Frost & Sullivan: Mega Trend 2020 Global Smart Grids
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Mega Trends 2020: Perspective on Global Smart Grid
Ravi Krishnaswamy
Vice President – Energy Practice
Frost & Sullivan Asia Pacific
Top Mega Trends for Next Decade
Urbanization:
Increasing pace of urbanization will lead to integration
of core city centers with suburbs and daughter cities,
resulting in expanding city limits. This will have massive
impact on the future of mobility, working life and
societies. Three concepts of urbanization will emerge:
Mega Cities, Mega Regions and Mega Corridors.
• Mega Cities: Integration of core city with suburbs and
housing more than 5 million people.
• Mega Regions: Integration of two or more cities or
expansion of city to join with adjoining daughter cities
to form Mega Regions, housing more than 15 million
Health, Wellness and Well-Being:
With smarter drugs, virtual hospitals and cyber documents,
the healthcare industry is poised for a radical change with
information technology taking the forefront in research and
development, diagnostics, and monitoring. In the future,
diagnostics will become less invasive, preventative, and
image-based. Medicines will be marketed as molecular and
personalized drug cocktails. Government will increase
healthcare spending from 15 percent in 2010 to 20 to 30
percent by 2050, thereby changing the landscape and
dynamics of the healthcare industry. Health, Wellness and
Well-Being will become the new value proposition of
companies across sectors and an important factor of
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people.
• Mega Corridors: Urbanization corridors connecting
two or more Mega Cities or Mega Regions converging
to form Mega Corridors. These can be a 60-mile
distance and have a population of more than 25 million
living within the corridor.
SMART is the New Green:
With the advent of technology and infrastructure
development, there will be a shift from “GREEN” to the
“SMART” concept. Some of the SMART initiatives will
find their way into elements of energy, technology,
grids, cars, buildings, utilities and infrastructure. Energy
efficiency and zero emissions will be the basic premise
of such initiatives.
M65B-18
Innovating to Zero!:
A “Zero Concept” world with zero emissions, zero accidents,
zero fatalities, zero defects, and zero breaches of security
will be a reality in the future. Companies will shift focus and
develop products and technologies that “Innovate to Zero,”
such as zero-emission technologies including wind power,
Travelling Wave Reactor (TWR), Solar PV, and Third-
Generation Biofuels.
companies across sectors and an important factor of
differentiation and discussion.
Top Mega Trends (cont.)
Technology:
New technologies will spur the growth of multiple
innovative applications, changing the way we live,
communicate, conduct business and interact with
machines. Innovative technologies of the future,
coupled with satellite development and artificial
intelligence, will open a plethora of new business
models and new opportunities for growth.
SPACE JAM & Cyber Warfare:
E-Mobility:
More than 40 million electric two-wheelers and four-
wheelers will be sold annually around the globe in 2020.
E-Mobility, from electric cars to electric aircrafts, will
usher in a new set of players with new business models
offering an innovative and customized set of
infrastructure and technology solutions.
New Business Models:
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SPACE JAM & Cyber Warfare:
These two very distinct Mega Trends are interrelated
and have synergetic opportunities. Space Jam
represents the opportunities expected from the launch
of more than 900 satellites in the next 10 years, about
15 percent more than those launched in the past 10
years, but with a big difference; about 40 to 50
percent of satellites launched in this decade will be for
civilian applications. China, the European Union and
Russia will launch their equivalent GNSS (Global
Navigational Satellite System).
M65B-18
New Business Models:
Next-generation business models will redefine future
business propositions and influence future technology
and product development. These business models will
not only reshape the landscape of the business
environment, but also influence industry dynamics.
Some of these evolving models are personalization,
car sharing, and “Pay by the Hour.”
Top Mega Trends (cont.)
Social and Economic:
Changing social trends in Generation Y, middle class
and women empowerment will usher in new
opportunities signaling the advent of customized
applications and innovative technologies. The next
level of social networking and geo socialization will
result in new trends of networking, digital marketing
and innovative ways of socializing, furthering the
evolution of interaction between individuals and
organizations. Companies will now look at new
economies “Beyond BRIC” and new outsourcing hot
spots for their business operations.
High-Speed Rail and Future Infrastructure
Development:
With about $41 billion expected to be pumped globally for
infrastructure projects (2005-2030), there will be a
tremendous improvement in the quality and operational
efficiency of sectors such as transport, power and water.
Emerging transportation corridors (e.g., Trans-Siberian
Rail, High-Speed Rail Corridors in the United States) will
lead to mushrooming of economic and technology clusters
along these corridors. These integrated hubs will be the
future centers of innovation, R&D and technical excellence,
attracting massive investment and government support.
7M65B-18
“Green” to be Replaced with “Smart”
Smart CitiesSmart
TechnologySmart
InfrastructureSmart
Hospitals
Smart MobilitySmart
BuildingsSmart Grids Smart Clouds
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Smart Materials
Smart Bandages
Smart Phones Smart Meters
Top 10 Technologies to Watch for in 2020
Wind Energy
Waste-to-energy
Energy Storage
Smart Grid
BioenergyTop 10 Technologies of the Future
Annual Power and Energy Outlook: Top 10 Technologies through 2020
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Hydrogen & Fuel CellsUnconventional
Gas
Energy Management
Solar
Clean Coal Technologies
of the FutureFollowing are key technology platforms that are poised to have a profound impact on a number of sectors across the globe. These areas present a
potential high ROI.
