Smart Grid Landscape in Europe - Market Size, Key Issues, Regulations, Investment Analysis and Outlook to 2020
- Published: March 2012
- Region: Europe
In the UK, the market for Smart Meters is in its infancy, but is set to grow rapidly in the next few years as part of the drive to improve energy-efficiency. The roll out of smart meters will involve the replacement of some 47 million gas and electricity meters and the provision of associated communications. The cost is estimated at approximately £8.6 billion and is expected to deliver total benefits of £14.6 billion, but current overall volumes are still relatively low in the UK. However, the market is set to grow rapidly in the next few years, though capacity will need to increase - not only in terms of production, but also in terms of installation capability of up to 80,000+ per week to meet demand projections.
The report contains:
- MARKET OVERVIEW – market size for smart meters, review of key market influences and analysis of current developments.
- KEY MARKET DRIVERS & BARRIERS TO GROWTH.
- REVIEW OF SUPPLY AND DISTRIBUTION STRUCTURE.
- FORECASTS FOR MARKET DEVELOPMENTS UP TO 2020 – volumes/product mix.
Areas of particular interest include:
- Smart Meters – current state of UK market development – policy options
- Overview of microgeneration renewables – ground / air source heat pumps, biomass boilers, solar thermal and PV. – market size, forecasts, drivers / barriers to growth etc
- Overview of market drivers and barriers to growth of smart meters in UK – key opportunities and constraints.
- Supply and distribution issues – installation volumes/capacity
- Smart Meters Market forecasts up to 2020 – volumes, market values – gas / electricity, display and installation costs.
Companies profiled include:
AlertMe, Bglobal, British Gas, Echelon, EDF, Efergy Elite, Elster Group, First:Utility, G4S Utility Services, GE, ISKRAEMECO, Itron, Landis+Gyr, Logica, Metertec, Npower, OnStream, Providor, Scottish Power, Sensus, Siemens Metering Services, Stark, Utility Partnership Ltd (UPL).
Key areas covered in the report:
KEY MARKET INFLUENCES
- Housing market structure, UK dwelling stock, housing stock mix by age (2007/2050).
- Growth in proportion of owner-occupied housing.
- Government Incentives - Low Carbon Buildings Programme (LCBP). Renewable Heat Incentive (RHI) scheme, Feed-In-Tariffs (FIT’s), PAYS (Pay As You Save), The Code for Sustainable Homes etc.
- Provision of financial support – impact of change in government.
CLIMATE CHANGE ISSUES
- Strategies to combat climate change: the EU Renewable Energy Directive, the UK Renewable Energy Strategy, Code for Sustainable Homes, Warmer Homes Standard.
- Establishment of Renewable Energy Deployment programme. Overview of Renewable Energy market in UK – alternative options – microgeneration technologies.
SMART METERS MARKET
- Market Background – policy options, key market drivers, comparisons with other EU markets.
- Costs / benefits - capital / IT / Installation / Operating costs – consumer and supplier benefits – impact on energy consumption, meter reading, better monitoring and control, impact on prices and competition levels. Overview of estimates / limitations.
- Market overview – market size for Smart Meters – installation volumes, market values (gas / electricity meters) – display /installation estimates 2012-20.
- Barriers to growth – supply chain issues, roll-out programme, priorities, timescales, installation issues, new build/replacement, consumer issues, etc.
- Forecasts up to 2020 – alternative views, volume projections for 2012-2020, range of key influencing factors eg: installation capacity, funding support, impact on take-up of microgeneration etc.
- Microgeneration – market overviews of key renewables – market size, drivers / barriers to growth, forecasts of market growth from 2010-2020:
- Solar Thermal and PV
- Biomass Boilers
- Ground & Air Source Heat Pumps.
SUPPLY AND DISTRIBUTION STRUCTURE
- Key players – suppliers, manufactures, installers, utilities, logistics, IT etc. – market structure.
- UK distribution structure – key routes to market – evolving supply and distribution structure, development of consortia etc.
