Smart Grid

September 17, 2012

Utilities Must Learn to Analyze and Store the 'Facts of Life' on the Smart Grid

Are we substituting one type of system overload for another? As electric utilities worldwide upgrade to the smart grid—and begin receiving an endless stream of data about system demand and functionality—they are finally gaining control over system overloads and learning to operate their infrastructure at peak efficiency. But, where will all of the data go and how will it be analyzed and acted upon?

According to a new report from Boulder, Colorado-based Pike Research (News - Alert)—called “Smart Grid Data Analytics”—the volume of system data is expected to grow by several orders of magnitude over time. Overall, the worldwide market for smart grid data analytics is expected to grow steadily through 2020, with cumulative worldwide spending from 2012 through 2020 totaling just over $34 billion.

The bulk of this spending will occur in Asia-Pacific, where annual investment will surpass $2.5 billion by 2020. Asia-Pacific will see early growth rates of over 50 percent and an overall compound annual growth rate (CAGR) of 25 percent—with the bulk of the spending in the world markets. This will be driven by China’s aggressive deployment of smart meters and its attendant infrastructure, although, Pike analysts say, at this point it is unclear which drivers will be most important to that nation in deploying analytic solutions. As those drivers are clarified, it is possible that opportunities in Asia could grow at an even faster rate than currently anticipated. 

Latin America, the Middle East, and Africa, due to their overall low penetration rates of smart grid technologies, will experience mid-forecast rates exceeding 60 percent and overall CAGRs of 40.1 percent and 44.7 percent respectively.

Given the 20-20-20 mandates in Europe and the continuing penetration of AMI (estimated to be approximately 80 percent by 2020), Pike Research forecasts that adoption will progress rapidly for smart grid data analytics solutions in the European region. Europe will hold a slightly stronger share of the market in 2020 than it does today.

In North America, despite lowered projections regarding advanced metering infrastructure (AMI) deployment, more electric utilities are expected to adopt smart grid technology as they expand on their existing smart grid operations, driving a strong demand for data analytics. Pressure and policy to raise caps on renewable integration will drive uplift in the analytics market in North America in 2017. North America will continue to steadily progress, as utilities work to integrate home area networks (HANs) into their sphere of control. Many meters, especially in North America, provide networking capability that can reach into the customer’s side of the meter for command and control of in-home devices. Even while the forecast trend normalizes, the continuing growth in the North American region can be attributed to the fact that the United States has a very large addressable utility market of 3,273 utilities.

The application of smart grid data analytics is actually quite varied and complex because it is employed to support multiple outcomes related to operations, customer issues, and business questions. Even so, depending on the characteristics of the data being analyzed, smart grid analytics can broadly be defined as the process of examining raw data from smart grid sensors and devices, other forms of operational data, historical, and business data to draw conclusions, make decisions, and respond appropriately.

Machine-to-machine (M2M) communication, dashboards, consumer-facing web portals, in-home devices, visualization tools, modeling software, and spreadsheets all are processes by which analytically powered decisions can be derived and revealed.

This Pike Research report analyzes the global market opportunity for smart grid data analytics across four key solution segments: meter analytics, grid analytics, asset analytics, and renewable integration for business intelligence, operations, and customer management. The report provides a comprehensive assessment of the demand drivers, business models, policy factors, and technology issues associated with the rapidly-developing market for smart grid data analytics. Key industry players are profiled in depth and worldwide revenue and capacity forecasts, segmented by application and region, extend through 2020.

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Edited by Amanda Ciccatelli