According to Frost & Sullivan, Smart Grid market revenues are expected to increase to over $125 billion in the next 5 years.
The industry is still far from achieving it’s goal of deploying a true smart grid, despite the heavy investment. Manufacturers have to contend with several issues such as marketing in a highly unpredictable market, securing the financial backing and consumer backlash.
“Solution providers are realizing that the implementation of a smart grid requires a communal effort involving stakeholders from different entities to ensure a seamless integration,” commented Frost & Sullivan principal consultant Farah Saeed. “In the past two to three years, the industry has experienced an increase in exclusive and nonexclusive partnerships and alliances across industries to guarantee a trouble-free implementation of the smart grid.”
The risk of potential voltage fluctuations and interruption in power increases, due to the rising use of electric vehicles, inadequate investment in generation, transmission and distribution infrastructure.
In the U.S. 30 states have renewable portfolio standards, which require electric utilities to generate a certain amount of electricity from a renewable power source. In Europe, the European Commission has established a directive to cut greenhouse gas emissions by 20 percent from the 1990 levels, produce 20 percent of energy from renewable sources, and increase energy efficiency by 20 percent by 2020.
The decision process is slow for the smart grids, due to uncertain economic conditions. Many utilities are hard pressed to justify investments in smart grid to their stakeholders, consumer groups and regulators due to the economic slowdown in recent years.