February 17, 2011 - Utilities worldwide will collectively invest more than US$378 billion in building electricity smart grids by 2030. But 80% of this capital spend will be concentrated in just ten countries, according to a new report by Innovation Observatory.

Over the next five years, the United States (US) will dominate global capital expenditure (capex), as US government stimulus funding drives a mass-market roll-out of advanced metering infrastructure. By 2030, the US will spend US$60 billion on intelligent smart grid infrastructure. This includes grid automation, communications infrastructure, IT systems and hardware, systems integration, and home area network equipment, in addition to smart meters.

Ultimately, the top-spending market will be China, where annual smart grid capex will overtake the US from around 2016. “China’s plans for wide-scale smart meter deployment will see it install over 360 million smart meters by 2030,” says Catherine Viola, the report’s co-author. “We expect China’s overall spend on smart grid development to reach US$99 billion by that date – more than a quarter of the global total.”

Two other major emerging market forces, India and Brazil, also make the top ten countries for smart grid investment, ranking third and sixth respectively. “Both India and Brazil have announced massive smart meter roll-out projects,” comments Viola.

“Brazil expects to replace 63 million electricity meters with smart meters by 2021, while India has plans for over 130 million smart meters.”

France, Germany, Spain and the UK are the leading European countries in terms of investment in smart grid infrastructure, while Japan and South Korea complete the top ten.

Competition to win contracts with utilities in these leading smart grid markets will be fierce, as the sheer scale of the investment is creating a huge appetite to supply.
Technology suppliers will need to tailor their strategies for different geographic regions, and adopt different approaches depending upon their size, their legacy industry expertise and the specific part of the smart grid value chain they serve.

Crucial reading for metering manufacturers, distribution/substation automation equipment vendors, software vendors, communications technology suppliers, and investors, the 45-slide report is available from Innovation Observatory priced at GBP1500 (plus applicable taxes).