2016 Top Markets Report

Smart Grid

A Market Assessment Tool for U.S. Exporters

April 2016

U.S. Department of Commerce | International Trade Administration | Industry & Analysis (I&A)
Industry & Analysis’ (I&A) staff of industry, trade and economic analysts
devise and implement international trade, investment, and export
promotion strategies that strengthen the global competitiveness of U.S.
industries. These initiatives unlock export, and investment opportunities
for U.S. businesses by combining in-depth quantitative and qualitative
analysis with ITA’s industry relationships.

For more information, visit

www.trade.gov/industry

I&A is part of the International Trade Administration, whose mission is to

create prosperity by strengthening the competitiveness of U.S. industry,
promoting trade and investment, and ensuring fair trade and compliance
with trade laws and agreements.

Vickie Gunderson served as the lead author of this report. Critical insights
on all the markets mentioned in the report were provided by in-country
Commercial Service energy sector specialists. Lilian Lee provided the
primary research and drafting of the energy storage sub-sector
snapshot. This report serves as an update to the 2015 report.
Table of Contents

Executive Summary ...............................................................................................................................2

Overview and Key Findings ................................................................................................................5

Sector Snapshots
Transmission & Distribution (T&D) Equipment ..................................................................... 17
Smart Grid Information Communications Technologies (ICT) .......................................... 21
Energy Storage ...................................................................................................................................... 23

Country Case Studies

Brazil ......................................................................................................................................................... 29
Canada ...................................................................................................................................................... 33
China ......................................................................................................................................................... 37
India .......................................................................................................................................................... 41
Japan ......................................................................................................................................................... 45
Mexico ...................................................................................................................................................... 49
Nigeria ...................................................................................................................................................... 53
Saudi Arabia ........................................................................................................................................... 57
Turkey ...................................................................................................................................................... 61
United Kingdom.................................................................................................................................... 65

Addendum: Resources for U.S. Exporters ................................................................................... 69

Appendices
Appendix A: Methodology ................................................................................................................ 71
Appendix B: Year-to-year Report Ranking Comparison....................................................... 77
Appendix C: Citations ......................................................................................................................... 80

2016 ITA Smart Grid Top Markets Report 1

This Page Intentionally Left Blank

2016 ITA Smart Grid Top Markets Report 2

Executive Summary
ITA’s 2016 Smart Grid Top Markets Report ranks 34 international markets in terms of growth potential for the U.S.
smart grid industry. It also presents analyses that will help prioritize U.S. Government export promotion efforts
target resources toward these markets. The report integrates data and analyses on global markets and trade,
including the critical contributions of commercial specialists from U.S. Foreign Commercial Service posts. The
results are combined using a weighted scorecard methodology to produce relative rankings of the 34 subject
markets.

The rankings highlight the common strengths and weaknesses of the various smart grid export markets. The sub-
sector rankings of Smart Grid Information Communication Technology (ICT) and Transmission & Distribution (T&D)
equipment are the result of re-weighting the Smart Grid Top Markets scorecard system to focus on differentiated
opportunities for exporters of equipment and services across the smart grid technologies continuum, which is
described in detail in the report. An additional sub-sector snapshot for the Energy Storage sub-sector is also
included, but there are no sub-sector rankings.

The 2016 Smart Grid Top Markets Report is an update of the 2015 report. Since the publication of the 2015 report,
there have been a number of key developments that affect the smart grid sector, reflected in the new 2016
rankings, and described in detail in later sections of this report. Three specific global developments, however, are
worth highlighting at this juncture: (1) economic downturn, (2) sustained low global oil prices, and (3) the
December 2015 agreement reached in Paris under the U.N. Framework Convention on Climate Change.

From the 2015 to 2016 iterations of this report, most markets remained relatively stable among respective overall
rankings. Significant increases in rankings were seen for Mexico (+9), India (+13) and Spain (+16), while Singapore (-
14), Brazil (-13) and Colombia (-10) saw the largest drops in rankings year-to-year.

Overall, ITA assesses that opportunities to deploy equipment, services, and software to improve energy
management on both the supply and demand sides. For example, U.S. T&D equipment exports have performed
well in recent years, and total export revenues for the T&D equipment sector reached nearly $2.0 billion in 2015.
Exports to Canada and Mexico accounted for almost 45 percent of this total, and exports to the top ten markets
1
make up over two-thirds. On the demand side of management, U.S. smart grid ICT developers continue to be seen
as global leaders.

This report considers common regulatory, policy, business and technical challenges to smart grid development,
and provides an analysis of their effects on specific markets. These challenges include standards development,
improving regulatory models and engaging
the consumer. Figure 1: Top Ten Smart Grid Top Markets Overall and Sub-
Sector Rankings
The Case Studies are not confined to the
highest ranking markets. In fact, ten markets Overall
T&D
Smart Grid ICT
from the rankings have been selected in Equipment
1 Canada Mexico Canada
order to provide an in-depth analysis of the
2 Mexico Vietnam Japan
issues affecting these smart grid markets. 3 Japan India United Kingdom
4 Saudi Arabia Nigeria Australia
Brazil: Brazil is currently the largest electricity 5 Australia Saudi Arabia France
market in Latin America, and an important 6 United Kingdom Malaysia China
global emerging market. Smart grid 7 China Chile Mexico
deployments, however, have been slowed by 8 India Indonesia New Zealand
regulatory and technical hurdles as well as a 9 Vietnam Canada Spain
10 France Philippines Netherlands
recent economic downturn. The business
environment for U.S. smart grid exporters

2016 ITA Smart Grid Top Markets Report | 3

has been challenging as well, since strong local partnerships and longer timelines for investment are usually
required of foreign entrants.

Canada: Canada ranks first overall. U.S. exporters are highly competitive and face minimal barriers in doing
business in Canada, which is by far the top export destination for U.S. T&D equipment manufacturers. In addition,
there is still a high potential for growth in this market, as Canada needs to invest in its aging electricity
infrastructure. Provinces are planning multi-billion dollar build-outs and upgrades to transmission lines.

China: As the world’s largest market for electricity infrastructure development and smart grid technologies, China
offers great opportunities for U.S. exporters; in particular, suppliers and service providers who are in the areas of
high voltage transmission, synchrophasor technology, and the modernization of transmission operations, and who
are in partnerships in Smart City and select smart grid projects.

India: India’s Smart Grid Top Market rankings are bolstered by a fast-growing economy and electricity sector.
Ambitious government policies for energy access, renewable resources deployment and “smart cities” deployment
send positive signals for the smart grid market. Challenges remain, however, especially those relating to access to
financing.

Japan: Japan ranks third among top markets for smart grid export growth, largely due to electricity sector reforms,
energy efficiency objectives, and active technology procurements by utilities. While U.S. suppliers face difficult
competition in Japan, important in-roads have been made in recent years, and the market is expected to evolve
favorably for innovators and entrants.

Mexico: Opportunities for U.S. exporters to Mexico are strong, given the interconnection of U.S. and Mexican
electrical grids along the border, longstanding relationship between U.S. and Mexican firms, competitive
advantages created by trade agreements, and business potential brought by a single utility company covering a
rapidly-expanding customer base of 40 million.

Nigeria: The recent transformation of Nigeria’s power sector, combined with sustained economic growth and
increasing electricity demand are driving opportunities for T&D equipment suppliers. It also places Nigeria fourth
in the Top Markets T&D equipment sub-rankings. Nigeria’s government has thus far been responsive to the need
to direct the proceeds from economic growth towards the overhaul and expansion of decrepit T&D infrastructure
that currently only reaches 50 percent of the population.

