Comparing 21 vendors in Smart Grid across 0 criteria.
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The Smart Grid Quadrant is a comprehensive industry analysis that provides valuable insights into the global market for Smart Grid. This quadrant offers a detailed evaluation of key market players, technological advancements, product innovations, and emerging trends shaping the industry. MarketsandMarkets 360 Quadrants evaluated over 35 companies of which the Top 21 Smart Grid Companies were categorized and recognized as the quadrant leaders.
A smart grid is an electricity network that uses digital technology to provide superior monitoring, automation, control, and management of energy transmission, distribution, power generation, and network supply. Smart grid technology enables the transition from a traditional energy distribution network to an intelligent electricity grid that allows two-way communication between utility service providers and their customers. The smart electric grid uses digital communication technologies, information systems, and automation for monitoring the energy flow and adjusting the changes in energy demand and supply. It also helps in real-time monitoring of power consumption by coupling it with smart metering systems, providing consumers and suppliers with information on real-time power consumption. Thus, the smart grid helps improve system operating efficiency, thereby reducing the operational cost.
The market for smart grid systems is defined as the sum of revenues generated by global smart grid companies from the sale of smart grid components. Software, hardware, and services are considered under smart grid components. Hardware and software components are used in the electric delivery system for the transmission, generation, distribution, and consumption applications.
The 360 Quadrant efficiently maps the Smart Grid Companies based on criteria such as revenue, geographic presence, growth strategies, investments, and sales strategies for the market presence of the Smart Grid quadrant. While the top criteria for product footprint evaluation included Smart Grid Market by Component (Software, Hardware, Services), Application (Generation, Transmission, Distribution, Consumption/End Use), and Communication Technology (Wireline, Wireless).
Key trends highlighted in 360 Quadrants:
- The global smart grid market size was valued at USD 43.1 billion in 2022 and it is expected that the smart grid industry will reach USD 103.4 billion by 2027, growing at a CAGR of 19.1% from 2022 to 2027. The market growth is attributed to the ongoing technological advancements, high demand for renewable energy sources in power generation, stringent government policies and rapidly changing trends in the smart grid market.
- The software segment accounted for the largest share of ~44.2% in the smart grid market in 2022. This is majorly due to the software capabilities that reduce unplanned downtime and production costs. These software systems are also benefiting the existing infrastructure companies, which is thereby propelling their growth in the component segment for the smart grid companies. Further, the demand for smart meters in the hardware segment is expected to rise due to the real-time information on energy usage offered by these meters, which helps end-users track their energy usage and spending. Such factors might drive the hardware segment in the near future and might as well create opportunities for smart grid companies.
- It was observed that the distribution applications held the largest share of nearly 53% of the smart grid market in 2022. It is because the efficient distribution application helps in quicker restoration of electricity after power disturbances, and further reduces the operations and management costs for utilities, thereby lowering the costs for consumers. However, the need to optimize energy production and the rising need to increase grid reliability and efficiency are also leading to the increased adoption of smart grids for generation and transmission applications as well. Thereby creating a multitude of opportunities for the smart grid companies to grow.
- The dynamics of the smart grid industry are advancing at a rapid pace. Smart Grid Companies are modifying their smart grid portfolio in order to address and reduce energy consumption and ultimately decrease the pressure on electricity grids. For instance, in January 2023, ABB invested in Danish start-up OKTO GRID to advance the development of technology that will digitalize and extend the useful life of ageing electrical assets in order to meet the growing demand for reliable and stable power.
- Another prominent reason that is driving the growth of the market is the initiatives taken up by various governments worldwide to meet future electricity demands and focus on reducing the carbon footprint. For instance, as per the International Energy Agency (IEA), China was observed to accelerate investment in 2022, with the State Grid Corporation of China budgeting more than USD 72.34 billion focusing on ultra-high-voltage projects, the upgrading of the distribution network and raising levels of digitalization of its grids. Such initiatives are forcing the smart grid companies to revamp their offerings.
- In terms of regional analysis, it was observed that the Smart Grid Companies in the North American and European regions have been the early adopters of smart grid technology due to the presence of advanced technology and increased expenditure on IT infrastructure. Other regions like APAC, Latin America, and the Middle East are also experiencing significant growth in recent years. In 2022, the Asia Pacific region dominated the smart grid market with nearly 39.1%. While the other regions showed almost similar growth.
- While the US dominated the North American region, China accounted for the largest share in the APAC region. The dominance of the APAC region is mainly due to the rising demand for smart infrastructure and the rising number of smart city projects.
- The smart grid market is consolidated due to rapidly rising global demand to enhance smart infrastructure. Together the top six smart grid companies account for a market share of nearly 35 to 40%. These top six key players include GE (US), ABB (Switzerland), Siemens (Germany), Schneider Electric (France), IBM (US) and Hitachi (Japan), where (US), and ABB (Switzerland) hold a market share of ~10-12% each.
- Product launches are the key growth strategy adopted by the leading smart grid companies including GE (US), ABB (Switzerland), Siemens (Germany), Schneider Electric (France), and Itron (US) in order to strengthen their positions in the smart grid market. Apart from this, smart grid companies are also focusing on different contracts, agreements, geographic diversification, and investments in order to enhance their position. For instance, in January 2023, ABB invested in Danish start-up OKTO GRID to advance the development of technology that will digitalize and extend the useful life of ageing electrical assets in order to meet the growing demand for reliable and stable power. In August 2022, another company GE announced it would unveil new technologies at CIGRE Session 2022. Among these are sulfur hexafluoride (SF6)-free g3 circuit-breaker for 420 kV gas-insulated substations.
- There have been several advancements going on in the energy sector to improve energy efficiency, save costs, and promote sustainability by the smart grid companies. The adoption of technologies such as artificial intelligence and blockchain will create a significant impact on the smart grid markets. To cite an example, the integration of blockchain technology in energy supply chains, notably in the construction of smart grids and microgrids. As the existing energy supply chain is complicated and prone to cyber-attacks and power disruptions, such technological integrations in the energy sector will create a modern and resilient energy supply network. Smart grid companies are now diving into these research areas and are trying to build a robust smart grid system. However, the potential of blockchain technology to change the energy industry also comes with risks and difficulties that need to be carefully thought through.
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