Smart Grid Market Analysis China - China - Size and Forecast 2024-2028

China Smart Grid Market Size 2024-2028

The China Smart Grid Market size is forecast to increase by USD 25.85 billion, at a CAGR of 20.65% between 2023 and 2028. Market growth hinges on various factors, notably the widespread transition to smart grid systems, stringent government regulations aimed at curbing carbon emissions, and the swift uptake of smart grid technology. The shift towards smart grids signifies a fundamental evolution in energy infrastructure, enabling enhanced efficiency, reliability, and sustainability. Additionally, government-imposed regulations to mitigate carbon emissions drive investment in cleaner energy solutions, further propelling market expansion. Moreover, the rapid adoption of smart grid technology underscores industry recognition of its transformative potential in modernizing energy distribution and management systems. These interconnected factors collectively drive innovation and investment in the smart grid market, positioning it as a key enabler of sustainable energy solutions in the transition towards a greener future.

What will be the size of the Market During the Forecast Period?

Market Forecast 2024-2028

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Market Dynamics

The market emerges as a beacon of innovation amid aging grid infrastructure, championing advancements in IoT and ICT. Collaborations with entities like the Department of Energy and Ministry of Power drive the evolution towards smart cities and digital electricity infrastructure. With a focus on ROI and energy efficiency, smart grids integrate fault detection and self-healing mechanisms, ensuring reliable power distribution on product Lines. Net Energy Metering Protocols facilitate seamless integration of renewable energy sources, contributing to carbon emission reduction. Smart grid technologies enhance the efficiency and reliability of electrical systems by integrating advanced circuit breakers, which help manage and protect the grid from overloads and faults. Through smart grid components and software segments, the market redefines wired infrastructure, ushering in an era of efficiency and sustainability in energy distribution. Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market. A holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.

Key Market Driver

Transition to smart grids is a major driver for the growth of the market during the forecast period. Generally, a smart grid is an integrated network that connects all the power network assets, namely generation, transmission, distribution, and consumption. A main feature of a smart grid includes its ability to generate large volumes of data. Furthermore, in China, the power utility sector is undergoing a major change from a rigid structure to a more flexible system, which is driven by climate change policies, urbanization, and technological breakthroughs. 

Such a paradigm shift in the power sector is achieved by the deployment of advanced metering infrastructure (AMI) and supervisory control and data acquisition (SCADA) systems. This ensures the integration of smart technologies into the grid, thereby enabling utilities to have greater control over the functioning of the grid. Hence, owing to the advantages of smart grids, it is anticipated that the Smart Grid Market in China is expected to grow positively during the forecast period.

Significant Market Trends

A major trend in the market that is expected to influence the growth of the market is the growing demand for energy and cost-efficiency. The high population in China and the consequent increase in demand for energy leads to a rise in pressure on utility companies. Moreover, utility companies such as China Yangtze Power Co., Ltd. are continuously striving to strike a balance between demand and supply without the cost being affected. In order to maintain this balance, utility companies are deploying smart grids to increase operational and overall cost efficiency.

Furthermore, the need for technologies and solutions that help in proper asset monitoring and control, and optimal energy consumption is rising. Energy management and outage management are some of the areas that require adequate systems to maintain operational efficiency. Hence, such trends fuel the growth of the market during the forecast period.

Major Market Challenge

High implementation costs challenge the growth of the market during the forecast period. The high cost directly impacts the companies and hinders them from focusing to adopt and implement new technologies to improve distribution operations and productivity. To make the smart grid more seamless, a high level of integration is required, which is expected to increase the cost further, which in turn, negatively impacts the market in focus during the forecast period.

Additionally, the operation and maintenance costs associated with new technologies after implementation are also significant. Such additional expenses can be considerable for utility companies and should be factored into the budget. Various companies with a limited financial budget for IT spending face a major challenge because of the increasing costs of the smart grid. Hence, the high implementation cost of the smart grid is expected to hamper the growth of the market in focus during the forecast period.

Market Segmentation 

By Application 

The market share growth by the smart T&D equipment segment is significant during the forecast period. Smart transmission and distribution (T&D) equipment is undergoing a transition with the introduction of digital technologies into the grid. The segment is majorly driven by the need for efficiency and improved reliability, and the integration of diverse power generation sources. 

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The smart T&D equipment segment was estimated to account for USD 3.73 billion in 2018. The traditional grid was designed to manage continuous power from sources like coal, however, countries such as China focus on newer alternative sources of power generation, which are also intermittent. This, in turn, harnesses the full potential of renewable power, and providing a continuous power supply requires utilities to have a flexible power supply system. Hence, such factors are expected to drive the segment and, in turn, the market during the forecast period.

By End-User 

The market has been divided into four end-user segments: utility, industrial, commercial, and residential. Among these, the utility segment holds the largest share. The power industry's driving factors include the need to control harmful emissions and the adoption of smart grids. In China, the availability of smart home devices and real-time power consumption information encourages consumers to actively engage with the grid functions. The increasing adoption of energy management devices and consumer engagement helps utilities manage peak hour demand at the consumer level. As a result, utilities are partnering with smart grid technologies to offer bundled services that cater to automation and energy conservation needs. This trend is expected to drive the utility segment and the overall market during the forecast period.

Who are the Major Market Players?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• McKinsey and Co. - The company offers smart grids for power solutions.
• Siemens AG - The company offers smart grids such as Xcelerator for power utilities.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:

• ABB Ltd.
• Cisco Systems Inc.
• General Electric Co.
• Huawei Technologies Co. Ltd.
• International Business Machines Corp.
• KPMG International Ltd.
• McKinsey and Co.
• Shenzhen Clou Electronics Co.
• Siemens AG
• Silicon Laboratories Inc.
• ZTE Corp.

Technavio market forecasting report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments

• Application Outlook
  • Smart T&D equipment
  • Communication and wireless infrastructure
  • Software and hardware
  • Sensors
  • Others

• End-user Outlook 
  • Utility
  • Industrial
  • Commercial
  • Residential

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Market Analyst Overview

In the dynamic landscape of energy distribution, the market leads the charge with innovative solutions spanning the software segment and distribution segment infrastructure. Leveraging wireless communication technology and partnerships with industry leaders like Siemens Energy, smart grids optimize electricity-producing energy transmission and consumption segment. From smart meters to electric vehicle chargers, the market addresses challenges like irregular power supply, particularly in rural areas. With strategic activities and contractual agreements, companies like Russelectric embrace digital automation and EcoStruxure platforms, enhancing efficiency and reliability in the transmission segment. As hybrid and electric vehicles become mainstream, smart power grids pave the way for a sustainable energy future, revolutionizing how electricity is generated, distributed, and consumed.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across China
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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