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1.2 SOURCES OF INFORMATION
2. SUMMARY AND FUTURE PROSPECTS
3. ECONOMIC ENVIRONMENT
3.2 INFLATION & INTEREST RATES
3.4 HOUSEHOLD CONSUMPTION
3.5 HOUSING & CONSTRUCTION
3.7 POPULATION PROFILE
4. KEY MARKET INFLUENCES
4.1 HOUSING MARKET STRUCTURE
4.1.1 All Dwellings
4.1.2 Housing Stock – Current and Forecasts up to 2050
5. CLIMATE CHANGE ISSUES
5.1 BACKGROUND & CURRENT ENERGY SUPPLIES IN THE UK
5.1.1 Renewable Sources of Energy
5.1.2 Renewable Energy Strategy
6. SMART METERS
6.2 CURRENT MARKET STATUS
7. KEY MARKET INFLUENCES
7.1 CARBON EMISSIONS REDUCTION TARGET (THE ENERGY EFFICIENCY COMMITMENT)
7.2 BUILDING REGULATIONS
7.3 HOME ENERGY SAVING PROGRAMME
7.4 LOW CARBON BUILDINGS PROGRAMME
7.5 RENEWABLE HEAT INCENTIVE (RHI) SCHEME
7.6 FEED-IN TARIFFS
7.7 PAYS (PAY AS YOU SAVE)
8. BENEFITS, GROWTH DRIVERS AND BARRIERS
8.1 SMART METERS
8.2 SMART GRID
8.3.1 Solar Thermal and Photovoltaics
8.3.2 Ground & Air Source Heat Pumps
8.3.3 Biomass Boilers
8.4. MARKET FORECASTS
8.4.1 Market By Volume
8.4.2 Product Mix and Installation
8.4.3 Market By Value
9. SUPPLY AND DISTRIBUTION STRUCTURE
9.2 ENERGY PROVIDERS / DISTRIBUTION NETWORK OPERATORS (DNO)
CHART 1: NUMBER OF METERS AND TIMESCALE OF INSTALLATIONS - GREAT BRITAIN, 2012-20
CHART 2: INTEREST RATES AND INFLATION (CPI) FROM 1992-2014
CHART 3: PDI & SAVINGS RATIO AT CURRENT PRICES 1992-2014
TABLE 4: EXCHANGE RATE FLUCTUATIONS 2004-2010 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES
CHART 5: AGE DISTRIBUTION OF THE RESIDENT UK POPULATION MID-2008 (‘000)
TABLE 6: UK DWELLING STOCK BY TENURE (‘000S) 2004-2009
CHART 7: HOUSING STOCK BY COUNTRY AND TENURE 2009 (%)
CHART 8: DOMESTIC CONSTRUCTION STARTS & COMPLETIONS AND FORECASTS 2004 TO 2014 BY VOLUME
CHART 9: UK SOCIAL HOUSING COMPLETIONS 1981-2009
CHART 10: MIX OF STOCK OF DWELLINGS BY AGE 2007 – ENGLAND
TABLE 11: UK HOUSING STOCK PROFILE – COMPARISONS BY AGE PROFILE 2007 AND 2050 – VOLUME OF DWELLINGS (MILLIONS)
CHART 12: FUEL INPUT FOR ELECTRICITY GENERATION BY MILLION TONNES OF OIL EQUIVALENT (TOE) 1989-2009
CHART 13: POSSIBLE FUTURE ENERGY GENERATION MIX BY FUEL TYPE 2020 (GAS, NUCLEAR, RENEWABLES, COAL, OTHERS)
CHART 14: ELECTRICITY GENERATION FROM RENEWABLE SOURCES (%) (WIND, BIOFUELS, HYDRO, PHOTOVOLTAICS ETC) 27
CHART 15: ILLUSTRATIVE RENEWABLE TECHNOLOGY BREAKDOWN TO REACH 2020 TARGET (DBERR CONSULTATION) 30
TABLE 16: CODE LEVELS 1-6: BUILD COST PREMIUMS BY BUILDING TYPE AND LEVEL 31
TABLE 17: OVERVIEW OF LEADING EU COUNTRIES – CURRENT STATUS OF SMART METER ROLL-OUT PROGRAMME 35
CHART 18: ANNUAL INSTALLATION RATES FOR CAVITY WALL AND LOFT INSULATION (IN ‘000) 38
TABLE 19: SMART METERS - SUMMARY OF COSTS / BENEFITS 43
CHART 20: FORECAST NUMBER OF SOLAR THERMAL SYSTEMS BY 2015 AND 2020 48
CHART 21: FORECAST SALES OF SOLAR THERMAL AND PV INSTALLATIONS BY 2007 - 2020 49
CHART 22: HEAT PUMP MARKET – RANGE OF FORECASTS 2010-2020 51
CHART 23: FORECAST SALES OF GROUND SOURCE AND AIR SOURCE HEAT PUMPS BY VOLUME 2007 - 2020 52
