Global Smart Grid Enabling Products Market

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Global Smart Grid-Enabling Products Market
2009-2010
November 1, 2010

Countries upgrading their electricity Smart Grids face many challenges during the first few years. Besides
securing capital investment and funding, other hurdles can inhibit the progress of Smart Grid
development. Many Smart Grid efforts are challenged by lack of resources, including trained personnel,
advanced technology, industry research, and support from the public and private sectors. Suppliers of
products that enable Smart Grid development and improvement are embarking on substantial marketing
campaigns in regions committed to Smart Grids. They can expect an abundance of marketing
opportunities through 2015. Now that governments have laid plans for grid improvements and utilities are
securing funding to actualize those enhancements, the suppliers of the tools and technologies required
for Smart Grid deployment will become more of a near-term necessity. This report from SBI Energy
analyzes the burgeoning market of Smart Grid-enabling products - an industry that through 2015 will likely
reach $186 billion in market value worldwide.

Additional Information

Market Insights: A Selection from The Report

Projected Number of World Smart Meter Installations

Around the world, smart meter deployment plans are advanced in many countries, with deployments
often being mandated nationally. For the European Union, all member nations are required to have smart
meter deployments accomplished by 2022. In China, the deadline for national smart meter deployment is
sooner, at 2020. The United Kingdom is also requiring complete smart meter rollout by 2020. The trend in
Europe is that its share of spending on Advanced Information and Performance Controls, which includes
smart meters, will gradually increase from 2% in 2010 to 13% in 2013 before stabilizing at about 10% by
2015. The bulk of its spending will largely be in Sensing and Response products.

But of all the countries with smart meter deployment plans, South Korea is so far the most advanced.
South Korea calls for 100% AMI smart meter deployment by 2020—and a fully realized smart grid by
2030. Note that South Korea is also a big promoter of PHEVs. As soon as 2012 it hopes to have 500,000
elect ric vehicles on the road. By 2030 the plan is to have 2.5 million PHEVs on the road along with total
vehicle-to-grid integration. Japan will garner a larger share of the global sales for electric vehicle
infrastructure manufacturing by 2014 as it capitalizes on its large installed base of automobile
manufacturers and commitment to cleaner energy resources. Asia as a whole will comprise nearly one-
quarter of the global manufacturing industry by 2014. China has enjoyed a 65% share of the industry for
X years, but SBI Energy expects its share to fall to below 50% by 2014 as India and Japan emerge as

competitive nations by embracing electricity to power their public transportation systems and turn to EVs
as cleaner alternatives to internal combustion engine (ICE) automobiles.

Technology Drivers

Advanced digital information and communications technology provides a strong basis for Smart Grid
market growth. Basic technology has already been developed for everything from smart meters to smart
appliances and networked homes. Moreover, smart grid applications and services will only get more
sophisticated as technology develops. Related technological advances in distributed generation,
particularly in renewable energy, will also drive smart grid market growth. These shifts in the technological
foundations of the grid will have profound implications for the old centralized business models on which
utilities currently operate.

Technology-based products in the Advanced Information and Performance Control sector will increasingly
take market share away from other Smart Grid-enabler products sectors, most notably Sensing and
Response. SBI Energy forecasts that by 2015, the global market share of smart meters in the Advanced
Information and Performance Control group will grow from 19% to nearly 26% as nations assertively roll
out their government-mandated smart meter deployment programs.

In the News

2011-2015 Identified as Pivotal Period for Global Smart Grid-Enabling Products Market

New York, November 10, 2010 — The next five years will be a pivotal period for the global smart grid
market with grid component companies expected to leverage their sales prowess to capture long-term
contracts throughout the electric grid supply chain, according to SBI Energy’s new industry study Global
Smart Grid-Enabling Products Market. Eagerly anticipated government cash incentives will prove
equally crucial for developers and will inevitably spark sales of smart grid components.

Many factors are driving the smart grid-enabler products market growth but the most predominant forces
are the aging grid infrastructure, the influence of product marketers to integrate their solutions into these
grids, and rapidly advancing technologies required to keep pace with electricity demand. Since 2005, SBI
Energy estimates that the global smart grid products market size has grown from $26 billion to in excess
of $69 billion in 2009 —a compounded annual growth rate (CAGR) of 22%. SBI Energy forecasts the
global market size for smart grid-enabler products will surpass $186 billion by 2015.