Saudi Arabia: Saudi Arabia ranks fourth overall in the Smart Grid Top Market Report. U.S. exporters of T&D
equipment find increasing opportunities in the Middle East’s largest market. Understanding Saudi Arabia’s
electricity policies start and end largely by focusing on trends in global oil prices. Proven crude oil and natural gas
reserves, as well as generous subsidies, have driven energy demand growth over the last several decades, as fossil
fuel extraction is highly energy intensive.

Turkey: Turkey’s Top Market ranking is bolstered by strong electricity demand growth, public and private sector
investment in grid modernization, and steady progress in electricity market reforms. Turkey ranks high among Top
Markets in terms of recent electricity demand growth and has received high marks in the local Commercial Service
assessment of the business environment for Smart Grid ICT firms.

United Kingdom: The United Kingdom has quickly developed into one of the most attractive markets in the world
for advanced smart grid technology and applications. Thanks to a highly competitive electricity sector and recent
efforts by the government and regulators, the U.K. market offers immense opportunities for innovators in the
smart grid ICT segment and is one of the top nations in the world for U.S. firms to do business.

2016 ITA Smart Grid Top Markets Report | 4

Overview and Key Findings
Introduction
international markets in terms of U.S. smart grid
As U.S. Government agencies implement the industry for its export growth and presents analysis
Renewable Energy and Energy Efficiency Export that will help prioritize U.S. Government export
Initiative (RE4I), policymakers face the complicated promotion efforts to target resources toward these
challenge of helping U.S. exporters compete abroad markets. The report integrates data and analysis on
while managing considerable uncertainty and restraint global markets and trade, including the critical
in budgeting. Under the RE4I, the U.S. Department of contributions of commercial specialists from U.S.
Commerce’s International Trade Administration (ITA) is Foreign Commercial Service posts. The results are
committed to developing a tool to prioritize U.S. combined using a weighted scorecard methodology to
Government export promotion efforts that help target produce relative rankings of the 34 subject markets.
limited resources toward the markets and sectors that
are most likely to result in U.S. exports. The following Each subset of the smart grid sector faces different
study elaborates on this commitment for the smart competitiveness challenges, and each market
grid sector – it is meant to inform decision makers and possesses a set of characteristics that require nuanced
managers of key trends, areas of opportunity, and and tailored export promotion and policy approaches.
important challenges facing U.S. smart grid exporters. This report is designed to identify where U.S.
Government activities can be most effective, helping
Beginning in 2009, the United States has made policymakers utilize limited resources more efficiently
unprecedented investments in the modernization of its and strategically.
electricity grid, and has since become a world leader in
the development and deployment of smart grid The rankings highlight the common strengths and
technologies. U.S. companies large and small provide weaknesses of the various smart grid export markets.
innovative technology solutions to some of the most
pressing challenges facing the electricity industry, and The sub-sector rankings of Smart Grid ICT and
investments by utilities and governments around the Transmission & Distribution equipment (T&D) are the
world are now driving consistent growth in smart grid result of re-weighting the Smart Grid Top Markets
exports. scorecard system. The reweighted version focuses on
differentiated opportunities for exporters of
Supporting export growth and addressing trade equipment and services across the smart grid
barriers for the U.S. smart grid industry has been a technologies continuum, which is described in detail in
priority for the ITA since the beginning of the the Report.
President’s National Export Initiative. Among ITA’s
major contributions to this effort has been the delivery Figure 2 summarizes the overall rankings. Figure 3
of research and analysis to U.S. government partners, analyzes the rankings into export market clusters.
and valuable market intelligence to the U.S. smart grid These export clusters describe the common
industry. characteristics among top ranking markets.

ITA’s 2016 Smart Grid Top Markets Report ranks 34 The 2016 Smart Grid Top Markets Report is an update

Figure 2: Smart Grid Export Market Projections, 2016

1. Canada 10. France 19. New Zealand 28. Thailand

2. Mexico 11. Chile 20. Singapore 29. South Africa
3. Japan 12. Turkey 21. Nigeria 30. Colombia
4. Saudi Arabia 13. Korea 22. Austria 31. Poland
5. Australia 14. Malaysia 23. Israel 32. Brazil
6. United Kingdom 15. Spain 24. Denmark 33. Portugal
7. China 16. Netherlands 25. Sweden 34. Russia
8. India 17. Philippines 26. Indonesia
9. Vietnam 18. Germany 27. Italy

2016 ITA Smart Grid Top Markets Report | 5

Figure 3: Understanding Different Types of Smart Grid Markets
Export Market Clusters Common Characteristics Examples (Rank)

• Top U.S. export market Canada (1)

Major Trade Partners • Geographic and/or cultural proximity Mexico (2)
• History of success for U.S. suppliers U.K. (6)

• Growing smart grid investment Japan (3)

Smart Grid Procurers • Major procurements and deployments underway China (7)
NEAR-TERM

• Advanced metering infrastructure France (10)

• Stable, healthy, mid to large-size economies Australia (5)

Healthy Economies • Favorable business environments Chile (11)
• Investment in electricity infrastructure a priority

Saudi Arabia (4)

• Surging electricity demand
Turkey (12)
• Major investment growth in electricity sector
Towards Deployment Malaysia (14)
• Procurements beginning and favorable Philippines (17)
competiveness for U.S. firms Singapore (20)

Germany (18)
• Large markets with growing smart grid investment
Growth Competitors Korea (13)
• Highly competitive local suppliers
Spain (15)
Netherlands (16)
• Smaller, high-income markets New Zealand (19)
• Have already invested in smart grid infrastructure Austria (22)
MID-TERM

Mature Competitors
• More opportunities for smart grid ICT/Services Denmark (24)
• Less favorable to U.S. suppliers Sweden (25)
Israel (23)
• Low income, high growth, including in electricity
Vietnam (9)
demand
India (8)
Emerging Smart Grid • Major infrastructure challenges
Nigeria (21)
Markets • More opportunities for T&D equipment/services
Brazil (32)
• High potential for medium to long-term export Colombia (30)
growth
• Lower income markets
South Africa (29)
Developing Grid • Current focus on grid modernization
LONGER-TERM

Indonesia (26)
Modernization • Addressing major issues in wider electricity sector
Thailand (28)
• High potential for longer term export growth
• Mid to large-size economies Portugal (33)
• Smart grid investment growth with major risks Poland (31)
Economic Laggards
• Established incumbent suppliers Italy (27)
• Poor economic health and/or business environment Russia (32)

of the 2015 report. Since the publication of the 2015 Economic Downturn
report, there have been a number of key
developments that affect the smart grid sector, Many economic sectors, including smart grid goods
reflected in the new 2016 rankings and described in and services, felt the effects as global economic
detail in later sections of this report. Three specific growth slowed in 2015. Decreasing commodity prices,
global developments, however, are worth highlighting weaker export demand from emerging economies and
at this juncture: (1) economic downturn, (2) sustained slowing global trade flows have been reported. Effects
low global oil prices and (3) the December 2015 of this downturn were the strongest in transitioning
agreement reached in Paris under the U.N. Framework and developing economies with the notable exception
2
Convention on Climate Change. of India.

