Smart Grid Market
Global Industry Analysis and Forecast 2023-2030
Market Value (2022)
USD 39.18 Billion
Forecasted Value (2030)
USD 123.24 Billion
CAGR (2023 â€“ 2030)
Fastest Growing Region (2023 - 2030
Advanced Metering Infrastructure, Smart Grid Distribution Management, Smart Grid Communications, Smart Grid Network Management, Substation Automation, Smart Grid Security, Others
Generation, Transmission, Distribution
Residential, Commercial, Industrial
The global Smart Grid Market was valued at USD 39.18 billion in 2022 and is projected to reach USD 123.24 billion by 2030, growing at a CAGR of 13.57% from 2023 to 2030.
The popularity of smart grids is growing due to the increasing energy demand and supportive regulations by governments in different regions of the world. Rapid implementation of centralized network distribution management and control is driving the global market expansion. The major factors driving industry growth are the popularity of smart meters and the initiatives of regional governments and the financing of smart grid projects. Additionally, the increase in the number of market players across the globe is contributing to the expansion of the smart grid market, which is creating lucrative opportunities for market players. Governments of various countries are transforming cities into smart cities, which propels market growth. However, these smart grid technologies require large investments initially to set up the transmission network between the customers and the advanced grid, which restricts the market growth. Lack of standardization and growing concerns about privacy and data security are expected to hinder the growth of the market. The concerted efforts of market players to overcome the challenges of the smart grid market will impel business growth.
Analyst’s Review on the Smart Grid Market
Smart grid technologies enable energy-saving projects that are more convenient to implement by delivering users with real-time energy consumption information as well as insight. Smart grid technologies are applied through advanced data analysis and artificial intelligence to gain insight, optimize network operations, and enable predictive maintenance. These technologies help utilities make informed decisions, improve network performance, and increase customer engagement, thus fuelling global market expansion. The government policies and regulations that support the use of smart meters and increased investment in digital electricity infrastructure are also driving the growth of the smart grid market. In addition, the increase in the number of electric vehicles on the roads and in the development areas of future smart city projects would create lucrative opportunities for market growth in the coming years.
A smart grid is an electrical network that uses digital and other advanced technologies to control and manage the transport of electricity from all generating sources to meet the electricity needs of end users. Smart grids coordinate the needs and opportunities of all producers, network operators, end users, and electricity market stakeholders to use all parts of the system as efficiently as possible. The market vendors are focusing on minimizing costs and environmental impacts and maximizing system reliability, resilience, flexibility, and stability. There is a growing need to reduce blackouts which are caused by aging electrical infrastructure and with the help of smart grid technologies, these unreasonable blackouts can be eliminated.
Growing demand for quality, safe, and reliable power supply provides significant growth opportunities for the market. Increasing concerns about the carbon footprint and upgradation of aging infrastructure is shaping the global smart grid market. The increasing use of smart meters’ with increased support of regional government through funding for smart grid projects which fosters market growth. The popularity of smart grids is increasing as the demand for a safe and reliable energy source increases. It enables advanced monitoring, control, and automation of the electricity network, which enables more efficient management of electricity production, distribution, and consumption. By optimizing the coordination and integration of different energy resources, the smart grid improves the reliability and flexibility of the electricity supply. This enables better integration of renewable energy sources into the grid, facilitates load balancing and improves grid stability. In addition, smart grid technologies enable real-time monitoring and response to power outages or other disruptions, improving the overall reliability of power supply.
Local and national authorities have a vital role in the transformation of energy infrastructure, however, higher installation costs and investments is a major concern. These capital-intensive deployments of smart grid solutions may hinder market growth. Some of these costs include process automation research and development costs, as well as preventive repair and maintenance costs. High installation costs of the smart grid further reduce its use in residential projects and small-scale commercial buildings. In addition, the operation of smart grids is also associated with training costs, which further limits the market growth.
The global smart grid market is segmented based on component, solution, application, end-user, and geography.
Based on component, the market is segmented into solutions and services. The solution segment dominates the overall market, owing to cost savings on overall electricity bills and an increased need to transition from conventional energy sources to sustainable and renewable energy supplies. Furthermore, growing concerns about security and data privacy are a crucial factor driving the expansion of this segment.
Based on technology, the smart grid market is segmented into advanced metering infrastructure, smart grid distribution management, smart grid communications, smart grid network management, substation automation, smart grid security, and others. The advanced metering infrastructure segment is the most dominating segment owing to the increase in the efforts to modernize the electricity grid. In addition, the increase in investments in advanced metering infrastructure (AMI) by the government is expected to propel the market growth for this segment.
Based on application, the smart grid market segmentation includes generation, transmission, and distribution. The distribution segment is the dominating segment as it prevents energy loss and connect to lower voltage distribution lines which is provided to the customers.
Based on end-user, the smart grid market is divided into residential, commercial, and industrial. The residential segment maintained a dominating share in 2022. The residential segment's growth is currently facilitated by the rising deployment of smart grids, which automatically monitor the flow of energy and react to supply & demand patterns. Smart grids with smart metering systems notify users and providers of real-time usage, which is predicted to increase with smart city projects.
Based on regional analysis, the global smart grid market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.
North America dominated the smart grid market to maintain its dominant position during the forecast period. In countries such as the United States and Canada, governments are focusing more on creating appropriate and supportive regulatory frameworks for the deployment of smart grids in the region. The early adoption of smart grid in the region due to the enhanced financial strength of the economy has fuelled the growth of the market. The emergence of smart city projects increases the need for technologically advanced smart grid technology. In addition, the growing need for clean energy sources has increased the adoption of smart grid technology in the region.
The deployment of smart grids is considered crucial to address the aging electricity infrastructure and meet the region's growing electricity demand. Several initiatives and conferences focus on the development of smart grid technologies in North America. Government agencies across the region develop standards and guidelines for the deployment and use of smart grid technologies, promoting interoperability and cybersecurity measures. By leveraging digital technologies and data solutions, smart grids can meet the current and future challenges of the electricity industry and empower consumers to participate in energy management, and promote the transition to cleaner energy across the region.
The global smart grid market study will provide valuable insights with an emphasis on the fragmented nature of the overall industry. Prominent players are focusing on several key business strategies, such as partnerships, mergers & acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their respective market shares across different regions. The major players in the smart grid market are:
- Aclara Technologies LLC
- Cisco Systems, Inc.
- Honeywell International Inc.
- Schneider Electric
- April 2022 (Collaboration): Gridspertis and Hera Group signed a collaborative agreement to develop intelligent electricity networks of the future through a modern electricity network. The collaborative agreement specifically covers the testing of the integrated data collection system used in Hera Group's gas facilities and the smart meters of Gridspertinen's electricity networks.
The global Smart Grid Market is segmented as:
- Advanced Metering Infrastructure
- Smart Grid Distribution Management
- Smart Grid Communications
- Smart Grid Network Management
- Substation Automation
- Smart Grid Security
- North America
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- North Africa
- South Africa
- Rest of Middle East & Africa
- Latin America
- Rest of Latin America