The Smart Meter Market in Europe is Booming


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The Smart Meter Market in Europe is Booming

  1. 1. The Smart Meter Run – Europe Gears Up to Meet the Roll Out Deadline Neha Vikash, Research Associate Energy and Power July 2011
  2. 2. Highlights• Introduction• Technology and Product Overview• Market Overview• Industry Challenges• Force Field Analysis of Drivers and Restraints• European Smart Meter Market Forecast – A Snapshot• Tier and Market Share Analysis• Implementation Vs Regulation Matrix• Summary 2
  3. 3. Introduction Key Findings Europe is a push market where smart meter and smart grid markets are legislation driven. There is region-wise disparity due to the different regulatory challenges faced by each country, thus having a direct impact on implementation. The smart meter market is expected to boom owing to the recent impetus from renewable energy and smart grid implementation. Smart meters are required for integration of renewable energy. Europe is focussed on meeting the 20-20-20 targets which is a necessary driver for increase in renewable energy and the third energy directive focus is towards 80 percent smart meter penetration in the residential sector by 2020. The market is in the commercialisation stage and is expected to witness higher growth from 2012 throughout Europe. Several pilot projects are ongoing with a focus towards massive deployments from 2012 to 2020 Competition among the market players is increasing and the future trend is a further increase in potential competition. Chinese and other Asian companies are expected to enter the market in the short to medium term. 3
  4. 4. Introduction : Technology and Product Overview Smart MeterSmart meters are superior meters that identify the electricity consumption pattern in better detail as compared to aconventional meter. They have embedded systems which has the ability to communicate information to the utility inreal time for monitoring and billing purposes. Two way Meters Outage Detection Time of Usage Other Features 4
  5. 5. Market Overview European Smart Meter Markets : Smart Metering Market Phase (Europe), 2010 European Smart Meter Markets : Smart Metering Market Phase (Europe), 2010 Country 2010 2014 2017 France Spain Market Growth Trend UK Germany ROE Denmark Finland Norway Italy Introduction Growth Maturity Decline State of the Market Sweden Source: Frost & Sullivan European Smart Meter Markets : Country Status of Deployment (Europe), 2010 Start of Large Scale Expected End Date of Country Installed Base (in millions) Rollout Large Scale Roll Out Denmark 1.4 2005 2013 Finland 1.2 2010 2014 France 0.3 2012 2016 Germany 0.3 2014 NA Italy 33.5 2005 2011 Spain 0.4 2011 2018 Sweden 5.3 2006 2009 United Kingdom 0.08 2012 2020 Source: Frost & SullivanM6BD-14 5
  6. 6. Industry Challenges European Smart Meter Markets : Industry Challenges (Europe), 2011-2017 Lack of Government Unguaranteed Quality of Subsidies and Grants Meters 1 2 European Smart Meter Markets Risk of Information Replacement of Existing Meters Security Leading to Stranded Assets Source: Frost & SullivanM6BD-14 6
  7. 7. Force Field Analysis of Drivers and Restraints European Smart Meter Markets : Market Drivers and Restraints Ranked in Order of Impact (Europe), 2011-2017 EU Directives and Legislations for the Smart Meters for Effective Smart Meters are Imperative for Internal Electricity Market in all Integration of Renewable Smart Grids and Leads to Efficient Members States Electricity Energy management in T&D space Drivers Drivers 1 2 3 Restraints Restraints 1 2 3 Lack of Utilities’ Appropriate Lack of Standardization in Long and Capital Intensive Process Communication Protocols Business Models to Invest in Smart Metering that Slows Down Market Leading to Problems of Adoption Interoperability Denotes Current Impact Source: Frost & Sullivan Denotes Long term ImpactM6BD-14 7
  8. 8. European Smart Meter Markets – A Snapshot European Smart Meter Markets : Unit Projection (Europe), 2010 and 2017 European Smart Meter Markets : Revenue Projection (Europe), 2010 and 2017 1900.00 34.00 1400.00 Units (million) 1,926.68 19.00 Revenue 30.54 ($ million) 900.00 6.10 4.00 550.70 Note: All figures are rounded; Note: All figures are rounded; 2010 2017 the base year is 2010. the base year is 2010. 400.00 Source: Frost & Sullivan Source: Frost & Sullivan 2010 2017 European Smart Meter Markets : Installed Base Projection (Europe), 2010 and 2017 European Smart Meter Markets : Price Projection (Europe), 2010 and 2017 230.00 100.00 200.00 170.00 85.00 140.00 Installed Base 110.00 200.43 (million) 93.14 Average Price ($) 70.00 80.00 50.00 43.90 Note: All figures are rounded; 63.09 Note: All figures are rounded; 20.00 the base year is 2010. the base year is 2010. 55.00 2010 2017 Source: Frost & Sullivan Source: Frost & Sullivan 2010 2017M6BD-14 8
  9. 9. Tier and Market Share Analysis European Smart Meter Markets : Tier Analysis by Installed Capacity (Europe), 2010 Tier 1 (90 % market share) Echelon, Landis + Gyr Tier 2 (9 % Market Share) Itron, Elster Metering, Iskraemeco Tier 3 (1 % Market Share) Xemtec, Secure Together, Kamstrup, Sagemcom etc. Source: Frost & Sullivan 9
  10. 10. Implementation Vs Regulation Matrix European Smart Meter Markets : Country Implementation and Regulation Matrix (Europe), 2010High Sweden Regulatory Driven & Utility Driven Italy Denmark Regulation Driven Finland France Norway Utility Driven Degree of Implementation Malta Less Regulatory Driven & Utility Driven Germany Austria Spain Ireland Estonia United Kingdom Netherlands Poland Hungary Portugal Belgium Czech Republic Cyprus Latvia Source: Frost & SullivanLow High Degree of Regulatory Push 10
  11. 11. Smart Meter Roll-Out Implementation in Europe European Smart Meter Markets : The Process of Roll-out Project Implementation by Country (Europe), 2010 Smart Meters Roll Out Smart Meters are Roll Out Plan There is no Roll Already Installed Plan is Being Installed is Decided Under Out Planned Until 2010 Discussion  Denmark (50%)  Denmark (50%)  Greece  Austria  Hungary  Italy (90%)  Italy (5%)  Spain  Czech Republic  Luxembourg  Sweden (100 %)  Netherlands (4%)  France  Finland (44 %)  Finland (45%)  Germany  Malta (36.32 %)  Malta (63.68 %)  Great Britain  Ireland  Netherlands  Norway  Poland  Portugal  Slovak Republic Source: Frost & SullivanM6BD-14 11
  12. 12. Summary of Key FindingsSweden and Italy have almost completed their deployment according to the EU’s objectives. UK, France, Spain, Scandinavia are seen aspotentially developing markets.Market Players are awaiting for the standardization mandate to be published to overcome the interoperability setbacks.Several pilot projects are ongoing with a focus towards massive deployments from 2012 to 2020 to meet the EU deadline of having smartmeters installed in 80 percent of the households by 2020.Frost & Sullivan estimates the installed base to be 200 million by 2017 with a compound annual growth rate (CAGR) of 24.2 percent between2010 to 2017. The price is expected to fall gradually with increase in volume deployments, mass regional coverage, technological developmentand equipment design.The market is expected to enter the growth stage. Smart metering being imperative for smart grids will lead to developments at the grid systemlevel having completed large scale deployments in several countries across Europe. The trend in competition is increasing, and marketentrants see good investment opportunity in this evolving market. 12