2016 ITA Smart Grid Top Markets Report | 6

Oil Prices below 2 degrees Celsius – something that cannot be
met by even following the initial INDC pledges. As
ITA assesses that although the effects of fuel switching such, under the Paris Agreement, countries will submit
as a result of low oil prices are not perfect, fluctuations new nationally determined contributions at regular,
in oil prices has impacted the broader electricity five-year intervals to take stock of progress, and set
market and investment landscape as well, and is a newer, stronger climate change and adaptation goals.
factor contributing to the changes in rankings of key Given these factors, and increased transparency
U.S. smart grid export markets. Since mid-2014, oil requirements for both developed and developing
prices dropped more than 70 percent and the industry countries to help make sure each country lives up to its
is now preparing itself for a “longer for lower” outlook commitments, ITA assesses that this agreement likely
on the price of crude oil. ITA assesses that lower will be a strong driver for global smart grid deployment.
operating costs for major oil exporting countries have
affected the outlook for available resources for large Other developments during 2015 are described in the
capital projects – including electricity grid projects. subsequent pages and include examinations of wider
Additionally, a number of nations have leveraged the trends affecting the development of smart grid
drop in oil prices to reduce their fossil fuel subsidies. technologies; factors in investment, policy, and
This affects not only the levelized cost of crude oil regulatory factors driving market development, as
feedstocks for electricity generation, but also the cost does the competitiveness of U.S. exporters across the
comparison between electricity generation resources. spectrum of smart grid technologies. The report also
includes in-depth case studies highlighting smart grid
Climate Change Agreement developments and opportunities for U.S. exporters in
ten featured markets.
Smart grid technologies play an important role in the
effective implementation of policies to reduce Key Findings: Top Markets and Methodology
greenhouse gas emissions, and as such, ITA assesses
that strong climate change policies and regulations The Smart Grid Top Markets Report estimates the
enhance the global smart grid outlook. In coming years, relative potential for growth in U.S. smart grid exports
ITA expects to see an uptick in new policies directed at in 34 key international markets by integrating analyses
fleshing out how nations plan to implement the broad of data and information across four categories:
greenhouse gas (GHG) reduction targets and
renewable energy deployment targets put forward, 1. Smart Grid Market Growth Potential: Industry
and where the financing of said projects will come. data and information on policies, regulations, and
During the December 2015 United Nations Framework other local drivers of the smart grid technologies
Convention on Climate Change (UNFCCC) in Paris, and services market.
nearly 200 countries agreed to a framework for setting 2. Trade Factors and U.S. Competitiveness: Trade
country-level targets for GHG emissions that include data and other information on exports of U.S.
the submission of so-called “intended nationally smart grid products and services in a given market.
determined contributions,” or INDCs. Although not all 3. Key Economic and Energy Sector Investment
the INDCs reflected new policy commitments since the Indicators: Broader economic data and power
last Top Markets publication, inclusion in this sector trends that impact investment in electricity
agreement strengthens the likelihood of following infrastructure, and the development and growth
through on commitments, sending a long term market of the smart grid in a given market.
signal to investors. The International Energy Agency 4. Strength of Domestic Industry: Trade data and
(IEA) predicts that the full implementation of these other information on the extent to which demand
pledges will require $13.5 trillion in clean energy and for smart grid technology and services will be met
energy efficiency technology deployment investments by the domestic industry – as opposed to
3
over the next 15 years. Deploying smart grid international trade – in a given market.
technologies, especially leveraging ICT software and
analytical capabilities in ways to use electricity most There are a variety of challenges to obtaining
efficiently, and better integrating renewable energy comprehensive and quantifiable information for each
sources will be critical in meeting INDC targets. The of these categories.
Paris Agreement also includes a collective goal of
keeping the increase of global temperature to well

2016 ITA Smart Grid Top Markets Report | 7

The smart grid is an energy sector that experts struggle A detailed explanation of the methodology and key
to define, and in an era of technological convergence, supporting data sets for each of the four categories
many smart grid technologies are multi-use and can be found in Appendix A. This also includes detailed
purchased outside of the electric utility sector. The information on the minor modifications to the
challenge is acute when it comes to smart grid trade methodology deployed in the 2016 Smart Grid Top
data. As a result, this assessment draws on both Markets Report relative to the 2015 report.
qualitative and quantitative data that may inherently
narrow the scope of any one of the four categories and Figure 2 shows the overall sector rankings for all 34
serve as a proxy for wider trends. markets. This builds on an assessment presented in
2015. A full comparison of rankings from 2015 to 2016
This is most significant for category 2 – Trade Factors is shown in Appendix B, Figure B1.
and U.S. competiveness – where existing global trade
data only captures accurate and relevant export In 2016, ITA assessments expanded to include two
revenues for a subset of T&D equipment rather than additional markets – Israel and New Zealand – as
the entire smart grid market. complete data sets were available for these markets
this year. Data sets for all markets were updated for
The existing Harmonized Tariff System (HTS) includes 2016 as described below and in Appendix A.
product codes for the “Transmission & Distribution
Equipment”. For the most part, however, HTS product From the 2015 to 2016 iterations of this report, most
codes for the wide range of hardware, software and markets remained relatively stable among respective
networking technology are either non-existent or too overall rankings. Significant increases in rankings were
broad to discern smart grid applications for these seen for Mexico (+9), India (+13) and Spain (+16), while
technologies, as opposed to broadband Internet Singapore (-14), Brazil (-13) and Colombia (-10) saw the
applications, for example. Furthermore, data on largest drops in rankings year-to-year.
international trade in smart grid services, such as
consulting, information technology (IT) system Understanding these movements in rankings is best
integration, and consumer energy efficiency programs, grasped by understanding the market signals as they
is not collected by government or international relate to four of the score areas.
institutions.
Smart Grid Market Growth Potential (Category 1)
In order to quantify the global smart grid opportunity,
this report utilizes the available U.S. Census trade data The development and deployment of smart grid
for T&D equipment along with smart grid market and technologies are affected by a significant number of
investment data – both public and proprietary – to enabling policy, regulatory, investment and industrial
develop a system for comparative market sizing and drivers. The experiences of U.S. officials in diplomatic,
quantifying opportunities for exporters of smart grid technical and commercial settings with additional
ICT and services. market research are used to quantify the
competitiveness of the U.S. smart grid industry in
This report deploys a weighted scorecard system and global markets.
subsector rankings to better assess industry trends.
The weighted scorecard methodology provides a Drawing on developments over the last year, a handful
platform for analysis of different technology sub- of markets saw significant movement in their scores
sectors depending on the weight assigned to the above for Category 1. Spain, Italy, China and Mexico
four factors. Thus, in addition to the overall rankings, underwent shifts in their respective markets to
the Top Markets analysis also ranks markets for the increase their scores from 2015. Russia, Portugal and
potential growth of U.S. exports in the T&D Equipment the Philippines underwent the largest drops. Much of
and the Smart Grid ICT sub-sectors. Essentially, these these shifts can be explained by macroeconomic
sub-sectors are representative of technologies from trends that inform the local commercial setting as
the left side and the right side, respectively, of the explained in Category 3, and affect U.S. interest and
Smart Grid Technology Continuum, (Figure 4) as competiveness in the market. Additionally, the 2016
presented in detail in the next section. report takes into account new climate change policy
announcements and other policies affecting
competiveness.

2016 ITA Smart Grid Top Markets Report | 8

Figure 4: BMI Power Sector Risk/Reward Index, Category 3

BMI Power Sector Risk/Reward Index

High Risk, High Reward Low Risk, High Reward
India
67.0 China

62.0 Vietnam Indonesia

Saudi Arabia
Malaysia
57.0
Korea Australia
Mexico
52.0 Nigeria Turkey
Philppines Canada
Spain

47.0 Japan
Thailand Chile
Israel France Germany
Brazil United Kingdom
42.0 Colombia Poland
Russia Netherlands
Sweden

South Africa Singapore Norway

37.0
Italy

32.0 Austria

Denmark
Reward

New Zealand
27.0

High Risk, Low Reward Low Risk, Low Reward

22.0
40.0 45.0 50.0 55.0 60.0 65.0 70.0 75.0 80.0 85.0
Risk

form the foundation for scores in this category: U.S.

