A smart grid is a self-sufficient electric power network that uses digital communications technology for monitoring, control, and analysis within the supply chain, as well as the ability to act remotely on network incidents, thereby improving the supply and relationship with the environment by providing reliable and efficient power supply through a variety of smart grid applications and technologies. Smart grid software is a critical component of the smart grid infrastructure, as it aids in the deployment and operation of the smart grid, as well as improving process efficiency and lowering energy production costs.
Favorable Structural Characteristics Contribute to Market Growth
The market is expected to develop at a favourable rate during the projection period, thanks to increased government backing and significant investment by enterprises in smart grid technology deployment. During electricity supply to clients, this method improves use, distribution, and decreases transmission losses. The market for such systems is projected to rise as a result of these beneficial qualities. Furthermore, the industry's expansion is expected to be aided by the ageing electricity distribution infrastructure. Another element that is expected to have a beneficial influence on the business in the next years is an improved communication network owing to error-free and efficient data transfer.
Investment in Research & Development to Lead To Opportunities in the Market
Growing expenditures in research and development (R&D) of smart technology software such as broad area monitoring and controlling, renewable energy integration, and enhanced metering infrastructure have been highlighted as prominent trends in the worldwide smart grid technology industry. Several countries are also seeking for effective techniques to manage energy distribution and minimise carbon emissions from traditional energy sources. Furthermore, due to the advent of new utility-scale and produced renewable capacity, power utility companies are increasingly required to improve and modernise their transmission and distribution (T&D) networks.
Growing Concerns About Reducing Carbon Footprint to Augment Market Size
The effective management of dispersed energy resources and growing concerns about reducing carbon footprint during power generation are two key aspects driving the growth of the smart grid software industry. These considerations are driving significant increases in grid modernization expenditures in transmission optimization and distribution automation. Grid connection is typically a one-way communication between the transmission provider and the end user, but it may be turned into a two-way communication with the introduction of smart grid connectivity. It allows the transmission provider to recover excess power from end users who generate electricity at their homes and businesses. Because of its ability to provide consistent, safe, and efficient power by integrating outage management systems (OMS), energy management systems (EMS), supervisory control and data acquisition (SCADA), and advanced fault and network analysis, the distribution management system has a significant market share.
Increased Digital Transformation Trends in the Energy Sector to Propel Market Growth
The expansion of digital transformation trends in the energy industry is one of the main reasons supporting the Smart Grid Software market's growth. The digital transformation of the power sector is expected to be worth $1.3 trillion between 2016 and 2025, according to the World Economic Forum. It also stated that grid optimization and aggregation programmes can provide consumers with smart savings, increase employment, and decrease peak load, all of which contribute to lower greenhouse gas emissions, and are estimated to be worth $440 billion to industry and $1.2 trillion to society over a ten-year period.
The low-carbon nature of digitalization in the energy industry is expected to drive smart grid software market growth in the coming years. Digitalization, according to the International Energy Agency, may save about USD 80 billion per year, or around 5% of overall power generating expenses. The energy industry's digitalization is energy efficient, which is boosting acceptance of digitalization in the energy sector, which is having a favourable influence on the market and is expected to play a key part in strengthening the smart grid software market's growth throughout the projected period.
Favorable Government Initiative to Boost Market Expansion
Smart grid technology is being supported by governments all over the globe, which is expected to be a major contributor in the expansion of the smart grid software market, since smart grid software is utilised in smart grid systems. The Smart Grid Investment Grant (SGIG) programme, sponsored by the US Department of Energy, offers funding for initiatives using smart grid technology, tools, and approaches. Three additional smart grid initiatives were authorized under the National Smart Grid Mission, which got 30% financing from the Ministry of Power, according to the Department of Science and Technology of the Government of India. India's Smart Grid National Program is putting Advanced Metering Infrastructure in place, which includes software for metre data collecting systems. The Indonesian government intends to develop and run 25 new smart grid networks as part of its National Medium-Term Development Plan (RPJPM). The Indonesian government has said that smart grid technology is the solution for improving the dependability of electric power systems in the country. The country has set a goal of employing smart grid technology to reach a national energy mix objective of 23 percent by 2025. These measures are positively impacting the smart grid software industry and are expected to drive market growth during the projected period.
North America to Dominate the Market
Due to investments in power supply, supporting government policies in place in the region, and the presence of technologically sophisticated nations like the United States, the North American region is expected to have a substantial market share. Because of the region's fast digitization and the emergence of software technology, the Asia Pacific region is expected to grow significantly.