, and allowing further flexibility and grid management.

Advancements in battery storage will help in the integration of renewable energy resources, stability of grids, and development of microgrids. Advanced grid communications infrastructure will provide the channel for real-time data analytics, further improving the resilience of the grid.

AI and machine-learning algorithms will optimize grid operations, improve the capabilities of predictive maintenance, and assure enhanced energy efficiency across all the smart grid networks.

With the increased energy storage, micro-grids will become more dependent on renewable fuels rather than on fossil fuels.

Key Players Landscape and Outlook

Leading key players in the Australia Smart Grid market are driving growth through technological innovations and strategic initiatives. Companies are introducing path-breaking solutions toward better grid management in support of the ambitious energy transformation of the country. It underscores a pivotal shift toward efficiency, resilience, and sustainability in the smart grid infrastructure of Australia.

In February 2024, Siemens launched Gridscale X to improve autonomous grid management in Australia and accelerate its respective digital transformation for grid operators. The software contributes to improve visibility in Distributed Energy Resources (DER), which is a key parameter in grid decarbonization and net-zero objectives. Gridscale X has become an important enabler for strategic decisions, for Australia envisaging substantial enhancement in the power supply, within the country to cater to the needs for 2030 targets. In line with national efforts to scale infrastructural sustainably, the project represents a significant advancement for Australia's smart grid sector towards a more efficient and resilient energy future.

In March 2024, Itron, Inc. unveiled its Low Voltage Distributed Energy Resource Management Solution at the Energy Networks Conference in Adelaide. Specifically developed in Australia, the innovative solution will aid in managing the complexities of CERs at volume without impacting the stability of the low-voltage network. However, with CO2 reduction and EV adoption targets that are aggressive, a penetration greater than 30% is expected for rooftop solar. The need for improved grid stability management becomes more pronounced, specifically through better stability management at the edge of the network in the LV. The Itron data-driven approach gives a new twist to the challenges and, therefore, begets a new way of providing a solution beyond conventional model-based ways.