We seem to hear a lot about smart grid technology these days.  Since the global economy was hit hard last year with the recession, a number of countries launched stimulus plans, hoping to spur spending and mitigate the effects of unemployment.  At the same time, the stimulus plans seek to address long overdue investments in aging infrastructures.  This includes the need to address growing energy demand, sub-par grid infrastructures, and an increasing awareness of environmental protection, thus creating opportunities for energy companies and utilities to re-evaluate their traditional approaches to cost cutting and servicing customers.  Smart grid infrastructures can potentially solve for these market pressures, and technology companies are starting to line outside the door, trying to understand how they can solve for this piece of the puzzle and capitalize on this emerging opportunity.

According to the IDC 2010 Predictions report, over 20 million smart meters will be deployed by US utilities in 2010 and reach a 15% penetration of the market.  The number of smart meter deployments is expected to exceed 60 million, and in North America alone, the predicted technology investment is forecasted to top $17.5 billion by 2013, with an overall growth rate exceeding 16%.

While these numbers in the US are certainly eye catching, other countries are not sitting on the sidelines.  An article came out yesterday, indicating that China may lead the way in 2010 with investments in smart grid technology.  China is predicted to spend more than $7.3 billion, while the US is predicted to spend close to $7.1 billion.

The article points out that with energy consumption in China expected to more than double within a decade, its government needs to make significant smart grid investments to maintain continuing economic development and growth, as well as growing energy requirements.  Apparently, there’s a 2009 Bloomberg report that estimates China will need to spend up to $10 billion/year through 2020 if the country wants to implement a national smart grid.

Some other interesting facts and momentum taking place:

• GE will be building a smart grid technology demonstration center in Yangzhou, China; expect to see more movement from companies i.e. ABB, Accenture, Cisco, HP, Oracle, and Westinghouse
• IBM announced it expects annual revenues from Chinese smart grid development to exceed $400 million over the next four years

It will certainly be interesting to see how this space plays out as countries, governments, energy and technology companies participate in the smart grid race.

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