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October 31, 2012

New Study Predicts Strong Growth for Smart Grid Technologies Market



While the commercialization of smart grid technology isn’t without controversy – the usual suspects who dismiss energy-savings technologies or policies of all kind have been vocal in their opposition – the market for smart grid technologies is expected to see healthy growth in the near future.

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This is according to a new report from Pike Research (News - Alert), a part of Navigant's Energy Practice, which found that the market for smart grid technologies that help integrate renewable energy sources will expand steadily over the next six years.

Revenue from smart grid renewables integration will grow from $3.8 billion in 2012 to just under $13 billion in 2018.

"For all the talk of the challenges of bringing increasing amounts of distributed, renewable energy sources onto the power grid, in reality there is no consensus on the exact effects of renewables integration on grid operations," senior research analyst Peter Asmus said in a statement announcing the release of the study. "What we do know is that the fundamental architecture of today's electricity grid - based on the idea of a top-down system predicated on unidirectional energy flows - is becoming obsolete, and is unsuited for the increasing diversity and variability of power generation. Microgrids, VPPs, and other smart grid technologies represent the vanguard of a new business model that echoes, in many ways, the diversity and modularity of our rich telecommunications networks."

Pike Research notes that the time horizons for widespread commercialization of these smart grid technologies vary widely. Demand response has been offered in some forms by utilities and grid operators for many decades, while clear business models for advanced energy storage have yet to be demonstrated. While larger investments are flowing toward renewables integration at the transmission-level of power service, most of these technologies, such as high-voltage direct current lines, do not qualify as "smart grid."

Today, distribution level smart grid technologies such as microgrids clearly lead this market, according to the study.




Edited by Braden Becker
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