The study divides smart grid-enabling products into five sectors: Integrated Communications, including
switches, routers, and telecommunication system technologies such WiFi, broadband, and WiMax;
Advanced Components, including inverters, flow control devices, storage batteries, and microgrids;
Advanced Information and Performance Controls, including methods for monitoring power system
components, enabling rapid diagnosis and timely response to any event on the grid that disrupts the flow
of electricity; Sensing and Response, including technologies that enhance power system measurements
and enable the transformation of data into information; and Improved Interfaces and Decision Support,
which consist of technologies that effectuate decision support with improved interfaces that lead to more
accurate and timely human decision making at all levels of the grid.

Short-term beneficiaries of smart grid investment are infrastructure manufacturers that provide the
necessary compliant equipment and technologies. Additionally, companies specializing in the
manufacture of various smart grid components (such as smart meters and integrated communications
technologies) will enjoy strong demand for their products.

"The development of the smart grid involves a complex mix of technologies, devices, and systems that
will be deployed throughout the electric system. The suppliers of products that enable smart grid
development and improvement are embarking on substantial marketing campaigns in regions committed

to smart grids," says Darren Bosik, SBI Energy analyst. "They can expect an abundance of marketing
for smart grid deployment will become more of a near-term necessity."

Asia, Europe and the United States are the regions with the greatest revenue-generating opportunities for
suppliers of smart grid-enabling products. The highest spending on smart grid initiatives will occur in
these markets through 2015, with Japan and China accelerating their smart grid deployment more rapidly
than other countries.

The U.S.’s dramatic investment in smart grid products is attributed to the installation of smart sensors and
devices placed throughout consumer homes and office buildings. However, the smart grid-enabler
products industry is comprised of a wealth of other goods and technologies that have helped to fuel sales
in Asia and Europe. For instance, sensing and measuring devices continue to comprise more than half of
the market share and its estimated market size in 2010 is more than $47 billion, a 26% increase from
2009. And although it comprises the smallest market share of the five sectors, advanced components will
grow sales by nearly 53% to reach almost $3 billion in 2010.

Global Smart Grid-Enabling Products Market examines several products and technologies that will
either become components of the Smart Grid or will become ancillary support systems for the smart grid.
The various products that enable the smart grid have been envisioned by the U.S. Department of Energy
and fall into categories such as Transmission Automation, System Coordination and Assessment, System
Operations, and Distributed Generation and Storage. This report delves into the products that enable
these components to collaborate and form the basis of the smart grid system.

About SBI Energy
SBI Energy, a division of MarketResearch.com, publishes research reports in the industrial, energy,
building/construction, and automotive/transportation markets. SBI Energy also offers a full range of
custom research services.

Additional Materials

Blog posting: Growth Period Ahead for Smart Grid Products Companies

Suppliers of products that enable Smart Grid development and improvement are embarking on
substantial marketing campaigns in regions committed to Smart Grid overhaul. Product manufacturers will
likely see an abundance of opportunity develop through 2015 now that governments have laid plans for
grid improvements and utilities are securing funding to actualize those enhancements.

The suppliers of the tools and technologies required for Smart Grid deployment will become more of a
near-term necessity. Such products in high demand initially will be smart meters, interactive
telecommunications technology (such as broadband over powerlines), and decision support tools.

But Smart Grid-enabling products companies should be aware that countries upgrading their electricity
Smart Grids face many challenges during the first few years. Besides securing capital investment and
funding, other hurdles can inhibit the progress of Smart Grid development. Many Smart Grid efforts are
challenged by lack of resources, including trained personnel, advanced technology, industry research,
and support from the public and private sectors.

Asia, Europe and the U.S. are the regions with the greatest revenue-generating opportunities for
suppliers of Smart Grid-enabling products. The highest spending on Smart Grid initiatives will occur in

these markets through 2015 with Japan and China accelerating their Smart Grid deployment more rapidly
than other countries.

