The Smart Grid Software market is worth $6.030 billion for the year 2019 and is expected to grow at 21.21% CAGR to reach a market volume of US$23.180 billion by 2026.
Smart Grid is conceptualized as a blend of electrical networks and communication infrastructure. Smart Grid is a self-reliant electricity supply network that employs digital communication networks for monitoring, controlling, and conducting analysis within the supply chain. Smart Grid functions remotely on network incidents and helps in improving the supply through the adoption of various smart grid applications and technologies. The three major areas in the Smart Grid are communication technologies, automated technological systems, and distributed intelligence. Technological advancements in the energy sector have resulted in the increasing adoption of smart grid software which is expected to propel market growth even further.
The smart grid software is an integral part of the smart grid framework that aids in improving efficiency and reducing production cost through simplified implementation and functionality of Smart grids. The Smart Grid software market can be classified based on Advanced metering infrastructure, grid asset management, distribution management system, Network Management system, Substation automation, Grid security, and billing and customer information system. The market can be further segmented by the market into consulting, deployment and integration, and support and maintenance. The outbreak of novel coronavirus has significantly impacted the smart grid software market. Restrictions over manufacturing and travel activities owing to a worldwide lockdown in most of the countries resulted in a downfall in the smart grid software market. Moreover, restrictions on travel, non-availability of workers hindered the operation in the market and led to supply chain disruptions.
Prominent players in the Smart Grid Software market are Chetu, Schneider Electric, Smart grid Solutions, Oracle, IBM, Globema, Accenture, Landis+Gyr, PSI Software AG, Siemens.
The surge in demand due to Digital transformation in the energy sector:-
One of the key factors in the growth of the Smart grid software market is the escalation of digital transformation trends across the market. In recent years, technological solutions and applications have witnessed a significant expansion in the energy sector. Digital transformation in grid optimization and aggregation initiatives can collective provide smart saving solutions to customers and at the same time create employment opportunities in the sector. Besides, the digital transformation in the energy sector has also paved the path for reducing peak demand and has led to a reduction in greenhouse gas emissions. This carbon emission nature of digitalization is expected to spur growth in the smart grid software market over the forecasted period.
Developments in data, analytics and connectivity have led to the transformation of the energy sector towards digitalization. These developments have led to a decline in the cost of sensors and data storage, thus increasing volumes of data in the energy sector. Besides, the technological developments have led to rapid progress in analytics such as machine learning and have been successful in providing greater connectivity to people through cheaper and faster data transmission.
Overall the efficient adoption of digitalization in the energy sector is expected to bolster the growth in the smart grid software market.
Government support for Smart Grid technology:
Governments in various countries have supported the induction and development of smart grid technology which is expected to be a prominent factor in the growth in the smart grid software market. The governments through various policies, regulations and initiatives have promoted the adoption and application of smart grid technologies in their countries. Smart grids technologies have been a key in resolving energy woes faced by governments and aids in addressing troublesome issues such as distribution losses and power thefts. The adoption of these technological solutions is proving to be a complementary factor for the growth in the smart grid software market.
The US Department of Energy has enacted the Small Grid Investment Grant (SGIG) program to accelerate investment for grid modernization. The total investment in SGIG projects is $7.8 billion and has been used to fund a total of 99 projects which are responsible for deploying smart grid technologies and solutions across every US state. According to the Department of Science and technology, the government of India, the department has established two MI-centric funding opportunities in the Smart grid worth US$5milllion each. Moreover, the government of India has taken collaborative efforts with Sweden for the conduct of industrial research on smart grid technologies.
Similarly, other countries around the world have taken similar steps in developing and improving smart grid infrastructure. These government initiatives are expected to have a positive impact on the smart grid software market and propel growth in the market.
Trends in Smart Grid Software Market By Region:
Key market players around the world have adopted various business strategies to sustain, grow and develop in the Smart grid software market. The supportive government policies and regulations have aided in the growth of the market globally. The smart grid software can be segmented by region into North America, South America, and Europe, Middle East and Africa and the Asian Pacific region.
The North American region is anticipated to hold a dominant market share in the Smart Grid software market over the forecasted period. The major market drivers in the North American region are significant investments in power supply, availability of technologically advanced solutions and government support. The region has been extremely active in adopting newer technological solutions such as AMI, Smart Grid communication and substation automation. The Middle East and African region are in the nascent growth phase. The region is expected to grow in the coming years owing to the availability of conventional and renewable energy reservoirs. The Asian Pacific region is anticipated to witness a substantial growth in the market over the forecasted period owing to accelerated digitalization in the region and a rise in software technologies.