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Frost & Sullivan’s Top 10 Energy & ICT Smart Trends

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Given the increasing interest in convergence between the energy and the IT and Communications Technologies (ICT) sectors, industry participants need to know the requirements and stage of development …

Given the increasing interest in convergence between the energy and the IT and Communications Technologies (ICT) sectors, industry participants need to know the requirements and stage of development in order to accurately target their product portfolio. This briefing will list the top 10 global energy and ICT trends and will specifically focus on which trends could have an impact between now and 2020.

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  • Optimism from both sectors. But we examine the top 10 relevant trends – in terms of investment and adoption readiness.
  • Moving grid from “analogue” to digital to smartICT can help but large investments are also needed for smart grid projects.
  • Overall energy companies have to spend…Of which
  • Currently Distribution Grid Mgt & HV will spend the most in the next 2 years. ..
  • The 10 are
  • Electricity generation will expand at a CAGR of 2.8 percent through 2020, with the growth rate slowing to 1.8 percent per annum over the subsequent decade as growth in emerging markets is reduced and energy efficiency measures have a greater impact. During the current decade, gas will see the highest growth rate among the major fuels. Nuclear power, despite some delays after the Fukushima disaster, will also expand strongly due to the large number of nuclear plants currently under construction, in particular in Asia. The growth of coal is not far behind, however, as emerging nations such as China and India rely strongly on that fuel. Growth of coal-fired generation is expected to fall massively during the subsequent decade as developed countries decommission capacity and emerging nations become more diversified in their fuel mix.Non-hydro renewables will see the strongest expansion, though wind will become more saturated after 2020.
  • New players and technologies have emerged and are emerging: On-site industrial power generation (captive power) IPPs Smart technology enabling two-way networkIncreasing number of very small (below 100kW) power producers (prosumers) based on solar PV Energy services companies EV charging stations operatorsEnergy storage as a potential game changer And many more...
  • Wish list for the Energy sector: Demand security, demand interoperabilityWish list for the ICT sector: provide a roadmap for transitions, smart grid, clear ROI business case, open standards
  • Transcript

