Smart grid transmission equipment sector to grow at 16% CAGR
June 14, 2016
Increased investments in smart technologies will drive the global smart grid market until 2020, according to market watcher Technavio.
Analysts are forecasting positive growth for many segments of the global smart grid market over the next four years as several related markets, including smart grid transmission and distribution equipment, smart grid data management and vehicle grid integration technologies will likely witness an increase in revenues.
The research shows that the global smart grid transmission and distribution (T&D) equipment segment will grow at a CAGR of more than 16 per cent over the forecast period. One of the primary factors driving the growth of this market is the rapid modernisation of grids.
Fuelled by an aging power infrastructure, cyber-security risk mitigation and the addition of new resources to the grid have led the electricity and power sector to find new ways to make the grid more reliable and flexible to suit rapid changes in supply and demand.
Analysts have also estimated factors such as rapid deployment of smart grids in many countries to spur growth prospects for the smart grid data management segment during the predicted period. Countries such as China, USA, India, Spain, Germany and France are enforcing ambitious smart grid plans including grid applications such as smart energy meters, scada systems, IT and other communications networks.
These devices give utilities complete control and the ability to manage digital assets in the field. This recent shift to smart grid directly translates to an imminent need to manage complex smart devices to prevent grid failure and outages. This will bolster the demand for sophisticated control systems to manage data collected from the field and will therefore contribute to the growth of the smart grid data management market until the end of 2020.
“Rising need for reduction in GHG emissions and energy independence will likely augment the vehicle grid integration technologies market during the forecast period,” said Vishu Rai, one of Technavio’s lead analysts. “Also, factors like optimisation of intermittent renewable power generation will further aid the steady growth of this segment over the next four years. Factors like remote locations and intermittent nature of renewable energy sources act as constraints for power generation and distribution. However, vehicle-to-grid (V2G) technology will emerge as a viable option for solving these problems as it smoothens power fluctuations from these sources.”
The Americas dominated the data management systems segment with more than 64 per cent of the market share during 2015. The Americas will also likely hold its dominance over the smart grid T&D equipment segment, which is envisaged to reach more than US$7bn by the end of 2020. However, APAC is expected to be the largest market for vehicle-grid integration (VGI) technologies during the forecast period. In this region, the demand for VGI technologies will be driven by the need to improve energy security in some of the fast-growing economies of APAC.