Next big smart grid growth opportunity: Think smart cities (and think Asia)
By: SGN Staff
Quick Take: I couldn't have said it better myself. "Smart cities and communities are a towering market opportunity for companies in the smart grid value chain," asserts a new Zpryme report that sizes the opportunity in Asia. Although Europe currently holds the lead in both market and mind share, Asia is coming on strong. China is increasingly turning to smart city technologies to manage its massive urbanization wave. And Japan and Korea have both spotted smart cities as an important upgrade to quality of life that can also lead to export revenues. As a result, the Asia smart city market will explode from $55.6 billion in 2013 to $260.0 billion in 2020.
And guess what -- a smart grid is an essential foundation for a smart city. That's one reason I've helped to start the Smart Cities Council, an industry coalition dedicated to lowering the barriers to adoption. Our early members including smart grid stalwarts such as Cisco, GE, IBM, Itron, Microsoft and S&C Electric, not to mention utilities such as EDF and National Grid. - By Jesse Berst
As Zpryme notes, several more smart cities and communities projects are planned than noted in the report and are expected to be announced because a variety of pilot projects are essential to the "testing and planning phase of smart grid implementation."
The following are some of Zpryme's insights into the outlook for those companies in Asia's smart city and community market industry and potential players:
- Japanâ€™s recent government stimulus package will generate new business for renewables, smart cities and the smart grid.
- Increasingly accessible government support in China, Japan, and South Korea will continue to kick up the pace for smart grid momentum.
- Data analytics will grow as utilities will want to learn how to effectively use the abundance of smart meter data.
- The constant evolution of regulations (especially in China) and regulatory structure will be a significant driver for energy efficiency and demand response programs.
- The largest smart grid-related investments will be in network and distribution automation.
- Utilities that focus their smart grid strategies around customers, customer data and the knowledge gained from data will be the most successful.
- Renewable energy integration will continue to grow, but will continue to be a challenge for utilities until utility-scale storage technologies mature, and will take focus away from other key strategic development areas.
Jesse Berst is the founder and chief analyst of Smart Grid News.com, the industry's oldest and largest smart grid site. A frequent keynoter at industry events in the U.S. and abroad, he also serves on advisory committees for Pacific Northwest National Laboratory and the Institute for Electric Efficiency. He often provides strategic consulting to large corporations and venture-backed startups. He is a member of the advisory boards of GridGlo and Calico Energy Services.
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