    • 1. Frost & Sullivan‟s Top 10 Energy & ICT Smart Trends Which Technologies and Trends will have a Real Impact on the Smart Grid by 2020? © 2013 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan. Jonathan Robinson, Senior Consultant, Energy & Environment Yiru Zhong, Industry Manager, M2M & ICT in Smart Energy 2nd October 2013
    • 2. 2 Today‟s Presenters • Yiru is an analyst for the ICT industry, with expertise in Machine-to-Machine and ICT in Energy. • Jonathan is a consultant in for the energy and environment sector, with a focus on conventional power generation, renewables and smart energy. Yiru Zhong, Analyst, Frost & Sullivan Jonathan Robinson, Consultant, Frost & Sullivan Yiru Zhong: http://www.linkedin.com/pub/yiru-zhong/1/1a2/b46 Jonathan Robinson: http://www.uk.linkedin.com/in/jonathanserobinson @frostsullivan
    • 3. 3 We identified a long list of trends that could impact smart energy by 2020 Projected Impact on the Energy Vertical by 2020 High Impact Low Impact Certainty by 2020 Low High Smart buildings -> Smart Cities Demand Response Renewable Energy Electric Vehicles Distributed Generation Automation of the Grid Expansion into Services Expansion of AMI Prosumers Energy Efficiency High Growth Impact Low Growth Impact Medium Growth Impact Enterprise Mobility Data Security Cloud Computing M2M/IoT IT/OT Convergence Big Data & Analytics Distributed Intelligence Source: Frost & Sullivan analysis Energy Storage Virtual Power Plants Cross domain interoperability Next Generation Networks Open Source
    • 4. 4 Switches Solar panel Industrial plant Office/ Factory Small generators and solar panels to reduce demand on the grid Wind farm Central power plant Demand response Customers can manage their consumption depending up on the supply conditions Sensors These switches are used to isolate areas in case of fault detections Energy storage Energy generated during off-peak time is stored in batteries Current flow The Grid of the Future is Fast Becoming Closer to Reality Source: Frost & Sullivan analysis
    • 5. 5 0 20 40 60 80 100 120 North America Europe Rest of World Revenues($Billions) 2011 2014 2017 0 25 50 75 100 125 150 2011 2014 2017 Reveneus ($ Billions) North America Europe Rest of World 29% 21% 50% 16% 12% 72% North America Europe Rest of World Smart Grid Revenue Growth, Key Regions, 2011, 2014 and 2017 Booming Levels of Smart Grid Investment, Particularly in Asia Pacific/China Smart Grid Regional Revenue Splits, North America, Europe and Rest of World, 2011, 2014 and 2017 2011 2014 2017 Source: Frost & Sullivan analysis 13% 10% 77%
    • 6. 6 Smart Grid Sub-segment Revenue Split, Global, 2011 $27 bn in Smart Energy Investment in 2011, Forecast to Increase to $125 bn by 2017 ($9.8bn) ($10.1bn) ($7.8bn) ($1.6bn) Smart Grid Sub-segment Revenue Growth, Global, 2011, 2014 and 2017 Source: Frost & Sullivan analysis 0 25 50 75 100 125 150 2011 2014 2017 Reveneus ($ Billions) High Voltage AMI Demand Response Distribution Grid Management High Voltage 35% AMI 25% Demand Response 6% Distribution Grid Management 34%
    • 7. 7 Top 10 Energy & ICT Trends Renewable Energy Distributed Generation Advanced Meter Infrastructure Automation of the Grid Data Security Enterprise Mobility Data Analytics Machine-to-Machine & Internet of Things IT/Operational Technology Convergence Expansion into Software and Services
    • 8. 8 Renewable Energy: Renewables the fastest growing electricity source -4% -2% 0% 2% 4% 6% 8% 10% 12% 14% Coal Oil Gas Nuclear Hydro Wind Other renewables 2010-20 2020-30 Electricity Generation CAGR by Technology, Global, 2010-2030 Renewable Energy Share in Total Generation Capacity, Global, 2010-2030 74% 26% 72% 28% 68% 32% 65% 35% 62% 38% 2010 2015 2020 2025 2030 Renewable energy, incl. hydro power Fossil fuel based generation (gas, coal, nuclear, oil) Source: Frost & Sullivan analysis
    • 9. 9 Distributed Generation: DG drives an increasing defragmentation of power industry landscape Large C&I customers Mid- to small-scale C&I customers Residential customers Captive power1 Captive power (incl. renewables)1 Own generation1 A host of new needs above mere gas and electricity procurement: • Energy consumption reduction • Optimised energy procurement • Increased transparency and energy data management • Renewable energy and self-generation • Carbon compliance
    • 10. 10 AMI: Why is AMI Important? Consumer Utility Benefits Outcomes means greater need for….. = Before meters read 1-12 times a year Now = 35,000 times a year
    • 11. 11 AMI: Strong Global growth, with AMI Market doubling from $8 bn to $16 bn by 2017 Source: Frost & Sullivan analysis 2010 2011 2012 2013 2014 2015 2016 2017 Revenue 6237.6 7766.7 7893.9 8238.5 9427.2 11235.3 13683.0 16461.9 Growth Rate 24.5 1.6 4.4 14.4 19.2 21.8 20.3 0 5 10 15 20 25 30 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 GrowthRate(%) Revenue($Million) Year TotalAMIMarket: Revenue Forecast,Global,2010–2017 Revenue CAGR,2012–2017 = 15.8%,
    • 12. 12 Automation of the Grid: Key element at all stages of the smart grid Automation: Central to the smart grid
    • 13. 13 Global Smart Grid Automation Investment 2011 and 2017 Automation of the Grid: Massive Investment in Global Grid Automation 0 5 10 15 20 25 30 2011 2017 Revenues($Billions) Source: Frost & Sullivan analysis Different Focus: Europe + North America vs. Rest of World CAGR 33%
