Smart grid market to reach $200 billion by 2015

Upgrading of the primary electrical distribution infrastructure will drive the majority of smart grid spending in the next five years, according to energy consultancy and research firm Pike Research.

According to the report (executive summary here), government and industry attention to the smart grid opportunity will drive global spending of $200 billion through 2015.

That spending, according to Pike Research managing director Clint Wheelock, will focus mainly on grid infrastructure projects like transmission upgrades, substation automation and distribution automation. That core infrastructure investment will account for almost 84% of smart grid spending, followed by 14% for advanced metering infrastructure and 2% for electric vehicle management systems.

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“Smart meters are currently the highest-profile component of the Smart Grid, but they are really just the tip of the iceberg,” Wheelock said in a statement.

Smart meters represent a “connected home”-type opportunity for telecom service providers, but for telecom vendors, the infrastructure play is the thing, with IP-based network technologies helping to provide the network intelligence for tomorrow’s smart grids. For instance, Adtran recently added smart grid compliance to its optical platform – instantly opening up a new market for an existing piece of network gear.

The Pike Research report predicts that smart grid investment will peak in 2013 following several years of a significant government push. After that, it will represent a smaller, but “still very substantial market,” the firm noted.