Smart grid markets on the move

Tools

By Liz Enbysk

SGN Managing Editor

 

An interesting new report from Pike Research puts a spotlight on virtual power plants (VPPs) which, while not a new concept, appear to be ready for prime time. Pike's research suggests that after a decade of pilot projects testing and validating VPPs as a smart grid platform, we will see significant growth over the next few years.

 

Pike is forecasting the total worldwide capacity of VPPs will jump from 3,800 megawatts this year to 15,400 MW by 2020 – a five-fold increase.

 

“VPPs represent an ‘Internet of energy,’ tapping existing grid networks to tailor electricity supply and demand services for a customer, utility, or grid operator,” says Pike principal research analyst Peter Asmus. “By stretching supplies from existing generators and utility demand reduction programs, they deliver greater value to the customer while also creating benefits for the host distribution utility and the transmission grid operator.”

 

You can download the executive summary of Pike's report Virtual Power Plants.

So what about the overall smart grid technologies market?

The total smart grid technology and related application market is expected to reach $80.6 billion by 2016 at a CAGR of 28.7% from 2011 to 2016, according to a new report from research firm MarketsandMarkets. The report indicates Australia, the UK, France, Italy and the U.S. have the highest potential for expanding smart grid technologies and suggests communications networks will account for a big share of it.

 

Pike Research, meanwhile, is forecasting the smart grid technologies market – which it views as transmission upgrades, substation automation, distribution automation, smart grid IT/OT and smart metering -- will grow from $33 billion annually in 2012 to $73 billion by the end of 2020, totaling $494 billion in cumulative revenue over that period.

 

As the Pike report notes, though many smart grid programs based on these technologies are underway, the scale of what remains to be done is enormous: "A number of countries with populations over 100 million have not yet seen notable smart grid deployment activity, and Africa, with its population of 1 billion, has seen very little at all. All of this suggests that the market is likely to continue robust growth beyond 2020."

Do you agree or disagree with the researchers? Use the Talk Back comment form to share your thoughts on  when and how smart grid technology markets will grow?

 

You might also want to read these recent posts…

Ouch! AP claims grid spending is making power LESS reliable

Smart grid market outperforms in 2012 (but the future looks less bright)

Market pause? More like a smart grid market explosion, says researcher