    • 14. 14 Enterprise Mobility: Adding Mobility Increases Efficiency and Effective Customer Engagement Source: www.xcubelabs.com
    • 15. 15 Data Security: Data Security & Privacy is Fundamental to Smart Grid Integrity Smart meter data Customer: CRM/CIS Energy: Forecast Load balancing New applications in a smart Energy future Source: Frost & Sullivan analysis
    • 16. 16 Data Analytics: Big Data – A Huge Untapped Source of Actionable Insight Divide & Conquer (or Intercept & Forward) In-memory Computing (for Real-time Analytics) Next- Gen Analytics Engine Process some data faster Derive near real-time analytics Deploy some data quickly into business Strip away most for processing & trend analysis 1 2 BI Platform 3 BIG DATA Process all data at In-memory speed; derive real-time analytics „on- board‟ in RAM Make all data available to business users in seconds Source: Frost & Sullivan analysis
    • 17. 17 M2M: M2M Connectivity -> Applications -> Intelligence -> New Business Models • Using machines to solve „who-what-where-when challenges • Strong demand for data analytics, auditing, compl iances and SLA management • Monitoring, reporting, ma intenance and troubleshooting. • Entire business models built around „connected assets‟ • Simple reporting and feedback • Assist in supporting existing business models • Limited storage and analytics requirements From Asset Management Driving Business Efficiency New Product & Service Innovation + + • Monitoring, reporting, ma intenance and troubleshooting. • Entire business models built around „connected assets‟ • Simple reporting and feedback • Assist in supporting existing business models • Limited storage and analytics requirements + • Simple reporting and feedback • Assist in supporting existing business models • Limited storage and analytics requirements Endpoint Monitoring ComplexRules-based Interactions „BigData‟ManagementandSmartCustomer Relationship CustomerValue to to 2009 20182010 2011 2012 2013 2014 2015 2016 2017 Current M2M Focus Source: Frost & Sullivan analysis
    • 18. 18 IT & Operational Technology Convergence: Achieving Greater Operational Efficiencies Interoperability
    • 19. 19 Expansion into Service & Software: Countries/regions are at different stages of development – but some closing in on “maturity” by 2020 Europe North America Asia MaturityDevelopment Growth Africa Middle East Latin America Time LevelofDevelopment Establishing regulatory climate, incentivising investment etc. Focus on investing in equipment and systems Services and solutions demanded to satisfy newly created needs Source: Frost & Sullivan analysis
    • 20. 20 Expansion into Service & Software: Utilities - key element in the new system is customer – residential sector Past Future Business model based on .. Product (electricity, gas) Services catering to customer needs and overall experience Main differentiator Price Scope of services, ease of use, interactivity VS. Product-oriented past Customer-oriented future • The progress is slower in the residential sector but the changes are underway as well with many non-utility companies looking to get into a „living room‟. • Utilities will continue to face a tough competition for customers, which are still loyal to their incumbent energy providers – an advantage a few utilities have realised.
    • 21. 21 Expansion into Service and Software: Examples of all three strategies present in the smart space  Acquisition: Traditional equipment manufacturers are already expanding into service  Organic Growth: There is also greater internal R&D focus from key equipment manufacturers to improve energy systems solutions e.g SCADA, outage management  Alliances: Being formed across the industry – in some cases to target particular geographic markets
    • 22. 22 Conclusion • AMI, Renewables, Automation of the Grid, Distributed Generation trends = Create a need for ICT companies to sell the energy sector • Overall huge opportunities for the different stakeholders: • Energy utilities – challenges, but could need to innovative to maintain positions • Industrial equipment suppliers – booming investment – but services and solutions coming to the fore • ICT companies – 3 immediately relevant trends to act on, 2 that requires cross industry collaboration
    • 23. 23 Next Steps Develop Your Visionary and Innovative Skills Growth Partnership Service Share your growth thought leadership and ideas or join our GIL Global Community Join our GIL Community Newsletter Keep abreast of innovative growth opportunities
    • 24. 24 Your Feedback is Important to Us Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by “Rating” this presentation. What would you like to see from Frost & Sullivan?
    • 25. 25 http://twitter.com/frost_sullivan Follow Frost & Sullivan on Facebook, LinkedIn, SlideShare, and Twitter http://www.facebook.com/FrostandSullivan http://www.linkedin.com/companies/4506 http://www.slideshare.net/FrostandSullivan
    • 26. 26 For Additional Information Jonathan Robinson Senior Consultant Energy & Environment + 44 207 915 7883 Jonathan.robinson@frost.com Joanna Lewandowska Corporate Communications ICT +48 22 390 41 46 joanna.lewandowska@frost.com Yiru Zhong Industry Manager M2M & ICT in Smart Energy +44 207 915 7822 Yiru.zhong@frost.com Chiara Carella Head of Corporate Communications Energy & Environment +44 207 343 8314 Chiara.carella@frost.com

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