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The Global Smart Grid Market Will Grow by 27% to Reach $65.4 Million by 2021

HOUSTON, September 22, 2016 - The application of next generation demand-size management (DSM) technologies, such as the smart grid, is playing an increasingly important role in the modernization of utilities sector and engaging consumers more effectively. 

As global governments, regulators and utilities firms seek to increase energy efficiencies, decrease emissions, and integrate renewables, the smart grid delivers an electricity supply network that uses digital communications technology to detect and react to local changes in demand. It enables customers to make more informed decisions about their energy consumption by adjusting both when they use electricity and how much they use, using smart meters. Smart meter technology is the cornerstone of the smart grid that will modernize the electricity system to be stronger, smarter and more efficient over the next decade. 

A recent report cites that revenue generation in the global smart grid market will grow by 27% from $19.8m in 2016 to reach $65.4m by 2021.(1) The rising technology adoption will be driven by mandatory regulations and policies to reduce carbon emissions and the need to ensure grid reliability on a global scale at the same time. North America is expected to hold the largest market share in the smart grid market between 2016 and 2021, but will record a slowdown by 2021. The slowdown will be a result of completion of a majority of projects funded under the American Recovery and Reinvestment Act of 2009. Smaller co-operative utilities, however, are expected to inject funds for smart grid deployments in the US. McKinsey predicts that DSM could translate into as much as $59m in societal benefit by 2019. 

“The electric power sector has been facing a number challenges, primarily resulting from an ageing infrastructure that could affect supply stability, reliability and security. Large U.S. utilities, such as Xcel Energy, Pacific Gas and Electric and American Electric Power, are now using smart grid initiatives to increase demand response, improve reliability, ensure grid resiliency and minimize their environmental impact. It will be important for utilities and other industry participants to set clear and consistent plans for the electricity grid, in line with regulatory policies, that allow for innovative investment in this technology to demonstrate its benefits,” said Elaine M. Walsh, an Energy partner in Baker Botts' Washington office. 

Ms. Walsh is available to discuss the rising global impact of smart grids in the energy sector and explain how they are enabling electricity system operators to better understand and meet customers’ needs. 

Elaine Walsh is based in Washington and counsels clients regarding energy company mergers, energy asset acquisitions, divestitures and investments, as well as, the development of electric generation, transmission, and fuel transportation and storage projects. 

(1) Smart Grid Market by Service - Global Forecast to 2021, MarketsandMarkets (2016) 


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