Smart Grid: Poised for Substantial Growth
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Mike McCarthy, Director, Investor Relations & Government Affairs.
It is the conclusion of most utility and communications industry analysts that the implementation of intelligence and seamless communication across the grid represents the largest upcoming wave of information technology spending, similar to the recent telecommunications and Internet booms.
According to Pike Research,* investments in smart grid initiatives will total $52 billion in North America by 2015, $80 billion in Europe by 2020 and $171 billion in Asia by 2015.
Governments in both the developed and developing economies around the world are advocating strong roles for smart grid technologies and services. The U.S. government is a substantial proponent of the smart grid and through the American Recovery and Reinvestment Act (ARRA) of 2009, has awarded more than $3.4 billion in stimulus funding for smart grid technology development and demonstration. Due to the cost-share nature of the awards, U.S. smart grid investment associated with the ARRA reached approximately $8 billion in short-term projects. The rollout of smart meters, just one specific smart grid application, is a current driving factor in the deployment of the smart grid. According to the U.S. Energy Information Administration (EIA), approximately 7% of all electric meters in the United States are smart meters, illustrating a large remaining smart grid investment opportunity for smart meters alone.
Independent industry analysts believe that distribution automation; another important and fast growing smart grid application, has the potential to be largest area of smart grid investment. According to SBI Energy, the global substation automation product market is expected to reach $106 billion by 2015. A bulk of that growth is expected to come from countries that are working to modernize their electricity networks and accommodate smart grid technologies.
As the demand for more efficient and intelligent electricity distribution expands, we expect future smart grid investment in applications and technologies to substantially increase.
The implementation of smart grid applications requires an open communications platform in order to facilitate the interoperability of a variety of applications and technologies – we believe the Ambient Smart Grid platform provides the solution.
* Pike Research. Executive Summary: Smart Grid Networking and Communications. Published 3Q 2010.