Smart Grids™ Ability to Simplify Distributed Generation Encourages its Installation in Asia-Pacific

The smart grids market in Asia-Pacific got a huge boost from the roll-outs of advanced metering infrastructure (AMI) in Australasia and Smart City projects in North Asia. The market can expect higher revenue inflow with the rising popularity of Demand response systems and energy management system (EMS) installations as well as Southeast Asia desire to switch to smart grids.

New analysis from Frost & Sullivan, Asia-Pacific Smart Grids Market Overview, found that the market earned approximately US$5.40 billion in 2012 and estimates this to reach US$15.83 billion in 2018.

The increased generation of renewable energy creates snags in the transfer of power over an already stressed network. This highlights the need for smart distribution control and management systems, which can better maintain power grid reliability and stability.

Smart grid projects in South Korea, Singapore and Japan are testing the feasibility of distributed generation using photovoltaics, biomass, wind energy and electrical vehicle charging, in addition to AMI, EMS in homes and buildings. In fact, the use of AMI and HEMS in Jeju, South Korea has demonstrated the devices ability to reduce energy usage in homes.

Significant M&A and joint ventures in the market ensure advanced product offerings, which will drive market growth said Frost & Sullivan Energy & Environmental Research Analyst Avanthika Satheesh P. Besides, the need to replace aging equipment in the power grid and utilities awareness of the benefits of smart equipment and automation systems further enhance the markets potential.

Countries such as Japan and South Korea expect electric vehicles (EVs) to comprise 20% of the total vehicles on the road by 2030. However, EV charging is an additional load on the power grid, especially during peak hours.

A smart grid is a viable solution to the transmission and distribution (T&D) issue, as it can identify the peak-load hours and appreciate off-peak charging of the vehicles. Besides, vehicle-to-grid and vehicle-to-home technology has added advantages when implemented along with a smart grid.

Despite its obvious benefits, the smart grid market is pegged back by its high cost of implementation, lack of standardization, and security concerns. For instance, in Australia, there were protests against the home installations of the higher priced smart meters instead of the conventional energy meters. Further, there were security concerns, as hackers could tamper with the energy usage data.

Utilities have to assuage these valid end-user concerns by educating customers about AMI and demand response systems, and highlighting the benefits of installing a smart meter. Original equipment manufacturers (OEMs) can also help increase the adoption of smart meters by reducing their costs.

The OEMs, utilities and customers play equally important roles in shifting from a conventional grid to a smart grid, noted Satheesh. The markets prospects appear bright, as countries in the Asia-Pacific are likely to undertake large-scale projects over the next six years.