The Surprise Winners in the $34 Billion Smart Grid Market - 11 Feb 2011

As smart grid programs advance in Europe, North America, and Asia, utilities across the globe are installing smart meters and other intelligent hardware. A new report from Lux Research shows that while this roll-out promises more efficient grid management, it also predicts a 900% increase in the quantity of data that utilities will need to communicate, manage, and analyze over the next decade.

As a result, utilities will invest heavily in technologies enabling them to capitalize on this flood of data, driving the global smart grid market from $12.8 billion today to $34.2 billion in 2020.

Another report written by Lux Research titled “The Data Revolution: How Intelligent Hardware Will Drive the $34 Billion Smart Grid,” projects the growth of data over the coming decade, and examines how this growth will drive utility investment in related smart grid applications.

Lux Research performed an analysis of existing smart grid project roll-outs as well as targets put forth by utilities and regulating bodies, factoring in the maximum penetration rates for different grid technologies based on cost-benefit analyses. Among its key findings:

Led by China, Asia will generate the most growth in smart grid data. With a current market potential of 183 million residential meters, China’s residential market is already 38% larger than that of North America.

Intelligent distribution, not smart meters, is the application to watch. The growing smart meter market will plateau at $4 billion mid-decade and begin declining in 2018 as the largest markets approach saturation. Intelligent distribution hardware, conversely, will see continued expansion throughout the decade, fuelled by adoption in China and North America.

Telecom and IT incumbents will ride a wave of growing opportunities. Growing demand for logistics and analysis hardware will lead utilities to adopt technologies developed by the telecommunication and information technology industries. As a result, incumbents like Cisco, General Electric, and Oracle have an explosive growth opportunity in smart grid.


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