Thematic Investments: Smart Grid
The New Challenge of the Power Industry




What is a "Smart Grid"
  • Smart grid is a technology combining innovative products and services to intelligently monitor, control and predict electric power consumption of all users connected to the system, in order to deliver reliable, economic, and sustainable electricity services.
    • “The US electrical grid has been plagued by ever more and ever worse blackouts over the past 15 years,’’ according to a report by Massoud Amin, director of the Technological Leadership Institute at the University of Minnesota – Twin Cities.
    • To meet future demand growth with efficient and secure infrastructure.The main issue of smart grid industry is the modernization of electricity distribution network in order. In 2009 President Barack Obama asked the United States Congress “to act without delay” to pass legislation with the aim of doubling alternative energy production in the next three years and building a new electricity “smart grid”.
  • The main objectives of developing Smart Grid technologies are:
    • Enhancement of infrastructure reliability
    • Reduce peak demand
    • Lower total energy consumption
    • Actively manage other usage to respond to solar, wind, and renewable resources


Investment Rationale

  • The market for the Smart Grid industry will top USD32 billion in 2011 and jump to USD37 billion by 2016, according to a new report from ABI Research.
  • The business opportunities for smart metering and infrastructure renovation projects is substantial with less than 100 million smart meters currently installed worldwide.
  • Smart grid is emerging as a major issue for the energy industry, as Europe aims to optimize its renewable growth and electric vehicle charging station implementation, and to achieve greater efficiency at the consumer level.

The Market

USA
  • In October 2009, the U.S. Department of Energy (DOE) announced its USD3.4 billion Smart Grid Investment Grant (SGIG) program.
  • GTM Research expects the US Smart Grid market to grow from a USD5.6 billion market in 2010 to USD9.6 billion in 2015.
Europe
  • By 2016, GTM Research forecasts EUR 6.8 billion per year in smart grid investment in Europe.
  • Smart grid is emerging as a major issue for the energy industry, as Europe aims to optimize its renewable growth and electric vehicle charging station implementation, and to achieve greater effi ciency at the consumer level.
  • According to GTM Research, in Europe, an estimated 42.3 million smart meters are currently installed, with a large contribution of Italy, Sweden, Finland and Denmark. In several of the larger member states, such as France, the U.K., and Spain, this number is expected to rise rapidly over the coming years and is expected to reach close to 206 million by 2020.
China
  • “With China’s announcement that energy efficiency will be a key part of its economic plans in its twelfth economic five-year plan, building efficiency will be vital to meet its targets.” said Kelvin Chan, ABI Research industry analyst. “Emerging markets such as Asia Pacific will see the highest growth rate over the next few years, but this region is starting from a small base.”
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