Obvious short-term beneficiaries of Smart Grid investment are infrastructure manufacturers that provide
the necessary compliant equipment and technologies. Additionally, companies specializing in the
manufacture of various Smart Grid components (such as smart meters and integrated communications
technologies) will enjoy strong demand for their products.


Blog posting: Smart Grid Market Size Grows

Many estimates of the Smart Grid products market size account for the myriad components that help
utilities maximize the potential of the grid and improve efficiency around electricity control. There is no
disputing that Smart Grid products traverse a multitude of manufacturing industries, including
telecommunications, utilities, and technology. Product market growth prospects differ, too, by geographic
region and manufacturing sector. SBI Energy estimates for the size of the Smart Grid market today and
how much it has grown since 2005 take into account the products available at the time and the pace at
which Smart Grid development is occurring.

Since 2005, SBI Energy estimates that the global Smart Grid products market size has grown from $25.5
billion to in excess of $69 billion in 2009 - a compounded annual growth rate (CAGR) of 22.1%. The cost
of fully deploying the Smart Grid is spread out differently by region. The U.S., for instance, has
accelerated spending on Smart Grid deployment at a much faster rate than Europe and Asia, although
Asia’s market share of spending on Smart Grid products has generally been twice that of the U.S.’s since
2005.

The market share distribution of Smart Grid-enabler products categories, in fact, is relatively stable since
2005 with much of the growth derived from sensing and measurement products. Sales from this category
will likely contribute the most to the global market’s 29.4% year-over-year increase in sales of nearly $90
billion for 2010.


Table of Contents

Countries upgrading their electricity Smart Grids face many challenges during the first few years. Besides
securing capital investment and funding, other hurdles can inhibit the progress of Smart Grid
development. Many Smart Grid efforts are challenged by lack of resources, including trained personnel,
advanced technology, industry research, and support from the public and private sectors. Suppliers of
products that enable Smart Grid development and improvement are embarking on substantial marketing
campaigns in regions committed to Smart Grids. They can expect an abundance of marketing
for Smart Grid deployment will become more of a near-term necessity. This report from SBI Energy
analyzes the burgeoning market of Smart Grid-enabling products - an industry that through 2015 will likely
reach $186 billion in market value worldwide.
Chapter 1: Executive Summary
The Smart Grid Defined
The Need for a Smart Grid
Aging Infrastructure
Smart Grid Technologies
Smart Grid Deployment
The Smart Grid-Enabling Products
Advanced Information and Control Products
Smart Meters
Home Energy Management Systems
Grid Visualization and Control
Phasor Measurement Units (PMUs)
Integrated Communications Products
Communications Technology
Power Line Communications
Broadband Over Power Lines
ZigBee
Sensing and Response Products
Demand Response
Smart Sensors
Challenges to Developing an EV Infrastructure
Advanced Components
Energy Storage
Microgrids
Advanced Flow Control Devices
Backup Generators and Distributed Generation Devices
Global Smart Grid Products Markets
Smart Grid Costs
Table 1-1: Global Smart Grid-Enabler Products Market Size, 2005 to 2009 (in $billions)
Figure 1-1: Global Share of Spending on Smart Grid-Enabling Products by Region
Table 1-2: Global Market Size and Share of Smart Grid-Enabler Products Categories, 2009 vs.
2010 (in $billions)
Asia Smart Grid-Enabler Products Market
Europe’s Smart Grid Market
Europe’s Plug-in Infrastructure
The U.S. Market for Smart Grid-Enabler Products
U.S. Smart Grid Spending
Factors Driving Future Growth
Figure 1-2: Global Market Forecast of Smart Grid-Enabler Products, 2010 to 2015 and Year-
Over-Year Percent Change (in $billions)
Technology Drivers
Transmission and Distribution Growth Factors

