Mexico and the World Smart Grid Market

The smart grid market is expected to be a major growth area over this decade to 2020, based on research done by Navigant Research.  In their report titled “Smart Grid Technologies”, they expect the smart grid market to worth $73 Billion in annual revenue by the year 2020 from today’s $13 Billion. Another interesting prediction is that Mexico smart grid market alone will worth about 10 per cent of world the world’s annual revenue.

Navigant pointed out that the current smart grid market revenue has little contribution from countries with population over 100 million and almost no contribution from Africa, which has a population of 1 billion. Navigant thinks this leaves room for high growth in the foreseeable future.

Currently Mexico’s  smart grid market stands at $1.23 billion with the potential for major growth but like many South American countries faces a big challenge is realizing the true value of its utility, because of electrical theft, poor energy infrastructure and power outages. Zpryme’s research sees the use of smart grid technologies as the possible solution for the country to improve its energy supply infrastructure.

“Smart grid technologies improve the reliability and efficiency of the power grid via the application of modern IT capabilities alongside or in place of existing utility assets and networks,” says Bob Lockhart, research director with Navigant Research.

The implementation of smart grid infrastructure would help countries like Mexico to benefit from solution such as: distribution automation, smart metering, smart grid information, transmission upgrades and substation automation.

Another challenge pointed out by Zpryme is that Mexico’s electricity market in is federally owned which they think is stifling innovation. Zpryme thinks going forward more private sector involvement is needed. Currently energy generation is done on a self-supply basis, where these players can only generate electricity for their own consumption, and can only sell excess electricity back to the state.

Over the next seven years, the global smart grid market is looking at a cumulative earning totalling $461 billion, said Navigant.  They also see transmission upgrades investments totalling nearly $250 million in revenue from 2013 to 2020.