Global investments in smart grids rose 7% to $13.9 billion in 2012, with the US and China accounting for almost half of that, according to data from Bloomberg New Energy Finance (BNEF).
The US was single biggest regional market, where utilities spent $4.3 billion last year on advanced metering, distribution automation, demand response, home energy management technologies and smart electric vehicle charging installations.
That actually represents a decrease from 2011, but China is picking up the slack.
During 2012, China’s smart grid investments rose to $3.2 billion (from $2.8 billion the previous year), mainly because of a big national smart metering project undertaken by State Grid.
Indeed, 2013 could be the year when China becomes largest smart grid market, because many stimulus-funded projects in the US are drawing to a close, says BNEF.
The entire Asian region is becoming a much bigger factor. Smart grid investments there reached $5.6 billion last year, with new initiatives starting in Japan, India and Korea.
Spending in Europe was relatively modest at $1.4 billion, up from $1.1 billion in 2011. The future looks brighter. Activity is expected to pick up after 2014, with countries such as France and UK scheduled to begin major deployments.
Latin America remains a budding market for smart grid technology, with just $400 million spent there last year, although Brazil appears poised to begin larger investments.
“Growth in the smart grid industry remains strong," says Albert Cheung, practice head of energy smart technologies at BNEF. "Asia and Europe will be responsible for the greatest spending increases between 2013 and 2018. Utilities, policy-makers and regulators are increasingly aware of the economic, environmental and reliability benefits of smart grid technologies. These enable consumers to make better-informed choices about how they use energy. They also improve the reliability of the grid and allow it to integrate larger amounts of intermittent and distributed renewable power."
Global smart grid spending should reach $25.2 billion by 2018, predicts BNEF. That represents a compound annual growth rate of about 10.4%, off slightly from previous forecasts.
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