- Emerging markets have $64.7 billion in annual losses
- Former Soviet Union seen as area prime for investment
- Smart grid security poses problem
Smart grids are generally concentrated in the developed nations of North America, Western Europe, and East Asia and represent more than 75% of installed smart meters, according to Northeast Group. These nations also have the majority of smart-grid initiatives, automated distribution, home energy management, and analytics.
Emerging-market nations incur $64.7 billion annually in unbilled revenue and aggregate loss. These nations would see the most benefit from investing in a smart-grid infrastructure.
In the Eurasia region, there already are smart meters installed, especially in Russia and Ukraine. Instillation has been boosted by the affordability of local vendors.
The 12 former Soviet countries that are not currently members of the European Union share several key characteristics. Prior to 1991, they shared an interconnected power grid and a legacy of inefficient power usage. Electricity transmission and distribution losses are high, in some cases greater than 20%.
In Russia and Ukraine, the installation of smart meters has reduced losses.
Eurasian countries have the highest energy intensity of any emerging market, and in the past decade most have passed energy-efficiency laws although none have passed meaningful smart-grid regulations, and both renewable-energy and energy-efficiency regulations are still in their infancy.
Corruption in Eurasian countries is extremely high with most falling in the bottom quartile of Transparency International’s Corruption Perceptions Index. Nonetheless, conditions in the region are ripe to drive investment in all but the most challenging markets.
Northeast Group forecasts that by 2026, Eurasia’s smart grid will be comparable to that of Central and Eastern Europe. However, in total market size among emerging market regions, it will be behind China, India, and Latin America.
Smart Grids Insecure
Smart-grid infrastructures present nations with many advantages, but they also have one major disadvantage – security.
According to a recent report by the U.S. Energy Department, “Cyber threats to the electricity system are increasing in sophistication, magnitude, and frequency. The current cybersecurity landscape is characterized by rapidly evolving threats and vulnerabilities, juxtaposed against the slower-moving deployment of defense measures.”
Customers increasingly are seeking a seamless integration of appliances and other smart devices. These systems, however, are vulnerable to attack because they are a two-way distribution of not only electricity but data.
Both the public and private sectors need to be prepared for long-term power outages. The U.S. Department of Homeland Security has a infrastructure protection plan in place.
According to the government, the plan “provides a clear call to action to leverage partnerships, innovate for risk management, and focus on outcomes.”
- Globally, 40% of nations are prepared to make a significant investment in smart-grid infrastructure.
- Smart metering will follow smart-grid initiatives. The second largest segment will be distribution automation. From 2017 to 2027 the market value will be $51 billion.
- By 2027, smart-meter penetration rate is forecasted to reach 74%.