A new report analysing the global digital utility market forecasts revenue generation to reach $281.08 billion by 2023.According to energy market research firm Stratistics MRC, global utilities invested $105.34 billion in digital technologies in 2016 and are expected to increase their investments by 15% between 2017 and 2023. Investments in the global digital utility market will be driven by utility efforts to optimise the integration, monitoring, management and maintenance of increasing portfolios of renewable and distributed energy resources.
At the same time, smart cities, smart grids and smart meter projects will create opportunities for the growth of the market.
Digital utility market constraints
On the other hand, lack of funds to kickstart the rollout of digital technologies is expected to hinder the market whilst cybersecurity will pose a major threat to utilities digitalising their operations.
Although lack of initial capital to implement programmes on digital solutions is negatively impacting on the markets, some governments are providing utility programmes with financial assistance. Besides providing capital for rollout of projects, government intervention in the form of policy development is expected to play an important role in the growth of the digital utility market during the forecast period.
These policies are expected to force utility firms to find the means to adopt digital technologies, as well as attract foreign investments and private-private partnerships in the sector.
For instance, the US government introduced the Smart Grid Investment programme which, by 2015, led to 50% of consumers having smart meters installed in their households. Utilities in the US are increasingly investing in online, mobile channels and other advanced digital technologies to automate their processes using real-time analytics, according to the findings of the study.
The North America region, followed by Europe, holds a lion share of the market and is expected to continue dominating the segment throughout the forecast period.
The hardware segment which includes smart meters and smart transformers is expected to witness the highest amount of utility investments as energy providers seek to maintain their assets in a cost-effective manner. [World Economic Forum sketches roadmap for digital utility].
The energy retail segment is expected to take over domination of the digital utility market from the transmission and distribution segment which dominated the market in 2016.