Global Smart Grids Market Head Winds
Impact due to uncertain economy – Smart Grid is still not a ‘must have’ for
utilities
Lack of large scale demonstration projects–
Very limited government ownership and initiative –
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demonstration projects–Business model validation and technology proliferation is not
easy without large scale projects
ownership and initiative –Complex nature of the system
means a diffused ownership model is not helping market advancement
Connectivity gaps of key smart grid domains –
Communication technology, interoperability and security issues
slows down harmonious development
Global Smart Grids Market Push Factors
One solution different sizes and shapes –
Suitable for any utility or country irrespective of
maturity levels
Opportunity to Leap frog–Emerging economies can directly
Industry Collaboration to create new growth markets –
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Emerging economies can directly create a smart utility
infrastructure
new growth markets –Commercial organizations forming
alliances to jointly develop products & tools and implement projects
Modular Concept – Ability to independently deploy and
latter integrate the systems, supports staggered
investment
Global Hotspots for Smart Grids
High level of grid reliability and need to further promote renewable integration post-
Fukushima. Smart City another major driver.
Very clear nationwide vision and roadmap for
smart grid. Potential investment of over $100 billion in next 20 years.
Test bed project involving all key components
EU commitment to 2020 emission targets, directives for internal electricity markets and integration of renewables are key drivers. Electric vehicles and smart cities are additional enablers. Regulatory disparities, lack of appropriate business models and economic difficulties major restraints
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China’s State Grid Corporation plans to invest US$45 billion for smart grid technologies as a part of $250 billion upgrade to its
electrical infrastructure
Power distribution and retail companies leading the initiative. Smart City
and Smart Grid initiatives supported by governments and regulators (A$100 m
funding)
Brazil government mandated smart meters roll out to avoid energy theft and also improve
reliability ahead of major sporting events.
Renewable Energy boom and distribution automation
major factors
Home to major technology and market
innovations. Fragmented nature of utility sector
and decentralized decision making hinder commercial deployment
on large scale
another major driver. However utility monopoly could hamper customer
choice
Smart Grid Components
Smart Meters and Installation
Communication Systems and Networks
Meter Data Management
Customer Data and Program Management
Smart Meters and Installation
Communication Systems and Networks
Meter Data Management
Customer Data and Program Management
Power Curtailment Revenue
Home Area Network and Management
Smart Home Appliances
Power Curtailment Revenue
Home Area Network and Management
Smart Home Appliances
Advanced Metering
Infrastructure
Advanced Metering
Infrastructure
Demand ResponseDemand
Response
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Distribution Automation
Substation Automation and Integration
Field Equipment
Distribution Automation
Substation Automation and Integration
Field Equipment
Flexible AC Transmission Systems (FACTS)
High Voltage DC (HVDC)
Ultra High Voltage DC (UHV)
Grid Monitoring Systems
Flexible AC Transmission Systems (FACTS)
High Voltage DC (HVDC)
Ultra High Voltage DC (UHV)
Grid Monitoring Systems
Distribution Grid
Management
Distribution Grid
Management
High Voltage Transmission
Systems
High Voltage Transmission
Systems
Microgrid Architecture Overview
Microgrid Control Center
Distributed Generation (DG)
Transmission and Distribution Automation
Diesel/Gas
Biomass
Power Source Automation
Demand Energy
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Energy Storage
Electricity Loads
Main Grid
Solar
Wind
Lead Acid Batteries
Flywheels
Fuel cells or Flow batteries
Sodium Sulfur and etc
Switch
Demand Response
Energy Management Systems
Source: Frost & Sullivan analysis.
Microgrid Evolution and Deployment
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Decentralizing generation away from main utility grid
Adding more generators to supply for a larger community
Making the community grid ‘smarter’ and the ability to support the main utility grid
Source: Frost & Sullivan analysis.
Microgrid End User Segmentation
Rural
Sub-segment
Rural/Farmland
Islands
Military
Buildings
Priority/ImportanceCountry
Attractiveness
Cost effective
Independent Power and Security
-NA-
Indonesia,Thailand
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MicrogridEnd User
Urban
Industrial
Source: Frost & Sullivan analysis.
Buildings
Communities
Hospitals
Manufacturing
Energy efficiency
Energy efficiency
Malaysia, Japan, South Korea, Singapore
New Zealand
Note: For governments, the importance of microgrid technology is to improve efficiency and to include the renewable energy sources.
Japan leads the pack, but other countries are exploring opportunities
Mark
et
Valu
e
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South Korea
MaturityDevelopment Growth Decline
Time
Mark
et
Valu
e
Japan
Australia
ThailandSingapore
Malaysia
New Zealand
Indonesia
Source: Frost & Sullivan analysis.
Lack of standardization is a key barrier
2The microgrid market is forecasted to grow at a CAGR of 39.8% during 2011 to 2017.
Market is in nascent stage with no full scale
1In APAC Japan, Australia and South Korea are leading the Microgrid market.1In APAC Japan, Australia and South Korea are leading the Microgrid market.
1In APAC, Japan, Australia, and South Korea are the major markets for microgrid.
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3
Market is in nascent stage with no full scale implementation. Test projects by governments in collaboration with the private companies are underway.
4Government funding plays a key role in the development of microgrid projects.
5Technological barriers and lack of standardization are the critical challenges in
the sector
Source: Frost & Sullivan analysis.
5Technological barriers and lack of standardization are the critical challenges in
the market
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