An increase in the number of large-scale electrical blackouts is prompting countries to invest in smart grid technology, according to new research released this week.
Conventional electrical grids installed in several countries are now reaching the end of their lifecycle, which has resulted in massive electrical blackouts, asserts the data from Transparency Market Research.
The company expects to see the smart grid technology market grow by a steady 7% until 2018.
The global market will also benefit from the demands of regulatory compliance with smart grid distribution estimated to reduce carbon dioxide emissions by around 25%.
The sector however will face challenges.
A lack of interoperability and common standards will suppress the global market for enabling technologies for smart grids, believes analysts at Transparency Market Research.
Also the high initial set-up cost of these technologies is another discouraging factor.
Core smart grid technology
By type, the global smart grid market is divided into grid scale energy storage systems, energy management systems (EMS), and microgrids.
In 2011, the segment of distributed energy generation and storage held the largest share of approximately 76% in the global market for smart grid technology.
At present, the sector of sensing, measurement, and control accounts for a small share in the global market for enabling technologies for smart grids.
However, this sector is expected to demonstrate the highest CAGR of 85% during the forecast period of 2012 to 2018.
The microgrid segment of smart grids is expected to show healthy growth in the next decade.
The global microgrid market is expected to soar at 20.7% CAGR during the forecast period of 2014 to 2020.
In 2013, this enabling technology sector for smart grids was pegged at US$9,841.8 million, and by 2020 this sector is expected to be worth US$35,186.0 million.
Factors such as the advancement in renewable energy technologies, rapid industrialization, and indirect and direct benefits of microgrid are augmenting microgrid deployment.
The trend of prepayment of electricity will offer a good growth opportunity for market players operating in the global market for enabling technologies for smart grids.
US-based Transparency Market Research identifies top companies in the smart grid space as 3M Company, Alvarion, American Superconductor, Chevron Corp, GE Energy Management, Ambient, Power Analytics, Toshiba, S&C Electric Company, and Schneider Electric.