The next few years will see a growing number of utilities installing smart grids and consumers upgrading their existing systems to incorporate smart meters with demand response options.
A new analysis from Frost & Sullivan says that this development is likely to be especially evident in Europe, a front-runner in the enforcement of environmental and energy efficiency policies.
The research firm expects investment activity in the European smart grid market to be driven by the need to replace an ageing electric utility infrastructure, which is estimated to be between 70 and 80 years old in most of Europe.
Smart grid technologies provide an excellent option for investors to maximise the use of existing infrastructure through better monitoring and management solutions, while strategically deploying new infrastructure on a sheer requirement basis, commented Deepak Achuthashankar, analyst for Frost & Sullivan’s Industrial Automation & Process Control group.
The market for smart meters in particular is expected to grow at a rate of more than 10% in the coming years, according to a separate report by Research and Markets which says that the global market for smart electricity, gas and water meters will reach a value of $18.2 billion by 2019.
Frost & Sullivan also believes that numerous aggregators will emerge in each country due to the need to incentivise demand response programmes in the electricity market.
Aggregators will act as an intermediary between utilities and end users, playing a balancing act to address the electricity demand-supply disparity, Achuthashankar explained. Their role will become progressively important in the region as industrial consumers have expressed their willingness to shift loads.
Frost & Sullivan concluded by stressing that consumer awareness and participation are vital if smart grid projects are to succeed.
It is…imperative that consumers trust and understand the whole smart grid process and receive tangible benefits, the research firm said.