For example, major reforms proposed to power sectors exports of T&D Equipment, trend of U.S. exports over
in China, Mexico and Japan are being implemented to the last two years, and projected electricity
increase competiveness and limit the vertical consumption growth over the next five years.
integration of utilities. As competition is expected to
be introduced, the ITA assesses that the potential for Trending for this category is described in detail in
innovative U.S. firms to supply services – especially ICT Appendix A and the T&D Equipment Sub-Sector
and advanced metering infrastructure – will increase Snapshot. Canada and Mexico continued to account
as local utilities look to gain a competitive advantage for almost half of all U.S. T&D equipment global
and secure (or retain) market share under a reformed exports. Year-to-year trends show that Canada,
system. Sweden, Brazil, Russia, Japan and Singapore
experienced the biggest absolute drops in T&D
Given the significant weight of this category to the equipment exports since 2013, while U.S. exports to
smart grid ICT sub-sector ranking, greater detail on Mexico, Korea and Italy increased most significantly
2016 trends and developments can be found in the over the same period.
sub-sector snapshot.
Projected increases in electricity consumption over the
Trade Factors and U.S. Competitiveness (Category 2) next five years have been scaled back for Colombia,
China and Singapore. Emerging markets such as
As described above, available trade data for all Vietnam, Nigeria, Indonesia and India are anticipated
technologies and services in the smart grid sector to see electricity consumption grow most rapidly –
limits the scope of Category 2 data. Three data sets

2016 ITA Smart Grid Top Markets Report | 9

including increased relative growth projections from • East Asia: Although still growing, China’s economic
2015 among top markets. growth has begun to slow, reducing investment
expectations in domestic infrastructure projects
Key Economic and Energy Sector Investment Indicators and growth trends in electricity consumption.
(Category 3) These effects are being felt regionally as
Singapore, Japan, Korea and Thailand all saw
Macroeconomic market signals in the global economy reductions in investment power scores. For
and energy sector are most apparent in category #3 – example, the Singapore Dollar prospects hit a low
Key Economic and Energy Sector Investment in 2015 not seen since 1998.
Indicators. As outlined in Appendix A and highlighted in • Europe: Economic recessions that plagued parts of
Figure 4, data in this category informs of the relative Europe – such as Spain and Italy – have been
risk to reward ratio for investing in the power sector. countered by policy reforms in recent years that
For example, emerging countries such as India and have begun to make these markets more
China have high reward potential, but also relatively attractive for investment. This is especially
high risk. On the other hand, high-income Nordic relevant as the continent looks to transition its
countries such as Denmark and Sweden have low risk energy sector to address the changing utility
and low reward potential. business model and for energy security purposes.
• India: India is expected to remain largely sheltered
In 2016, China, Russia, Brazil and Singapore saw the from the economic slowdowns plaguing other
most substantial decreases to their economic and large emerging economies, and will benefit from
energy sector investment indicator scores, while India lower commodity prices resulting from low oil
and European markets such as Spain and the prices. Coupled with ambitious policy and
Netherlands saw the most significant year-to-year regulatory plans, India’s energy sector is expected
increases. The following regional economic market to be a pillar of the Modi Government’s near-term
signals also contribute to score changes captured in agenda.
categories 1 and 2. • Russia: Recent events in Ukraine have changed
• Brazil: Brazil is undergoing a deep economic the landscape of the bilateral trade and
recession, and there are expectations of record investment relationship between the United
government budget cuts. Recently unfolding States and Russia. For example, the United States
scandals have affected the government and state- has suspended government-to-government
owned companies, increasing uncertainty and economic cooperation with Russia on many fronts,
creating a drag on economic growth and including the bilateral trade and investment
infrastructure projects. As a result, stricter working group that sought to expand economic
compliance rules that could benefit U.S. and commercial ties.
companies interested in Brazil are being
implemented. Strength of Domestic Industry (Category 4)
• Colombia: Sustained low oil prices have decreased
demand from Colombia’s trading partners, and Data for this category remained consistent between
have led to a loss of domestic tax revenues. The 2015 and 2016, as the data set used for this category is
Colombian peso’s value dropped significantly in updated on a five-year basis.
2015.

2016 ITA Smart Grid Top Markets Report | 10

Industry Overview & Competiveness technologies – including microgrid systems, distributed
energy resource technologies, home building
The smart grid is a modernized electricity transmission management technologies and software, and a wide
and distribution network that includes two-way range of electric utility services – may find this report
communication systems and enables the integration of to be an effective guide to international market growth
technologies that will further improve grid efficiency, and potential export gains.
reliability and security. Depending on the market, a
wide range of equipment and technology will be New in 2016, ITA has included a sub-sector snapshot of
required to modernize the grid. the energy storage industry to better capture this
emerging sub-sector and detail expected applications
Modernization includes the build-out and upgrade of for electrical grid ancillary services and maintenance
transmission and distribution (T&D) networks that deferral globally.
extend electricity services to new populations and also
improve the grid’s efficiency in delivering those The available data for market-sizing and measuring
services. In many markets, modernization goes beyond trade flows varies across the spectrum of technologies
these initial T&D investments to include a range of detailed in Figure 5. The emergent smart grid industry
digital technologies and platforms, including the includes evolving networking and information
deployment and integration of Internet Protocol (IP) technologies that are driving the convergence between
based communications, infrastructure ICT systems to communication and electricity networks. Defining the
better manage increasingly-complex utility networks industry and identifying data points that capture and
and data, and online applications and consumer distinguish smart grid investment are significant
services that enable energy efficiency programs at the challenges to market analysis, particularly those in
“user-end” of the grid. emerging and less developed international markets.

This report considers a wide range of utility Global spending on grid modernization and smart grid
investments in T&D, communications, data technologies has emerged as a major growth segment
networking, IT infrastructure and energy efficiency in the infrastructure sector, and is expected to
services to be part of the worldwide smart grid continue to grow. Various energy market research
opportunity for U.S. exporters. The analyses and groups have pegged market values to range from $15
rankings that are included consider the near-term to $500 billion annually, depending on specific
growth potential for U.S. exporters of the products and technologies that are incorporated into the calculation.
services detailed in Figure 5 and discussed in greater Regardless of the absolute estimated market size, the
technical detail in the T&D Equipment and Smart Grid sector has been on a strong growth trajectory over the
ICT sub-sector snapshots. last decade and will continue to grow.

Additionally, U.S. exporters of related energy According to Bloomberg New Energy Finance,
worldwide annual smart grid spending grew by 12
Figure 5: Smart Grid Technology Continuum

