The smart metering market in Southeast Asia will reach $6.9 billion by 2022, according to research findings just released by the Washington, DC-based Northeast Group LLC. Indeed, within a decade, Southeast Asia likely will have an electricity demand profile similar to that of Latin America and Eastern Europe, where large-scale smart meter deployments already are on the table.
The study, “Southeast Asia Smart Grid: Market Forecast (2012-2022),” forecasts the growth of advanced metering infrastructure (AMI), or smart metering, in eight Southeast Asian countries – Singapore, Thailand, Malaysia, Indonesia, the Philippines, Vietnam ,Cambodia and Laos. The majority of Southeast Asia's smart grid activity will take place in the second half of the forecast period, after strong gross domestic product (GDP) growth rates have further increased electricity consumption.
"Southeast Asian economies are forecast to grow at an average of nearly six percent per year throughout this decade, despite the slowdown in other regions of the world,” said the analysts. “Southeast Asia's swift growth creates both challenges and opportunities for its electric infrastructure."
Chief among the challenges are concerns that unreliable electric infrastructure and rising energy costs could dampen overall economic growth potential. While Indonesia and the Philippines are scrambling to add peak electric generation capacity, in other parts of the region, the existing transmission and distribution grids are insufficient to meet growing demand. Power outages already are commonplace— and are likely to increase, if new infrastructure is not deployed.
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"Rising electricity demand due to GDP growth presents unique challenges for Southeast Asia," the report notes. "But the financial flexibility that growth provides also creates opportunities. Southeast Asian countries are expected to invest more than $50 billion per year in overall infrastructure in the next few years, with a significant portion allocated to the power and utility sector. Investments in smart grid will be a critical component of these expenditures. They will help manage electricity demand growth, improve reliability, and increase the share of domestic renewable sources of energy in the generation mix."
Indeed, smart grid activity already is picking up, led by the developed economy of Singapore, which has plans for a full smart meter deployment. Pilot projects also are in development in Thailand and Malaysia, with additional projects under discussion in Indonesia and the Philippines. Strong policies supporting renewable energy efficiency in countries such as Malaysia, Singapore, and Thailand demonstrate that more smart grid investments are just around the corner.
In anticipation of the increased activity, domestic firms, international smart metering vendors, and communications providers are positioning themselves in the Southeast Asian smart grid market. In addition to smart metering, there are major opportunities for distribution automation vendors – and even vendors for projects such as smart street lighting.
"The smart metering market is rapidly advancing in Southeast Asia. Low per-capita electricity consumption rates in many of these countries currently make large-scale deployments cost prohibitive, but that will quickly change in the coming years, as GDP growth remains high. Additionally, in some countries in the region, electricity theft rates are above average and can be best addressed with smart metering. Along with improved reliability, these factors show that the benefit potential of smart grid in Southeast Asia is quickly increasing. In response, the number of local firms in the market and partnerships between international and Southeast Asian metering vendors is expected to pick up in the medium term," added the analysts.
In addition to AMI market forecasts, the report surveys activity in distribution automation, wide area measurement, and home energy management. The report also highlights domestic and international firms active in the market.
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Edited by Allison Boccamazzo