CHART 24: FORECAST OF NO. OF BIOMASS INSTALLATIONS FOR THE DOMESTIC MARKET BY 2020 53
CHART 25: FORECAST SALES OF BIOMASS BOILERS BY VOLUME 2009 – 2020, ALL SECTORS 54
CHART 26: NUMBER OF HOUSEHOLDS ON AND OFF THE MAINS GAS NETWORK 56
CHART 27: VOLUME OF METERS AND TIMESCALE OF INSTALLATIONS - GREAT BRITAIN, 2012-20 57
CHART 28: FORECAST MIX OF SMART METERS - ELECTRICITY / GAS: 2012-20, GREAT BRITAIN 59
TABLE 29: SMART METERS - ESTIMATED CAPITAL AND INSTALLATION COSTS 2010 60
CHART 30: ESTIMATED TOTAL CAPITAL AND INSTALLATION COST OF SMART METERS – SPLIT BY GAS, ELECTRICITY, DISPLAYS, INSTALLATION: 2012-20 61
CHART 31: ESTIMATED ANNUAL MARKET VALUE, SMART METERS, DISPLAYS AND INSTALLATION, GREAT BRITAIN – 2012-20 62
TABLE 32: LEADING DISTRIBUTION NETWORK OPERATORS (DNO'S) IN GT. BRITAIN 67
As part of the transition to a low carbon economy the government announced in December 2009 its intention to roll out the programme to replace the existing approximately 47million gas and electricity meters in Great Britain with smart meters by 2020. The roll out of the majority of smart meters is intended to take place over the period 2012 to 2020 and within the peak 4 year period 2014 - 2017 around 33m electricity and gas meters are planned to be replaced in 18m households.
At present, volumes in 2010 are forecast at around 250,000 units which would mean around a 10-fold increase in the next 2 years alone just to achieve the 2012 starting point illustrated in the chart. Undoubtedly, volumes are rising with leading utilities such as British Gas expanding their installation programmes, but further expansion of the installation network will be significant to achieve the target rates. However, British Gas themselves have set a target of 2 million installations by 2012 which, if achieved, will result in the overall achievement of the 2012 target
Very recent announcements by the new coalition government have indicated a desire to bring forward completion of the programme to 2018 which would equate to an average installation rate of around 80-90,000 units per week in the 2012-2018 period – up from around 5000-6000 at present.
The roll out of smart meters will involve the replacement of some 47 million gas and electricity meters and the provision of associated communications. The cost is estimated at approximately £8.6 billion and is expected to deliver total benefits of £14.6 billion over a 20-year period, producing a net benefit of approximately £6 billion.
In 2012, the value of both gas and electricity smart meters is expected to rise to around £100m with displays at about £50m and the installation costs at £53m. As volumes increase, meter supply, display and installations bring the total market value to a peak of approximately £750m in 2014 remaining at that level to 2016 before gradually reducing to less than £100m by 2020.
- British Gas
- Efergy Elite
- Elster Group
- G4S Utility Services
- Scottish Power
- Siemens Metering Services
- Utility Partnership Ltd (UPL)