Proving the Business Case for the Internet of Things

Eurasia to invest $18.3 billion in smart grids in next ten years: Northeast Group

Iain Morris
September 16, 2014

Cumulative smart grid investment in the Eurasian region will reach $18.3 billion between 2014 and 2024, according to new research from Northeast Group, including investments in advanced metering infrastructure, distribution automation, wide area measurement, home energy measurement and IT.

The market research company says nearly three million smart meters will have been installed in the region by the end of the year, with utilities in Russia and Ukraine looking especially active in this area, driven by high distribution losses and benefitting from affordable local vendors.

Uniting countries across the region is the fact that all share an interconnected power grid as well as a legacy of inefficient power usage across the residential, commercial and industrial segments.

All of the major countries in the region have now passed some form of energy efficiency law and smart grid technology is set to play a major role in improving energy efficiency through revised tariffs and by making consumers more aware of energy consumption, says Northeast Group.

Also driving smart grid investment is the problem of electricity distribution losses, which are above average across Eurasia.

Smart meters are the most efficient tool for reducing these losses, says Northeast Group, and have already been used to lower rates in Russia and Ukraine to emerging market averages.

With a relatively clear-cut business case, there is little need for the regulatory spur that has driven smart grid investments elsewhere in Europe.

That is perhaps as well, according to the research, given the lack of meaningful smart grid regulations in Eurasia.

Nevertheless, the sanctions faced by Russia as a result of its military involvement in Ukraine could make “smart grid activity from Western firms difficult in the near term”.

Northeast Group still believes conditions for smart grid development in Eurasia are strong enough to drive investment in all but the most challenging regulatory environments.
 
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