European smart electricity market to reach $25bn by 2020, report says

The smart electricity market in the European Union is expected to expand rapidly in coming years, according to a report by Greenbang, an independent sustainability research house, which sees the meter market hitting between $24bn and $26bn by 2020

Government initiatives, growing demand for energy, and rising oil prices are all expected to result in between 133m to 145m new smart meters being installed by the end of the decade. Recently the EU set the target of installing smart meters in 80 per cent of households by 2020.

The report stated:

The top countries for this market will probably be those that haven’t yet implemented smart metering on any meaningful scale: Germany, the UK and Poland. France and Spain are also set to make a significant impact in the next few years, with announced projects already in the
early stages.

It is estimated that only about 53m smart meters are currently installed across Europe.

The UK has trumped the EU target, and is striving for 100 per cent coverage. Recently, Chris Huhne, the country’s energy secretary, outlined initial plans to roll-out smart meters across the UK as part of the government’s upcoming overhaul of the power system.

A key driver is the changing nature of the energy supply as renewable sources, like wind and solar energy, play a bigger part. These, however, are intermittent by their nature, and will require the kind of complex management that smart meters provide.

In 2008, for example, utilities in Texas were able to keep the lights on even when low winds reduced turbine output to near nothing … because smart demand response enabled them to automatically and temporarily reduce energy consumption by devices like refrigerators that don’t require continuous power to function.

The number of players in the market is large and it remains to be seen which companies will become dominant as the market grows and matures. Echelon, a California-based company, is cited by the report as the most influential. It has worked with Enel Spa on the largest metering project to date – 27m units installed in Italy between 2000 and 2005. Enel is currently planning a 13m roll-out in Spain.

Switzerland-based Landis+Gyr is also a key player. It has partnered with EDF on project Linky, aiming to install 35m smart meters in France between 2012 and 2017. In the UK it is working with British Gas. Landis is also leading the drive for interoperability standards across the industry.

Sentec is expected by the reports authors to grow significantly as the UK launches its massive smart meter roll-out. The Cambridge, UK-based company, has a working partnership with the National Grid, one of the country’s biggest utility groups.

The obstacles to adoption are the standard problems faced by many new technologies, namely cost, a lack of standards and initial resistance by consumers. Ultimately, the report says, the cost burden will have to fall on the households who have the new technology installed.

If the capital needed to realise these projects spurs wider adoption of the smart meter technology, it seems the EU is likely to have a very different energy infrastructure in 2020 to the one it has now.

A paid-for version of the report is available on the Greenbang website.

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