Smart Grid Spending To Plateau at $35 Billion in 3 Years


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The smart grid has been a lumbering but steady and inevitable presence in the utility industry, with a speedy uptake in the number of start-ups interested in creating everything from energy storage technology to user dashboards for home energy consumption and a somewhat slower uptake in the number of smart grid pilot projects popping up nationwide. Less than two years ago it was expected to grow to at least $65 billion by 2013. Cisco has identified at least $20 billion in potential business opportunities around the grid, which the company says will be bigger than the Internet, and $3.4 billion of stimulus money was to be dished out to 100 projects. So why the projection from Pike Research that the spending will top off at $35 billion by 2013?Pike Research reports that the efforts by governments, utilities and industry bodies to form a new energy-savvy smart grid is going to cause a big push in smart grid spending. While it will boom from $10.5 billion in 2009 to an estimated high point of $35.8 billion in 2013, the upswing will slow, though the industry as a whole will stay stable.

"What we now call 'Smart Grid' has actually been a substantial global utility automation industry for years," says senior analyst Bob Gohn. "The current surge in Smart Grid activity has been primarily driven by government initiatives, and naturally this adrenaline boost will wear off in the next few years. We forecast that the Smart Grid market will decline at an average rate of 6% per year after 2013, but it will still be a huge business compared to what we have seen in the past."

In total, Pike Research estimates that between 2008 and 2015, spending on smart grid infrastructure will amount to around $200 billion worldwide.

Despite the projected plateau in smart grid spending, spending on electrical grid infrastructure is expected to balloon, with investments exceeding $600 billion globally by 2020 on improvements of existing lines and additional development.

While the numbers fluctuate depending on who you talk to, there's no denying that the smart grid is going to attract some serious investments over the next few years. Still, when we'll see a fully connected smart grid across the US is anyone's guess.

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Tags: Economics | Electricity | Electronics