- North America will be the leading market for digital utility.
- Integrated solutions associated with the digital utility poised to grow at the fastest pace.
- The transmission and distribution segment is expected to lead the digital utility market.
The global digital utility market is expected to grow from an estimated $135.16 billion in 2017 to $244.31 billion by 2022, at a CAGR of 12.57%, from 2017 to 2022. North American market held the largest share in 2016 followed by the markets in Europe and Asia-Pacific. However, by 2022, the market in Asia-Pacific is projected to gain the largest share. Digital utility market growth is driven by strict regulatory requirements for electric utilities, energy efficiency mandates demanding carbon emission reduction, and increase in the number of distributed and renewable power generation projects.
The digital utility market in Asia-Pacific is projected to grow at the fastest rate during the forecast period. Increasing investment in the electrical infrastructure and growing decentralized power generation will be driving the growth of the digital utility market in the region during the forecast period. The developing smart grid projects and investments in smart cities are also driving the digital utility market in Asia-Pacific.
North America: The leading market for digital utility
The utilities in North America have been undergoing a digital transformation for the past several years. Utility providers in the region are focused on the upgradation of power infrastructure through digital technologies such as smart meters and smart grids, among others. The U.S. government launched the Smart Grid Investment Grant (SGIG) program for smart grid development. There was an investment of $118.5 billion, in 2016, in smart cities in the region; this is expected to increase to $244.5 billion by 2021.
Hence, the North American market presents a greater opportunity for the digital utility market. Rising investments in aging electrical infrastructure and increasing electricity demand are driving the digital utility market in the North America. The market in the U.S. is estimated to be the largest in the region, followed by the markets in Canada and Mexico, during the forecast period.
Integrated solutions associated with the digital utility poised to grow at the fastest pace
The integrated solutions segment, which encompasses cloud platforms, analytics and data management, and related services, is a key aspect that enables the digital transformation of utilities. These solutions improve efficiency and productivity in the utilities sector which can drive the digital utility market.
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Upcoming smart cities and the need to improve productivity and efficiency of utilities are expected to create new opportunities for integrated solutions providers and cloud platform companies in the digital utility market. Utilities are also focusing on deploying digital technologies in restructuring their businesses. All these factors will drive the digital utility market during the forecast period.
The transmission and distribution segment is expected to lead the digital utility
The growth of the transmission and distribution segment is primarily driven by aging infrastructure in the power utilities industry. New digital devices and communications and control systems improve the efficiency of assets and increase the ability of operators to monitor and manage electric transmission and distribution systems. This would ultimately create new revenue pockets for the market during the forecast period.
The hardware segment includes all the tangible aspects of the digital utility market. It covers equipment, from smart meters to smart transformers and all the products of a digital substation. It also encompasses all the components that make conventional equipment smart, such as sensors, smart thermostats, and programmable logic controllers, among others. Hardware generally costs more than other digital solutions and services and, hence, the segment accounts for a larger share of the market.
The digital utility market ecosystem comprises system integrators such as Accenture plc (Ireland), Cognizant Technology Solutions Corporation (U.S.), and Cap Gemini S.A. (France), among others; automation and integrated solutions providers such as ABB Ltd (Switzerland), Siemens AG (Germany), and General Electric Company (U.S.), among others; cloud platform companies such as SAP SE (Germany), International Business Machines Corporation (U.S.), and Oracle Corporation (U.S.), among others.