Smart grids are a highly sophisticated way of achieving efficiency and reliability in power distribution. At present, the power distribution network in most regions has a significant supply-demand gap, due to the steadily rising demand for electricity. This gap is most prominent in Asia Pacific, where the combination of a rapidly rising population, rising standard of living, and inefficiency in power generation and distribution has led to the demand for supplementary power and the means to eliminate the wastage of power during distribution.
The high efficiency of power distribution achieved through smart grids is the major driver impacting the global smart grid market. According to a report released recently by Transparency Market Research, the global smart grid market is expected to exhibit an 18.2% CAGR from 2013 to 2019. The market’s value at the end of this forecast period is expected to be US$118.1 bn.
Due to its high population, rapid urbanization and industrialization, and increasing living standards, India is a crucial regional segment of the global smart grids market. Despite its dynamic economy, power distribution in India is far from perfect and blackouts are frequent in much of the country. To turn this situation around, the Indian power ministry initiated a consortium of electricity utilities companies, investors, smart grid and smart city experts, called the India Smart Grid Week (ISGW), in 2015. The second edition of the ISGW, conducted recently in New Delhi, saw several promising developments, with U.K.-based companies, in particular, making their presence felt.
The support given by Indian PM Narendra Modi to the development of smart cities is also favorable for the country’s smart grid market. The two-way information sharing in smart grids will allow for fair and well-regulated electricity distribution, resulting in fewer blackouts and lowering of the overall supply-demand gap in the same. Smart grids would also make power supply more cost-effective.
One of the major restraints on the global smart grid market is the difficulty in incorporating smart grid infrastructure into existing power distribution means. The difficulty in incorporating electricity gained from renewable resources, the generation of which is rising at a rapid pace, has also constrained the modernization of power distribution infrastructure.
An all-European coalition of energy specialists and research institutes has recently come together to attempt to solve just this problem. Called ERIGrid, the project was announced in early March, despite having begun in November last year. This project is headed by the Austrian Institute of Technology and includes renowned research centers such as the University of Strathclyde, the European Distributed Energy Resources Laboratories, and the Centre for Renewable Energy Sources and Savings. ERIGrid will look into the various way to develop an overarching smart grid system that can also manage significant influx of renewable energy.