2016 ITA Smart Grid Top Markets Report | 11

percent in 2015, reflecting a five-year CAGR just under generators and require new connections to
4
13 percent. Other energy market research groups, transmission systems. U.S. utilities have a strong
5 6
including GTM Research, Navigant and Transparent interest to address the potential effects of distributed
7
Market Research, predict that annual spending on energy resources and understand how utility business
smart grid sub-sectors will grow anywhere from 5-18 models may change as a result of decreased revenues.
percent annually over the next decade. Predictions
vary dramatically across sub-categories, but spending Policy and regulatory drivers at the Federal and state
in all areas is expected to increase in both established levels for demand response, energy storage, net-
and emerging markets. metering and cybersecurity have also created domestic
drivers for innovation in energy efficiency programs,
The ITA assesses that the current market for all U.S. analytical tools, two-way communication systems and
smart grid exports – including T&D equipment, smart consumer engagements that provide a U.S.
grid ICT goods and services, and energy storage competitive advantage.
technologies – is valued at $30 billion annually. These
exports leverage U.S. investments to upgrade the As these smart grid solutions have advanced in the
domestic electric grid and capitalize on the growing United States, the domestic industry has developed
global market. steadily, and a wide range of U.S. technology and
service companies now lead the global market for
st
Energy, environmental and security needs for the 21 smart grid solutions. Pilot projects and programs by
century have accelerated both public and private U.S. utilities with U.S. suppliers form the foundational
sector investments in grid modernization and smart use-case examples to inform U.S. suppliers looking to
grid technologies across the United States. The Energy export. On the other hand, pilot projects abroad with
Independence and Security Act of 2007 (EISA) made it U.S. suppliers offer the potential to also inform
“the policy of the United States to support the deployments in the regulated U.S. market. The ITA
modernization” of the electrical grid. Federal and state assesses that although there is regional variation to
governments and private sector stakeholders have priority drivers for grid modernization and smart grid
since made major investments in the development and deployment, there is also a pervasive expectation that
deployment of smart grid technologies and programs the global industry is in the middle of a transformation
that are making the electric grid more efficient, and the door is open to innovative firms to capture
reliable, resilient and secure. market share. With international investment growth
and high U.S. competitiveness, the smart grid sector
The American Recovery and Reinvestment Act of 2009 holds great potential for continued and expanded
(ARRA) provided by far the most significant subsidy export growth.
and stimulus to smart grid spending over the last five
years, making the United States the largest smart grid Global Industry Landscape
market in the world from 2009 to 2012. The ARRA
smart grid investments included $4.5 billion in Although the U.S. is amid an active, robust and
government funding for electricity delivery and energy innovative electricity modernization effort, the global
reliability activities to modernize the electric grid, with market is also actively engaged. In 2013, China
an additional $5.5 billion in matching, and additional surpassed the United States, becoming the world’s
funds from private sector stakeholders. Approximately 10
largest market for smart grid spending. Drivers for
$7.5 billion was invested in smart grid deployments the deployment and development of grid
and related utility projects as a result of the ARRA modernization equipment, technology, and services
8
programs. vary by region and sub-sector. A consistent theme
across the world, however, is that utilities are
As outlined in the 2015 release of the Quadrennial concerned with revenue losses resulting from reduced
9
Energy Review’s first installment, U.S. transmission loads driven by efficiency, increased distributed
and distribution systems are gaining a renewed focus energy, and/or theft. Global investment decisions are
on investment. Reasons for increased investment now focused on how to do more with less. This
include reliability enhancement, renewable resources includes looking for ways to increase supply and
connections, demand shifts, cost increases and market demand side energy management efficiencies.
reforms that create more options for independent

2016 ITA Smart Grid Top Markets Report | 12

For emerging economies in Southeast Asia, India, could affect smart grid development, challenge the
Africa and South America, the focus is on reducing pace of deployment, or hinder U.S. competitiveness in
theft and T&D losses while building new infrastructure a given export market.
to meet increasing demand, and bringing electricity to
the 1.2 billion people – 17 percent of the global This report considers common regulatory, policy,
11
population – who currently lack access. business, and technical challenges to smart grid
development, and provides an analysis of their impact
Europe, North America, East Asia, Australia and New on specific markets. These challenges include:
Zealand have increased focus on deploying advanced
metering infrastructure and big data analytics to better • Developing Standards and Achieving
leverage the capabilities resulting from cloud Interoperability: The identification and adoption
computing advancements. Utilities in these countries of international standards for smart grid
are looking to improve systems management as technologies and the need to ensure their
revenues continue to decrease. According to interoperability in order to help drive technology
Bloomberg New Energy Finance, many European development, deployment and operations.
utilities have lost over 50 percent of their market value • Getting the Regulatory Model Right: The need for
since 2010 from deployment of distributed energy energy sector reforms and the development of a
resources and other efficiency gains that led to load regulatory framework that will sustain smart grid
12
loss. investment and enable sufficient economic returns
for the electricity industry.
The U.S. is globally competitive for the supply of goods • Driving Innovation in the Electricity Industry: The
and services to these markets as well as serving as a need for sustainable business models and a
key test bed for new progressive utilities to experiment coordinated industry approach that ensures
with new business models. The U.S. is the third-largest investment in new technologies that help achieve
exporter of T&D equipment, behind China and the benefits of the smart grid.
13
Germany. While limited HTS trade data cannot • Enabling the Consumer: The need for successful
accurately capture global competitiveness in the smart consumer protection and engagement in order to
grid ICT sub-sector, U.S. information technology, help drive demand for smart grid technologies and
networking technology, software and technology ensure value for the consumer.
service firms are widely viewed as ICT industry leaders.
European firms serve as the biggest source of Evolving technologies and policies are driving
competition. investments in the smart grid that could translate into
export returns for the United States. The rest of this
Overall, the growth of the U.S. domestic smart grid report will examine country-level trends and present
over the last five years and increased spending in an analysis of the top prospective markets for U.S. T&D
international markets are now combining to provide equipment and smart grid ICT export growth.
expanded opportunities for U.S. innovators in
international markets. Opportunities

Challenges and Barriers In addition to country and sub-sector specific market

opportunities highlighted in this report, the following
Over the last decade, investment in the smart grid has offers a few key opportunities for the smart grid
grown in every major economy; increased export industry to engage in cross-sectorial initiatives and
opportunities are anticipated for the wide range of global trends.
U.S. suppliers and service providers marketing smart
grid solutions to electric utilities around the world. Climate Change: ITA assesses that the 2015 Paris
However, the development of the smart grid will be Agreement under the U.N. Framework Convention on
unique across – and often within – export markets, and Climate Change likely will be a strong driver for smart
opportunities will vary depending on a nation’s stage grid deployment globally, and that firms positioned to
of smart grid development and specific market enable nations to deliver on their nationally
demands for various technology and services. determined commitments will be best positioned to
Additionally, there are a number of key issues that compete globally. Smart grid technologies that directly

2016 ITA Smart Grid Top Markets Report | 13

facilitate reductions in greenhouse gas emissions and Cybersecurity: Smart grid firms with a focus on
increase the resilience of critical infrastructure to the cybersecurity will find interest in export opportunities
effects of climate change are positioned to capitalize among both developed and developing nations. As the
on the near-term need of the 195 countries that grid becomes increasingly data driven, the privatization
committed to ambitious actions on climate change in of consumer data and protection of critical
December 2015. infrastructure will be of central importance to
policymakers and utilities.
Smart Cities: Smart grid is a foundational component
of the development of increasing “smartness” of global Regional U.S. Government Initiatives: Near-term
cities, and informing integrated resource planning at opportunities to deploy smart grid goods and services
the local level. U.S. suppliers of smart grid technologies for U.S. suppliers are not limited to the markets
will find global opportunities in both greenfield and outlined in this report. ITA notes that U.S. suppliers
brownfield city efforts. World urban populations are may find success in smaller, less-developed markets,
expected to double by 2050; 80 percent of global especially in those that are still developing their
goods and services are produced in cities, according to electricity system. Initiatives such as Power Africa and
14
the World Bank. the Clean Energy Finance Facility for the Caribbean and
Central America highlight commercial opportunities
Internet of Things (IoT): Similar to the “smart cities” supported by development objectives and finance
theme, smart grid technologies are included in the mechanisms provided by multilateral government
suite of technologies included in the IoT. The IoT institutions of lower income nations. These initiatives
reflects the digitalization of process and services that represent a new approach to development that
leverage cloud computing, data analytics, and other prioritizes unlocking and accelerating transactions in
ICT advancements. the energy and infrastructure sector, and building a
more investment-friendly enabling environment.

2016 ITA Smart Grid Top Markets Report | 14

 Sector Snapshots
This section contains sector snapshots that summarize U.S. smart grid export opportunities in each
subsector. The snapshots provide country rankings, export outlook and challenges for each
subsector, along with an overview of the subsector technologies.

