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The company researched smart meters, installation, communication systems and networks, meter data management and customer and program data management to reach its conclusion.

"Emerging smart grid technologies, which support enhanced energy management, will boost the installation of AMI in Europe," said Neha Vikash, Frost & Sullivan Energy & Power Supplies Research analyst. "The market is expected to witness higher  growth not only in smart meters and the installation segments, but also in communications networks, MDM, customer and program data segments as well."

As the report explains, most companies in the AMI market aren't just meter providers. They typically incorporate services and capabilities in communications infrastructure and data management. Those drive deployment of innovative solutions, while hardware installation itself does not provide a consistent revenue stream.

Uneven deployment

Despite the rapid overall growth, the implementation level is far from even across Europe. Growth has been quicker in Western and Northern Europe, while installation rates in Central and Eastern Europe have been influenced by a "lack of regulatory drive and utility implementations."

But that, Vikash said, is likely to change. "It is expected that the smart metering activity in the CEE region will follow the Western European knowledge wave and experience. It is also expected that once large scale rollout activity begins in Central and Eastern Europe, the pace of implementation will be faster compared to that of Western Europe."

And, like it or not, European Union members that aren't pushing very hard won't have much choice after 2015 when they will have to deal with large scale implementation to comply with the EU's Third Energy Directive, or pay an expensive fee.

Also, standardization is likely to affect future meter sales and development – and data security is another issue, Vikash said. "Meters complying with security requirements as per the standardization mandate as well as satisfying regional legislative security requirements are likely to encourage customers to adopt smart meters," he explained.

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Where the opportunities are: Smart grid growth in Europe