The electric utility sector has evolved and the market has become increasingly complex. Concerns around how energy is created and utilized, coupled with climate change, nudged suppliers toward more renewable energy.
Problems in the global energy supply chain have underlined the increasing necessity of renewables, such as solar and wind power, translating into the advent of alternative energy generation.
However, renewables do not generate electricity continuously, and therefore these systems must be automated, plus the energy generated must be stored and distributed more efficiently.
Smart Grid Market Development
According to the latest worldwide market study by Juniper Research, cost savings from Smart Grid deployments will exceed $125 billion globally in 2027 -- that's increasing from just over $33 billion in 2022.
This 279 percent growth will be driven by rising energy prices, with smart grid technologies playing a critical role in increasing electric network efficiency and optimizing resource management.
Juniper has identified the abilities of Artificial Intelligence (AI) and data analytics as crucial to maximizing the benefits of new renewable energy sources, by actively balancing load and optimizing energy transmission.
Smart grids are electric networks using advanced technologies to monitor, automate and manage the transport of electricity from all generation sources to meet the varying demands of end users.
Juniper also identified smart grid deployments as key to the decarbonization of electricity production across the globe.
Smart grids will enable energy sources that produce electricity based on external elements, such as solar and wind power, to meet requirements more effectively, by actively balancing load and predicting surges in demand and production.
"By leveraging AI, electricity networks can ensure that spikes in demand are predicted and mitigated. Smart grid vendors must focus on enhancing their models to more accurately predict usage patterns to maximize these benefits, said Nick Maynard, head of research at Juniper Research.
The research predicts that smart grid deployments will result in an almost 700 million Million Metrics Tons (MMT) reduction in Carbon Dioxide Equivalent (CO2e) emissions globally in 2027 -- that's falling from 214 million in 2022.
According to the Juniper assessment, this will be central to meeting UN COP climate change goals, alongside updating generation capabilities to feature more renewable sources, including wind and solar power.
Outlook for Smart Grid Technology Investment Growth
Juniper analysts recommend that smart grid vendors must develop big data ingestion engines that can analyze and interpret structured and unstructured data from disparate sources -- including smart meters, network data, and weather forecasts, to maximize emission reductions.
That said, I believe the ongoing digital transformation within the electric utility sector will be mandated by government intervention. As an example, while the historical adoption of innovative technology is typically low in the energy sector, climate change will force accelerated new investment.
Due to its extensive features in the accommodation of renewable energy sources through its communication capabilities, investing in smart grid technology deployment could yield significant benefits for the environment and global society as a whole.