2016 ITA Smart Grid Top Markets Report | 15

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2016 ITA Smart Grid Top Markets Report | 16

Transmission & Distribution (T&D) Equipment

State of the Market

Figure 6: T&D Equipment Sub-
Global trade in transmission and distribution (T&D) Sector Rankings (Top 20)
equipment exports saw an overall decline of 4 percent
reflective of the global downward economic trend over 1. Mexico
15
the last year of available global export data (2014). 2. Vietnam
This reflects a return to pre-2011 annual global trade 3. India
revenues following two years of consecutive year-to-
4. Nigeria
year declines in 2013 and 2014, and reduces the CAGR
to 9 percent for the previous decade. 5. Saudi Arabia
6. Malaysia
However, according to the International Energy Agency, 7. Chile
approximately $5 trillion will be invested in T&D 8. Indonesia
16
infrastructure globally from 2015-2030. Thus 9. Canada
suggesting that despite a downward trend in global 10. Philippines
T&D equipment trade, opportunities for U.S. exporters
11. Turkey
will persist.
12. Korea
U.S. Competiveness 13. China
14. Singapore
Overall, U.S. T&D equipment exports have performed 15. Australia
well in recent years. Total export revenues for the T&D 16. Colombia
equipment sector reached nearly $2.0 billion in 2015.
17. Thailand
Exports to Canada and Mexico accounted for almost 45
18. Israel
percent of this total, and the top ten markets makeup
17
over two-thirds. As Figure 7 illustrates, U.S. T&D 19. Poland
equipment exports declined 4 percent year-to-year 20. United Kingdom
from 2014, but still reflect a long-term growth trend
with a 9 percent CAGR over the previous decade. U.S.
ranking, as does electricity demand growth, energy
global market share dropped to approximately 8
supply investment and other factors driving the build-
percent.
out of the grid.
As Figure A4 illustrates, top U.S. T&D export markets do
The top T&D equipment markets are, therefore, more
not completely align with those of all goods. Relative to
likely to be less-mature smart grid markets.
other industries, U.S. T&D equipment manufacturers
Investments in these nations are more focused on the
have captured significant returns in nations like Saudi
foundational grid modernization that is essential to the
Arabia and Colombia.
development of more advanced Smart Grid ICT that is
still to come. Countries that have been long-standing
Rankings
markets for U.S. suppliers of the electric grid rank
higher in this sub-sector. Additionally, Asian markets,
The T&D equipment sub-sector rankings focus on
where connecting new populations to the electric grid
markets with high growth in the products and services
is a priority, will perform well in the T&D equipment
necessary for the build-out, modernization and
sub-sector.
automation of T&D networks. For example, trade in
T&D equipment receives a higher weight in this

2016 ITA Smart Grid Top Markets Report | 17

 Figure 7: U.S. T&D Equipment Exports and Global Market Share

$2.5 10%

9%

Percentage of Total Global Trade in T&D

$2.0 8%
U.S. Export Revenues (Billions)

Total U.S.
Export 7%
Revenue
$1.5 6%

Equipment
U.S. Exporter
Share of 5%
Global Trade
$1.0 4%

3%

$0.5 2%

1%

$0.0 0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: U.S. Census Trade Data via the Trade Policy Information System of the U.S. Department of Commerce: International Trade
Administration

The T&D equipment sub-sector ranking reflects a heavy The projected trend of the electricity sector over the
weight on Category 2, where three data sets form the next five years will influence the T&D equipment sub-
foundation for the scores in this category. The three sector significantly. Projected increases in electricity
data sets are: U.S. exports of T&D equipment, trends of consumption over the next five years have been scaled
U.S. exports over last two years, and projected back for Colombia, China and Singapore, dropping all
electricity consumption growth over next five years. three significantly in the T&D equipment sub-sector
This is described in detail in Appendix A. rankings by 13, 9, and 9 spots, respectively. Factors
attributing to exports are consistent with trends in
Canada and Mexico continue to account for almost half category 3 and are discussed in previous sections.
of all U.S. T&D equipment global exports. Year-to-year Rationale for this is discussed above, as it also affects
trends show that Canada, Sweden, Brazil, Russia, Japan the overall investment climate for the energy sector, as
and Singapore experienced the largest absolute drops included in the Key Economic and Energy Sector
in T&D equipment exports since 2013, while U.S. Investment Indicators discussion.
exports to Mexico, Korea and Italy increased the most
significantly over the same time period. Projected increases in electricity consumption over the
next five years have been scaled back for Colombia,
The decline in T&D equipment exports can largely be China and Singapore. On the other hand, the most
explained by a drop in exports to Canada that rapid electricity consumption growth is anticipated to
accounted for almost half the global decrease. Other occur in emerging markets such as Vietnam, Nigeria,
major trade partner markets with decreasing T&D Indonesia and India; this includes the increased relative
equipment exports since 2013 include Sweden, Brazil, growth projections from 2015 among top markets.
Russia and Japan. This is most obvious in the year-to-
year decrease in T&D Equipment Sub-Sector rankings Full comparison of year-to-year T&D equipment sub-
for Brazil (-17), Japan (-13) and Canada (-7), where it sector rankings is included in Appendix B.
heavily influenced the decrease in Brazil’s overall sector
ranking.

2016 ITA Smart Grid Top Markets Report | 18

Technology, Capability, and Application Trends interconnect. For example, new interconnections are
being built in Poland and Lithuania to complete the
The ITA predicts there are a number of T&D equipment synchronization of the electricity grid with the West as
sub-sector solutions that will be increasingly important European Union countries look to increase energy
as governments and regulators look to implement security and “transition” the energy sector.
policies that expand regional grids, especially in Europe
18
and China, while at the same time increasing the Microgrids
resilience and integration of distributed energy
resources. A microgrid is a local energy grid with control
capabilities to disconnect from the traditional grid and
Ultra-high voltage (UHV) Transmission Lines operate autonomously. The ITA assesses that
microgrids will be increasingly deployed for critical
Co-location of energy resources and electricity load infrastructure, for example, hospitals, to provide
centers is an increasing challenge, especially as nations backup for the grid in case of emergencies. These
and regions look to transmit low-cost renewable energy. systems can also be used to cut costs or connect to a
Coupled with shifts to the urbanization and local resource that is too small or unreliable for
deregulation of electricity markets, electricity is traditional grid use. A microgrid allows an energy
increasingly being looked to travel longer distances consumer to be more energy independent and, in some
from the generation site to the end-user. UHV cases, more environmentally friendly. Industrial energy
transmission lines enable larger amounts of electricity users in locations with unreliable electricity access,
to travel a greater distance, up to three times further such as remote and rural communities, or island
than the traditional high voltage transmission lines, nations, and regions without established infrastructure
with reduced losses and costs. China is currently the are being evaluated as principal candidates for
global leader in deployment of UHV transmission. Brazil, microgrid deployment.
Africa and Europe all have commissioned lines.

Interconnection

This is the physical linking of electricity systems that

allow the transfer of electricity across borders. As
nations look to implement their climate change
commitments, increase energy security, and reduce
costs, ITA assesses that there will be an increased
global focus on building infrastructure and creating
enabling policies and regulations for grids to

2016 ITA Smart Grid Top Markets Report | 19

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2016 ITA Smart Grid Top Markets Report | 20

Smart Grid Information Communications Technologies (ICT)

State of the Market

Figure 8: Smart Grid ICT Sub-Sector
Rankings (Top 20)
Turning to the behind-the-meter and emerging ICT
space, nations deploying advanced metering
1. Canada
infrastructure (AMI), new analytical tools to promote
energy efficiency and distributed energy resource 2. Japan
aggregation, and developing connected smart grid 3. United Kingdom
networks are the focus of the Smart Grid ICT sub-sector 4. Australia
rankings. 5. France
6. China
As demonstrated in Figure 5, there is a diverse array of
7. Mexico
products and services that comprise the smart grid ICT
sub-sector. As highlighted previously, this is expected 8. New Zealand
to grow. For example, smart meter deployment grew 9. Spain
by 15 percent in 2015 with over 622 million meters 10. Saudi Arabia
deployed globally. In 2015, Japan surpassed China to 11. Netherlands
become the largest smart metering market. Bloomberg 12. Germany
New Energy Finance further predicts that smart meter 13. Turkey
deployment will continue to grow at 8 percent CAGR
19 14. Korea
over the next three years. The global market of smart
grid data analytics – AMI analytics, demand response, 15. India
grid optimization, asset management, and other 16. Sweden
analytical tools – was estimated at $1.6 billion in 2014 17. Denmark
with an expectation that it would triple to $4.6 billion 18. Chile
20
by 2022, according to Transparency Market Research. 19. Austria
20. Italy
U.S. Competiveness

