Frost & Sullivan’s (News - Alert) recent analysis finds that utilities in the Asia Pacific region are gradually shifting towards smart grids.

To meet the green energy objectives, various governments in the Asia Pacific region have issued regulatory mandates requiring utilities to modernize their grids. The utilities, spurred on by government funding and the cost saving benefits of the advanced technology, have started moving toward smart grids, Frost & Sullivan officials said.

The new report, “Asia Pacific Smart Grid Market” finds that smart grids will revolutionize the face of the current power sector from a unidirectional transmission system to an intelligent energy Internet. 

Smart grid involves two-way digital communications between the energy supplier and the consumer. The smart grid monitors the electricity usage and informs consumers about power usage. It empowers customers with the ability to have better control over their energy expenses.

Transition to smart grid brings in immense business opportunities for a wide array of firms in the Asia Pacific region, the research agency said. It changes the way utilities function in the region. 

The new technology provides a massive growth opportunity to a variety of businesses including metering companies, network and software solution providers, system integrators, consultants, and equipment manufacturers, researchers at Frost & Sullivan said.

“Currently, Australia, New Zealand, Singapore, South Korea, and Japan have announced major packages to stimulate Smart Grid development,” said Rajat Gupta, a Frost & Sullivan consultant. “The deployment of Smart Grid can result in significant cost savings for a utility through a reduction in manpower costs and peak load of power plants.”

In the Asia Pacific region, Australia has made it mandatory for utilities to install smart meters. Frost & Sullivan expects that other countries in the region will follow the suit as the business case for smart grid emerges stronger in the region.

Smart grid initiatives in developing countries of Malaysia, Indonesia, Thailand, and the Philippines are hindered by economic factors. However, once these countries learn from the experience of other nations and realize the cost and environmental benefits of large-scale smart grid implementations, their governments are likely to increase support to utilities through funding plans, the agency said.

For many countries in the Asia Pacific region, smart grids are bound to bring in returns in the long term, so it is crucial for utilities to invest heavily in them in the short term, finds the report. It also says vendors that are part of the smart grid value chain need to customize products and service offerings to each country's and utility's need, as the market evolves from an emerging to a more mature stage.

Recently Lux Research predicted that global smart grid market will grow from today's $4.5 billion to $15.8 billion by 2015.  The report focuses on three segments of smart grid market – measurement and communication, analysis and services, and local management.