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The Global Smart Grid IT Systems Market size is estimated to grow by USD 19.38 billion, at a CAGR of 15.78% between 2022 and 2027. Key market drivers include the escalating demand for energy and cost efficiency, spurred by the swift adoption of smart grid technology and stringent governmental regulations aimed at curbing carbon emissions. However, challenges like the absence of standardization may impede market expansion. Despite this, industry players are strategically addressing opportunities such as the increasing utilization of smart devices and applications, which are anticipated to drive market growth further. By leveraging these opportunities, stakeholders aim to not only overcome existing obstacles but also to capitalize on emerging trends, thereby fueling the continued progression of the market. This proactive approach towards innovation and adaptation underscores the resilience and dynamism of the market, positioning it for sustained growth amidst evolving consumer needs and regulatory landscapes.
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The market is rapidly evolving with advancements in digital communication technologies and integrated communications. It encompasses a range of solutions, including smart power meters, smart substations, and smart grid meters, to enhance electrical power management and distribution. As wind turbines and solar power systems become more prevalent, the need for intelligent appliances and distributed sources is rising. With security concerns and emergency situations in mind, protective management solutions are critical for ensuring the power quality and reliability of the electrical network in smart cities and beyond.
This market research report extensively covers market segmentation by application (EMS, DMS, OMS, and data analytics), end-user (residential, commercial, and industrial), and geography (Europe, APAC, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
The EMS segment will contribute a major share of the market. It is a set of devices installed in residential buildings to enable the provision of feedback on electricity consumption, patterns, and power consumption data for individual appliances. Additionally, this system carries out pre-programmed tasks like maintaining a home's temperature. The utility service provider receives demand-response prompts from EMS about the load generated by microgrids. The users receive the generated data. They can view their patterns of energy use and evaluate them against earlier data.
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The EMS segment showed a gradual increase in market share with USD 3.82 billion in 2017. The EMS segment is being driven by the increase in electricity costs over the past ten years as well as increased global pressure to improve energy efficiency. The sensors included in EMS can detect movement within and around the premises, improve energy efficiency, and warn customers about suspicious activity. Customers' concerns about safety and security are addressed by this. New players are entering the EMS market and establishing their market presence with cutting-edge product offerings. These companies concentrate on producing goods with cutting-edge capabilities. Thus, the segment is predicted to grow rapidly during the forecast period.
Schools, hospitals, restaurants, and shopping malls are examples of commercial buildings that use a lot of electricity. Because of this, using smart meters is required to ensure energy savings. In the upcoming years, the commercial segment of the global market is anticipated to experience significant growth, driven primarily by rising power thefts and meter tampering. As a result, such grid IT systems are being installed in shops, malls, and other commercial spaces all over the world as a solution to these problems. In order to track patterns of electricity consumption, many commercial and industrial buildings are implementing intelligent grid IT systems and networks. This helps them plan their power usage by identifying potential cost-saving areas. Smart meters not only offer cost-saving benefits but also aid in electricity conservation, thus helping commercial buildings earn environmental ratings, such as the Leadership in Energy and Environmental Design (LEED) certification, which improves their social/brand image and outlook. Such factors are expected to drive the growth of the commercial segment of the market during the forecast period.
Europe is estimated to contribute 36% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.
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Europe's power market is already oversupplied with companies meeting the needs of the population. In comparison to APAC nations, where power losses during transmission are roughly 20%, the European Union (EU) countries have been able to limit power losses during transmission to a lower level. Smart grid initiatives in Europe are anticipated to be influenced by climate change policies like The Paris Climate Agreement, which aims to lower carbon emissions in the area. The need to reduce the carbon footprint and the requirement to ensure a smooth transition to renewable sources of energy are expected to drive the growth of the market in Europe during the forecast period.
New blueprints are being unveiled in some countries in the region for smart grid development. The European Commission announced the Danube InGrid project in the smart grid category in July 2022. The goal of the Danube InGrid project is to promote connection and integration between Slovak and Hungarian power markets. The project will implement smart grid technologies on a domestic and international level to advance contemporary energy infrastructure. Such initiatives by electric utility companies are expected to accelerate the growth of the smart grid IT systems market in the region during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market forecast report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
In the market, superconducting cables and isolated technologies play pivotal roles in modernizing transmission networks. As electric utilities grapple with aging grid infrastructure and emergency situations, there's a growing demand for critical solutions to ensure reliable power supply, especially with the growing population. The Smart grid industry is leveraging IoT (Internet of Things) technology, attracting interest from technology companies and utility service providers alike, all aiming to enhance efficiency and resilience in the energy sector. Our researchers studied the data for years, with 2022 as the base year and 2023 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.