As described in previous sections, available trade data necessary for the digitalization of the electricity grid.
for the Smart Grid ICT sub-sector is an acute problem. For example, Australia and Canada have been widely
Understanding U.S. competiveness in this sub-sector is recognized as first-movers in the deployment of smart
largely dependent on qualitative data. U.S. developers meters and advanced metering infrastructure; China is
21
of smart grid analytical tools for demand response and the leading global smart grid investor; the United
other applications are widely recognized as global Kingdom, and other markets in Northern and Western
leaders and are partnering with smart meter Europe and the Asia Pacific region are catching up
manufacturers to deploy solutions. The smart meter quickly. Less-mature smart grid markets, such as Saudi
market is largely dominated by a handful of Arabia, Turkey and Mexico, also rank well on account of
multinational firms, some with significant U.S.-based high U.S. competitiveness and positive signs in the
manufacturing capacity. development of smart grid ICT pilots involving U.S.
partners.
Rankings
The 2016 Smart Grid Top Markets Report Smart Grid
The Smart Grid ICT Sub-Sector rankings focus on ICT Sub-Sector saw a handful of markets make
markets with high growth in the products and services significant jumps in the rankings from 2015. Spain (+17)

2016 ITA Smart Grid Top Markets Report | 21

and China (+11) both rose to crack the top ten rankings cycle air conditioners and water heaters on and off
as ITA assessed that policy and regulatory during periods of peak demand in exchange for a
announcements by both countries' governments have financial incentive of lower electric bills.
set the stage for increased near-term deployment of
ICT technologies. Demand response pilot projects and programs are most
active in the United States, but markets, such as Korea,
On the other hand, Portugal (-10) and the Philippines (- Japan, China and the United Kingdom, have begun to
17) saw the biggest rankings drops year-to-year, largely establish programs and policies to foster growth.
reflective of slowing deployment expectations.
Virtual Power Plants
Full comparisons of year-to-year Smart Grid ICT Sub-
Sector rankings are included in Appendix B. This is the grouping of multiple distributed energy
resources into one aggregated system through
Technology, Capability and Application Trends advanced ICT solutions. Smart meters, advanced
analytics, demand response programs and generation
ITA evaluates that there will be a number of Smart Grid sources, such as rooftop solar, all can be connected and
ICT Sub-Sector solutions that will be increasingly coordinated together to create a system of energy
important as global governments, regulators and resources that can bid into energy markets. Navigant
utilities look to increase efficiencies, integrate predicts that the global virtual power plant market will
23
renewable resources effectively, gain market share quadruple by 2023 to $5.3 billion.
amid increasing competition, engage consumers, and
reduce revenue losses. A selected sub-set of these Prepaid Meters with Advanced Meter Reading
solutions are highlighted as follows.
Electricity meters connected via two-way
22
Demand Response communication platforms for automated meter reading
enable customers to monitor their energy usage and
Demand response provides an opportunity for manage energy costs while ensuring the electricity
consumers to play a significant role in the operation of provider is paid for the service. The deployment of
the electric grid by reducing or shifting their electricity programs that enable customers to advance pay
usage during peak periods in response to time-based through cellular applications are increasingly of
rates or other forms of financial incentives. Demand interest. Additionally, these programs and services help
response programs are being used by electric systems reduce in meter reading costs, better detect electricity
planners and operators as resource options for theft and reduce outage time. ITA assesses that prepaid
balancing supply and demand. Such programs can electricity meters will grow in interest in emerging
lower the cost of electricity in wholesale markets, and nations where theft is high, such as in Africa and South
in turn, lead to lower retail rates. Methods of engaging America.
customers in demand response efforts include
offering time-based rates such as time-of-use pricing,
critical peak pricing, variable peak pricing, real time
pricing and critical peak rebates. It also includes direct
load control programs that allow power companies to

2016 ITA Smart Grid Top Markets Report | 22

Energy Storage
State of the Market 24
Technologies and Capabilities

Improved technology has made storage solutions more ITA considers mechanical and electrochemical storage
efficient, offering both buyers and investors a stronger options, such as batteries, as the most commercially
economic case for investment. Global policymakers are promising. These technologies are at varying stages of
directing funds to storage research and offering development, with some at or near maturity while
subsidies, rebates and other tax incentives. The power others are still in relatively early stages.
industry is increasingly accepting of the fact that
storage can play a part in the modern grid, though • Pumped Hydro: Pumped hydro employs off-peak
there may still be questions on how it should be electricity to pump water from a reservoir up to
incorporated and regulated. The result is that energy another reservoir at a higher elevation. When
storage is closer to global commercial viability than electricity is needed, water is released from the
ever before. In the first three-quarters of 2015, over upper reservoir through a hydroelectric turbine
1.1 GW of new energy storage projects were into the lower reservoir to generate electricity.
announced globally. This technology has the highest capacity of all the
storage technologies assessed because its size is
The United States is at the forefront of storage limited only by the size of the available upper and
technology and market development. Improvements in lower reservoirs. Environmental concerns over
batteries, in particular, are bringing costs down across water and land use, however, have emerged in
the board, leading to increased export opportunities recent decades. In the United States, the earliest
for U.S. firms. According to BCC Research, the global plant was built in the late 1920s, and the last
market for grid-scale battery storage technologies is pumped storage plant was commissioned in the
projected to reach nearly $4.0 billion in 2025, up from 1980s.
$716 million in 2015.
• Compressed Air Energy Storage (CAES): CAES
ITA anticipates that much of the near-term battery and systems use off-peak electricity to compress and
non-battery storage deployment will be used for store air in reservoirs, which are either
frequency regulation. underground caverns or aboveground pipes or
vessels. When electricity is needed, the
Finding additional revenue streams and deployment compressed air is heated, expanded, and directed
opportunities, however, will be integral to the scale-up through an expander or conventional turbine-
of energy storage technologies. Other drivers for generator to produce electricity.
energy storage technology deployment include:
• Maintenance deferrals of transmission and • Flywheel: Flywheels are mechanical devices that
distribution investments and upgrades use rotational kinetic energy to both store and
• Integration of intermittent renewable energy discharge power. They can be charged relatively
resources quickly.

A number of U.S. firms have commercialized products • Lead-Acid Batteries: Lead-acid batteries are the
in this sub-sector. American businesses are well- most commercially mature rechargeable battery
positioned to deliver battery, compressed air and technology available. Lead acid batteries,
other storage solutions to countries that are however, are relatively short-lived, with life-spans
implementing more renewable resources in their grid. of about two years. Before the development of
valve-regulated lead-acid (VRLA) batteries, lead-
acid batteries required frequent maintenance.