Figure 1-3: Europe Smart Grid-Enabling Products Spending Forecast, 2010 to 2015 (in $billions)
Factors Affecting Regional Spending
Table 1-3: European Smart Grid-Enabler Products Market Forecast, 2010 to 2015 (in $billions)
Government Incentives Drive Smart Grid Development
Smart Grid Research
Europe Plans EV Infrastructure Overhaul
Smart Grid Standards Development
China Releases Smart Grid Standards
Cyber Security Standards
Technical Challenges to Smart Grid Deployment
Chapter 2: Introduction
Scope of This Report
Methodology
The Smart Grid Defined
The Need for a Smart Grid
Figure 2-1: The Electric Grid Today
Table 2-1: World Consumption of Energy by Energy Types and Country Group (in Quadrillion
BTUs)
Table 2-2: Global Electricity Generation by Fuel Source (trillions of KWh), 2005 to 2030
Figure 2-2: Share of Electricity Generation by Source 2005, 2010 and 2015
Table 2-3: Growth Rates of Electricity Production by Source in OECD and non-OECD Regions,
2010 vs. 2015
Aging Infrastructure
Figure 2-3: Components of the Smart Grid
Smart Grid Technologies
Figure 2-4: Primary and Enabling Functions of the Smart Grid
Smart Grid Deployment
The Smart Grid-Enabling Products
Advanced Information and Control Products
Smart Meters
Home Energy Management Systems
Grid Visualization and Control
Phasor Measurement Units (PMUs)
Management Control Products
Integrated Communications Technologies and Products
Communications Technology
Table 2-4: Smart Grid Interactive Communications Technologies
Power Line Communications
Broadband over Power Lines
ZigBee
RF Mesh Networks
Z-Wave
Demand Response
Smart Sensors
Figure 2-5: Typical Smart Grid Connections and Components, Including Smart Meters
Challenges to Developing an EV Infrastructure
Table 2-5: Global Market Value of Smart Grid Manufacturing, PHEV vs. Non-Vehicle
Infrastructures, 2009 and 2015 (in $ billions)
Advanced Components
Energy Storage
Microgrids
Table 2-6: Advantages and Disadvantages of Energy Storage Technologies
Table 2-7: Characteristics of Microgrids
Grid-Tie Inverters
Advanced Flow Control Devices

Backup Generators and Distributed Generation Devices
Chapter 3: Market Size
Global Smart Grid Products Markets
Smart Grid Costs
Table 3-1: Global Smart Grid-Enabler Products Market Size, 2005 to 2009 (in $billions)
Figure 3-1: Global Share of Spending on Smart Grid-Enabling Products by Region
Table 3-2: Global Market Size and Share of Smart Grid-Enabler Products Categories, 2009 vs.
2010 (in $billions)
Table 3-3: Global Market Size and Market Share of Smart Grid-Enabler Products Subcategories,
2009 vs. 2010 (in $billions)
Table 3-4: Smart Grid Products Market Size Forecast by Region, 2010 to 2015
Table 3-5: Global Smart Grid-Enabler Products Market Size Forecast by Category, 2010 to 2015
($billions)
Table 3-6: Cumulative Spending on Smart Grid-Enabling Products by Region, 2010 through 2015
Figure 3-2: Cumulative Spending on Smart Grid-Enabling Products by Region, 2010 to 2015
Asia Smart Grid-Enabler Products Market
Europe’s Smart Grid Market
Europe’s Plug-in Infrastructure
Smart Grids in Germany
The U.S. Market for Smart Grid-Enabler Products
Figure 3-3: Share of Smart Grid Products Spending in the U.S. by Category, 2010 to 2015
U.S. Smart Grid Spending
Table 3-7: U.S. Smart Meter Deployments in 2010
Sizing of Future Smart Grid Products Markets
Projected Number of World Smart Meter Installations
Figure 3-4: Share of Smart Grid Products Spending in Europe by Category, 2010 to 2015
Figure 3-5: Global Shares of Electric Vehicle Infrastructure Manufacturing Sales from Asian-
based Companies, 2004, 2009 and 2014
Advanced Metering Infrastructure
Figure 3-6: Smart Grid-Enabler Products with Fastest CAGR Growth Forecast, 2010 to 2015
PMU Installations
Figure 3-7: Smart Grid-Enabler Products with Slowest CAGR Growth Forecast, 2010 to 2015
Communications Network Forecast
Demand Response Products
Figure 3-8: Smart Grid Sensing and Response Products Market Share by Region, 2010 to 2015
Factors Driving Future Growth
Figure 3-9: Global Market Forecast of Smart Grid-Enabler Products, 2010 to 2015 (in $billions)
Technology Drivers
Table 3-8: Global Forecast of Smart Grid-Enabler Products by Category, 2010 to 2015
Monitoring and Control Systems
Table 3-9: Global Market Share of Smart Grid-Enabler Products, 2010 vs. 2015
Transmission and Distribution Growth Factors
Figure 3-10: Europe Smart Grid-Enabling Products Spending Forecast, 2010 to 2015 (in $billions)
Communications Systems Growth
Factors Affecting Regional Spending
Table 3-10: European Smart Grid-Enabler Products Market Forecast, 2010 to 2015 (in $billions)
Table 3-11: U.S. Smart Grid-Enabler Products Market Forecast (in $billions) by Category, 2010 to
2015
Figure 3-11: Asia Smart Grid-Enabling Products Market Forecast, 2010 to 2015 (in $billions)
Table 3-12: Smart Grid Spending, by Country, 2010 vs. 2015 (in $billions)
Table 3-13: Smart Grid Spending Growth by Products Sector and Country, 2010 to 2015 (in $
billions)
Figure 3-12: Share of Spending on Smart Grid-Enabling Products in China, 2010 vs. 2015
Chapter 4: Competitive Profiles
Itron, Inc

