Smart grid technologies are often portrayed as being vital in efforts to increase renewable energy production, yet this aspect of the smart grid is the least developed. According to a new report from Pike Research, this situation will change over the next several years, creating a significant expansion of the market opportunity for smart grid technologies that enable the integration of renewable energy.
Revenue from smart grid renewables integration will reach almost $4 billion in 2012, the cleantech market intelligence firm forecasts, and climb to $13 billion by 2018. The sector's compound annual growth rate (CAGR) over those six years will be nearly 23%, says Pike Research (Boulder, Colo., USA).
"The success record of smart grid renewables integration to date is a mixed bag," says senior analyst Peter Asmus. "European countries are boldly plowing forward while many U.S. utilities exhibit 'electrotrophobia' -- the fear of change linked to greater reliance upon intermittent renewable energy resources.”
According to Asmus, this will change as many utilities launch comprehensive programs and place investments in the ability of the smart grid to lower the costs of integrating renewable generation at the transmission, distribution, and residential levels.
The leading technology in terms of smart grid renewables integration market revenue in 2012 is microgrids, which will capture more than $3 billion, or 81% of the total pie, says Pike Research . Remote microgrids will represent approximately 92% of this total, a reflection of the challenges of integrating distributed solar and wind in regions of the world where a reliable utility power grid is lacking. In 2018 microgrids will continue to lead the market, with 77% of total worldwide revenue.
Breaking out the smart grid renewables integration technologies forecasts on a regional basis, the Asia-Pacific region shows the most market activity. Revenue in that region will increase from over $1 billion in 2012 to almost $5 billion in 2018. Second is North America, with revenue increasing from $974 million in 2012 to almost $4 billion by 2018, according to the research company.