" new report by Innovation Observatory, more than $378 billion will be collectively invested in building electricity smart grids by 2030"

February 16, 2011

China Set to Overtake US Smart Grid Capex by 2016

By Mini Swamy

TMCnet Contributor

Utilities worldwide are focusing on building smart grids, and global smart grid investment is also increasing. In fact, according to a new report by Innovation Observatory, more than $378 billion will be collectively invested in building electricity smart grids by 2030. While this is indeed heartening news, the fact that 10 countries will accountfor 80 percent of the investment is a sobering thought.

The U.S. government definitely means business for its stimulus funding will trigger a mass market rollout of advanced metering infrastructure. If that happens, then over the next five years, the United States is all set to dominate global capex. By 2030, it is expected to spend almost $60 billion on smart meters, grid automation, IT systems, home area network equipment and other allied aspects.

However, by 2016, the market scenario is likely to shift with the focus being on China, where annual smart grid capex is likely to overtake that of the United States. Catherine Viola, the report's co-author, said, “China's plans for wide-scale smart meter deployment will see it install over 360 million smart meters by 2030, and we expect China's overall spend on smart grid development to reach US$99 billion by that date – more than a quarter of the global total.”

Turning attention to the emerging market forces, Viola predicted that India and Brazil, who have announced massive smart meter roll-out projects, are likely to figure in the top 10 countries for smart grid investment occupying the third and sixth spot, respectively. While Brazil expects to replace 63 million electricity meters with smart meters by 2021, India has set its target for over 130 million smart meters.

France, Germany, Spain and the U.K. are the leading European countries in terms of investment in smart grid infrastructure, while Japan and South Korea complete the top 10.

Looking at the sheet scale of investment, there's bound to be stiff competition to win contracts with utilities. Technology suppliers cannot adopt the “one size fits all” attitude, for they need to tailor their strategies for different geographic regions, and adopt different approaches depending on local factors, their size and their legacy industry expertise.

Crucial information for investors, suppliers, vendors and metering manufacturers is available at the Innovation Observatory website. The 45-slide report is available for payment. Innovation Observatory researches, analyzes and interprets fast-moving technology markets to help companies and other organizations understand how technology markets evolve