Overview
Significant Developments
Figure 4-1: Itron Sales and Year-Over-Year Percent Change, 2006 to 2010 (in $billions)
Landis + Gyr
Overview
Recent Developments
Echelon Corp
Overview
Figure 4-2: Echelon Sales and Year-Over-Year Percent Change, 2006 to 2010 (in $millions)
Silver Spring Network
Overview
Trilliant
Overview
EnerNOC
Overview
Figure 4-3: EnerNOC Sales Distribution by Smart Grid-Enabler Product Type, 2008 to 2010
GridPoint
Overview
Cisco Systems
Overview
Figure 4-4: Cisco Sales and Year-Over-Year Percent Change, 2006 to 2010 (e)
General Electric
Overview
Figure 4-5: Share of General Electric Revenue for 2010 (e), by GE Business Unit (in $ billions)
Adtran
Overview
Figure 4-6: Adtran Sales and Year-Over-Year Percent Change, 2006 to 2010 (e)
Ambient
Overview
Nlyte Software
Overview
Telvent
Overview
Figure 4-7: Telvent Share of Sales by Business Unit, 2010 (e)
Tropos Networks
Overview
Chapter 5: Market Challenges
Government Incentives Drive Smart Grid Development
Stimulus Funding
Table 5-1: U.S. Government Stimulus Funding for Smart Grid Initiatives, by State
Stimulus Funds Help with EV Infrastructure Development
Table 5-2: U.S. Government Funding of EV and Non-EV Infrastructure Development (in $
millions)
Figure 5-1: Value of U.S. Smart Grid Projects and Portion Funded by U.S. Government (in
$millions)
Battery Projects Get Government Funding
Smart Grid Research
R&D on Smart Grid Infrastructure
Table 5-3: Global Market Value of Smart Grid Manufacturing, PHEV vs. Non-Vehicle
Infrastructures, 2009 and 2014 (in $ billions)
EV Charging Stations on the Grid
Table 5-4: Planned U.S. Smart Grid-Enabled Charging Stations for Electric Vehicles
Table 5-5: Number of U.S. Charging Stations by State
Table 5-6: Number of U.S. Fueling Stations by Alternative Fuel Type, 2004 to 2010
Europe Plans EV Infrastructure Overhaul
Smart Grid Standards Development

China Releases Smart Grid Standards
Cyber Security Standards
Technical Challenges to Smart Grid Deployment
Britain Deploys Smart Grid Monitoring System
Consumer Perception and Acceptance
Smart Grid and Consumer Privacy
Consumer Education of Smart Grid Benefits
Figure 5-2: Reasons Americans Would Use a Smart Grid-enabled Device (as % of total
respondents)
Utility Companies Deploy Smart Grid Technologies
Figure 5-3: Percent of Respondents by Region Who Think Smart Grid Technologies Are
Sufficient Enough To Address Future Challenges
Consumers Happy with Smart Grid Technology
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