The growing demand for energy and cost-efficiency is notably driving market growth. There is more pressure on utility companies as a result of the expanding global population and the resulting rise in energy demand. Utility companies are constantly working to balance supply and demand while maintaining reasonable prices. Utility companies are therefore implementing smart grid IT systems to boost operational and overall cost efficiency in order to maintain this balance.
As a result, the demand for smart grid IT systems is rising because they offer a number of benefits, including improving product quality through real-time monitoring and communication. These benefits include better cost-efficient options and reduced power consumption. Different independent systems can be integrated into a single platform using smart grid IT systems, greatly increasing operational efficiency and lowering overall costs. Hence, such factors are expected to drive the growth of the global market during the forecast period.
The growing use of smart devices and applications by utility companies is an emerging trend in the market. Utilities can easily and quickly prevent, recognize, and fix grid-related issues due to the extensive deployment of communication devices. These connected devices support advanced distribution network applications like isolation and service restoration, conservation voltage reduction (CVR), fault location, and DER management. By enabling utilities to deploy hierarchical automation programs to enhance peer-to-peer communications at the grid edge, these devices enable flexibility in communication within the infrastructure. Intelligent automation controllers at the substation or smart grid IT systems at the control center can be used to position these capabilities.
Further, a dynamic optimization at the grid edge, improved restorative capabilities for prompt outage management, and proper service coordination between utilities and third-party providers could all be made possible by the quick spread of smart devices and applications. Therefore, there will be a huge need for proper controlling and monitoring as more smart devices and applications are integrated into the grid infrastructure, which will increase the demand for smart grid IT systems and the scope of smart grid IT systems applications. Such factors will boost the global market growth during the forecast period.
Lack of standardization is a major challenge impeding market growth. The gap between the interoperability of different power systems has grown due to the general lack of standardization within a grid network. The main server is connected to a number of interconnected systems that make up smart grids. This system integration widens the gap between networking systems, which has an impact on the grid's overall functionality. Systems that are interoperable have not yet been deployed by utilities. Thus, utilities face a significant challenge in implementing security standards across various networking systems.
Additionally, technologies that adhere to various standards, such as those set by the Standards Developing Organizations (SDOs), industry user group standards, and proprietary standards, promise varying levels of performance, security, affordability, and development. These disparities in standards lead to a significant mismatch in system compatibilities and restrain the global market for smart grid IT systems. Thus, a lack of standardization is expected to hinder the growth of the market during the forecast period.
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.
We also have detailed analyses of the market’s competitive landscape and offer information on 15 market compaies, including:
Technavio 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.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments
In the market, addressing emergency situation is crucial for power providers. Switching functions and volatile network management are essential to ensure smooth generation and distribution, facilitated by Smart Grid Distribution Management and Smart Grid Network Management solutions. With a focus on Smart Grid Communications and Smart Grid Security, the industry aims to fortify electrical supply against power outages and blackouts, especially as renewable energy sources and electric vehicles are integrated into the grid. The rise of distributed energy resources and the electric vehicle market drives the need for two-way communication and smart grid systems to enable low-carbon transportation. Consulting service providers offer expertise in energy conservation, data management, and analytical solutions, while Internet access and data centers support big data solutions and wireless communication for robust energy storage systems provided by energy providers.
Market Scope |
|
Report Coverage |
Details |
Page number |
185 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 15.78% |
Market growth 2023-2027 |
USD 19.38 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
14.65 |
Regional analysis |
Europe, APAC, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 36% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Cisco Systems Inc., Eaton Corp. Plc, ENEL X srl, General Electric Co., Globema SP Z O O, Honeywell International Inc., International Business Machines Corp., Itron Inc., Kamstrup AS, Mitsubishi Electric Corp., Oracle Corp., SAP SE, Schneider Electric SE, Siemens AG, TANTALUS SYSTEM HOLDING INC., Tech Mahindra Ltd., Trilliant Holdings Inc., Wipro Ltd., and Xylem Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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