Smart grids projects on the increase with utilities

Gordon Peters
Monday, 04 October 2010 01:52

Business IT - Technology

Australia's smart grid market is at an evolutionary stage, with many utilities considering smart grids at the same time as trying to validate the usefulness of different smart grid technologies and understand the business case for smart grids.

This assessment by analysts, Frost & Sullivan, is on the back of its latest survey of the market which reveals that there are $200 million worth of smart grid pilot projects in operation or about to start in Australia with most focusing on the potential for smart meters and demand management. 

According to the firm, much of the current activity is being driven by government mandates that will see the roll out of nearly eight million smart meters across Australia, representing an investment of nearly US$2.1 million by 2015.  Frost & Sullivan consultant, Rajat Gupta, says these projects are a 'crucial opportunity for ICT and IT services vendors to build partnerships with utilities and other stakeholders in the near term and to establish credibility in delivering smart grid solutions.'

'In any emerging market, making the right technology investment means selecting systems that will be sustained and supported by the industry in the years to come,' Gupta says, adding that 'in the smart grid market, where investments are valued in the tens and hundreds of millions of dollars, utilities are still figuring it out what those systems will be.  Therefore the challenge and the opportunity for ICT vendors is to get in early, forge partnerships with the utilities and start ensuring that their solutions become part of the long term future of the power companies.'

The Frost & Sullivan study estimates that Australia's first full scale smart grid rollout is likely to occur around 2013 as the results from initial pilot programs start to become available.  The pace of rollouts of different smart grid technologies is expected to significantly vary, the firm says, depending on the validation of business cases, but overall investment is predicted to rise to between US$4.6 billion and US$6.1 billion by 2015.

According to Frost & Sullivan, due to the complexity of the solutions involved in smart grid projects, IT services are expected to play a key role in smart grid implementation, and significant expenditure is anticipated in the areas of outsourcing, systems integration and professional services, support and maintenance.

'Within the ICT sector, key spending trends will include the development of networking infrastructures for advanced metering projects, and millions of dollars for each project requiring an overhaul of supervisory control and data acquisition (SCADA), meter data management (MDM) and geographic information systems (GIS). Likely areas of investment within the next few years are MDM systems, GIS software, networks and system integration,' Gupta says.

Gupta also cautions that lack of standardisation and concern over choosing the most appropriate technology that will deliver in the short and longer terms are the major technology challenges facing smart grid projects today, with utilities laying significant emphasis on the technologies being implementable, scalable and capable of integrating with futuristic demands.

Within the Asia Pacific region, Frost & Sullivan says that other countries moving towards smart grid adoption include New Zealand, South Korea, Singapore, Taiwan and China, with the developing countries of South East Asia, such as Malaysia, Indonesia and the Philippines expected to monitor the experiences of other countries and assess the relevance of smart grid in local context before they decide to deploy smart grids.