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European Smart Grid Market: Automation Opportunities
Frost & Sullivan, June 2011, Pages: 82
The key objective of this research service is to provide an analysis of the key trends in the European smart grid market from 2007 to 2017: to identify the opportunities for automation solution providers prevalent through investments in implementing smart grids; to determine the implications of adopting smart grids demand response strategies; to identify the industry challenges, market drivers and market restraints; to provide the key market trends and to provide strategic recommendations for automation solution providers.
This research titled European Smart Grid Market: Automation Opportunities provides a thorough analysis of the key market trends, industry challenges and market drivers and restraints.
20/20/20 to Unleash Revenue Growth in the Smart Grid Market
Smart grids are about building, expanding, operating and maintaining the electricity networks of the future in a way that will also help meet the European Union (EU)’s 20/20/20 climate change objectives. At the United Nations Climate Change Conference in Denmark in 2009, the EU announced and signed the 20/20/20 agreement. The agreement obliges all EU member countries to a 20 per cent reduction in greenhouse gas emissions, a 20 per cent increase in energy efficiency and a 20 per cent share of renewable energy in total energy production by 2020. “Smart grid technology will enable the fulfilment of all these requirements,” notes the analyst of this research. “The European Technology Platform’s study ‘Smart Grids Strategic Deployment Document for Europe’s Electricity Networks of the Future’, published in April 2010, states that as switching from fossil fuels to renewable energy is a pressing need, European countries will have to increase their share of renewable energy in the total electricity production.”
The implementation of renewable energy on a large scale (especially wind, solar, wave and tidal) is likely to cause frequency and voltage fluctuations in the grid. Smart grid solutions will solve this problem and open avenues for faster renewable energy adoption, ensuring reduced costs of generation. “Renewable energy also means decentralising energy generation; smart grid enables the easy control and optimisation of small decentralised generators such as small hydro, single wind turbines or micro gas turbines or fuel cells,” explains the analyst. “Even a single end user who installs a photovoltaic (PV) panel on their roof can become an electricity generator and sell energy to the grid.”
Standardisation is Key to Promoting Market Expansion
One of the key challenges in the European smart grid market is the lack of interoperability standards. Companies providing smart grid technologies do not follow the same standards of operation, particularly interfaces. As a result, their products do not necessarily work well together. Consequently, the utility is often forced to use solutions from a limited number of suppliers. Thus, there is a need for systems or products to work well with other systems or products. Open communication standards will ensure that all smart grid devices are likely to work properly despite being manufactured by different companies. “Interoperability between devices and equipment is extremely important, as the introduction of a smart grid should not create barriers of competition or generate unnecessary costs,” states the analyst. “Moreover, smart grid requirements vary significantly across different European countries; companies, therefore, need to develop the right solution by deciding on the requirements of specific countries and the framework of implementing the smart grid.”
Currently, another concern is the lack of regulations and any actual technical guide for smart grid implementation. The choices and implementation of appliances have not been finalised as a result of undecided interoperability standards. While solutions vary, there is undoubted consensus on the need to enhance the interoperability of the various devices deployed for smart grid. Thus, harmonisation of standards is highly desirable. “Technical standards have to be defined clearly and quickly or else the desired effect will not occur in the expected time frame,” advises the analyst. “All large market participants need to work together to develop one open standard.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following geographic regions in this research:
- Germany
- France
- Italy
- United Kingdom
- Scandinavia (Denmark, Finland, Norway and Sweden)
- Benelux (Belgium, Netherlands and Luxembourg)
- Iberia (Spain and Portugal)
- Rest-of-Western Europe (Austria, Greece, Republic of Ireland and Switzerland)
- Central and Eastern Europe (Poland, Hungary, Czech Republic, Slovenia, Slovakia, Lithuania, Latvia, Estonia, Bulgaria and Romania)
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