2016 ITA Smart Grid Top Markets Report | 23

 Figure 9: Energy Storage Technologies by Power System Value Chain Support

Source: Energy Storage Association, adapted from U.S. Department of Energy and EPRI 2013 Electricity Storage Handbook

They do not offer strong value propositions for • Flow Batteries: Unlike the solid-state batteries
utility-scale storage. described above, flow batteries can store energy
in liquid form or in external tanks, and collect or
• Lithium-ion Batteries: Lithium-ion technology is release power by having those liquids exchange
relatively new, but it has become the foundation ions through a special membrane. The most
for many storage projects in recent years. advanced flow batteries are vanadium redox
Lithium-ion battery costs have decreased batteries (VRBs). Vanadium’s advantage is that its
significantly in recent years, which has ions are stable and can be cycled through the
contributed significantly to new installed-capacity battery over and over without undergoing
of storage. unwanted side reactions. On the other hand,
vanadium is costly, and VRBs have relatively low
• Sodium-Sulfur (NaS) Batteries: Sodium-sulfur energy density.
battery technology holds potential for use in grid
25
services because of its long discharge period of Applications
approximately 6 hours. It is capable of prompt,
precise response to grid needs, but must be Energy storage plays roles in the generation,
operated at high temperatures, which can be transmission and distribution aspects of the electric
problematic for intermittent uses. Most NaS power system. Although the most obvious application
batteries are currently manufactured by a for energy storage may be the balancing of
Japanese company, NGK. intermittent generation resources, applications for
storage are diverse. Firms looking to acquire energy

2016 ITA Smart Grid Top Markets Report | 24

storage technologies are not limited to generators and • Demand shifts and peak reductions: Demand for
vertically integrated utilities. Developers, utilities, energy peaks dramatically a few days a year,
policy-makers and advocates are piloting energy generally during hotter days, leaving the grid to
storage to better understand from where in the operate at a lower capacity the remainder of the
electricity value chain the greatest economic value will year. Storage reduces the need for additional
be derived in order to justify the cost. capacity to serve peak demand and increases the
efficiency of a grid’s capacity.
It is important to consider that deployment of one
device may be used for multiple applications, thereby • Off-grid or low-grid: Storage increases the
increasing the number of available revenue streams. reliability of energy supply in off or low-grid
As outlined in Figure 9, technologies have a few key communities, especially when paired with
features that inform their deployment for specific renewable resources.
applications. Three components that inform the choice
of technology for a specific application include: • Renewable resources integration: Storage is
• Speed the energy can be deployed, or coupled with solar or wind installations to
discharge rate provide home consumers and utilities a way to
• Amount of power deployed (e.g. kilowatts) use their intermittent sources around the clock
• Duration power can be sustained (seconds and/or year-round.
versus hours)
Selected Global Storage Market Case Studies
The following represents a selection of applications
that ITA identifies as strongly amenable for storage. Currently, the United States, Japan and Korea account
for over 50 percent of the global energy storage
• Arbitrage: Storing low-priced energy during market. ITA anticipates that opportunities in energy
period of low-demand and selling it during high- storage will continue to grow in these and other
priced periods countries from the confluence of decreasing costs,
increased understanding of storage’s role in the power
• Frequency regulation: Regulations mandate that grid and a global commitment to cleaner energy.
the AC frequency of grids be held within certain
frames. Storage that can be deployed Demonstration projects and pilot programs are moving
automatically and quickly (generally with a 1 forward across the country – including in California,
minute response time) helps grids keep Hawaii and West Virginia – and are being carefully
continuously shifting supply and demand within a studied and evaluated for market applications. ITA
control area. expects an increase in the number of demonstration
projects in the near-term.
• Load following: Similar to frequency regulation in
that load following manages systems fluctuations, ITA assesses that near-term economic deployment of
it differs in its longer time frame, which can range storage products will be primarily focused on support
from 15 minutes to 24 hours. for ancillary services, such as frequency regulation. In
the long term, creative and flexible deployments of
• Voltage support: The injection of power to storage will be necessary to capture all of the unique
maintain voltage levels in the T&D system under and varying benefits.
normal conditions.
In lieu of sub-sector rankings, ITA examines market
• T&D congestion relief and T&D infrastructure statuses for a small selection of countries. These
investment deferral: Storage is used to increase evaluations are provided below.
energy supply by increasing the load-carrying
capacity of a T&D system. It relieves congestion • Japan: Japan is the largest residential energy
points in the T&D grids and can defer the need storage market in the world with 277 MWh. This
for an investment in infrastructure. is supported largely by a behind-the-meter
storage subsidy program that boosted sales of
26
lithium-ion batteries. Korean producers have

2016 ITA Smart Grid Top Markets Report | 25

 benefitted from the subsidies, which have not encouraging more solar-plus-storage systems had
been renewed for 2016. Significant reforms in been met. The decision, however, was reversed
Japan’s electricity market, which until now has only a month later. Lawmakers are now pushing
been dominated by the country’s 10 vertically- for another three-year extension for the subsidies.
integrated power companies, are bringing new
opportunities for U.S businesses to tap into the • Australia: Australia is emerging as a ripe market
liberalization of a $67 billion Japanese retail for energy storage. The country leads the world in
market. As the Japanese electricity market is residential solar penetration (15 percent), which
reshaped, there will be opportunities for U.S. presents an opportunity for large-scale household
energy storage product manufacturers to offer a deployment of storage. BNEF reported that the
variety of storage solutions to utilities as well as average residential storage system cost fell from
residential consumers. $2700/kWh in 2014 to $1000/kWh in 2015. With
high electricity costs, Australia is particularly
• China: There are over 50 energy storage suitable for storage systems that offer good value
demonstration projects in the planning and propositions for households. Storage can also be
operating stages in China. The country is already applied to help defer T&D investments and
using batteries to smooth wind and solar outputs, service Australia’s micro, low and off-grid
and it is expected to introduce other large-scale communities.
energy storage technologies to meet growing
energy and flexibility needs. Similar to the United • Korea: KEPCO plans to deploy 500 MW of energy
States, China is evaluating how to classify, use storage for frequency regulation by 2017. This
and regulate energy storage as part of generation, includes three projects in Kokam, Korea that have
load management, and/or T&D. Despite China’s already been deployed: two lithium nickel-
heavy clean energy investments, it is still behind manganese cobalt (NMC) oxide energy storage
the U.S. when it comes to energy storage systems (ESS) at 24 MW (9 MWH) and 16 MW (6
th
technology. China’s 13 Five Year Plan, to be MWH) and a 16 MW (5 MWH) lithium titanate-
released in March 2016, has a renewed oxide (LTO) ESS. These projects are the largest
commitment to clean energy and specifically frequency regulation NMC ESS and LTO ESS
includes storage. globally and, together, are estimated to save
KEPCO $13 million annually by reducing the
27
• Germany: Battery-makers such as Tesla have amount of fuel purchased. Lithium-ion batteries
benefitted from Germany’s rebates for solar-plus- are driving the project, which is no coincidence as
battery household systems. The rebate program Korea has become a dominant player in this
has returned 30 percent of the cost of the system, sector. ITA projects that Korea, along with Japan,
an average of $4000, to households, and was will continue to innovate and drive down the
coupled with low-interest loans for other various costs of lithium-ion batteries.
renewable energy storage systems. When the
subsidies expired in November 2015, Germany
announced that this was because the goal of

2016 ITA Smart Grid Top Markets Report | 26

 Country Case Studies

The following pages include country case studies that summarize U.S. smart grid opportunities in selected
markets. The overviews outline ITA’s analysis of the U.S. export potential in each market and offer
recommendations to exporters that can improve their competitiveness. The markets represent a range of
countries to illustrate a variety of points – and not the top markets overall.

2016 ITA Smart Grid Top Markets Report 27

This Page Intentionally Left Blank

2016 ITA Smart Grid Top Markets Report | 28

Brazil

Brazil’s top markets ranking is affected by the nation’s economic and

electricity demand growth, as well as by a policy and regulatory Smart Grid Overall
ICT Rank
environment that may constrain investment and exporter opportunities
in the energy sector. Brazil is currently the largest electricity market in 33
Latin America and is an important global emerging market, but smart grid
T&D
deployments have been slowed by regulatory and technical hurdles. The
Equipment
business environment for U.S. smart grid exporters, where strong local
partnerships and longer timelines for investment are usually required of
26 32
foreign entrants, has been challenging as well.

U.S. exports of transmission & distribution (T&D) solutions to these problems, financed mostly through
equipment have grown in recent years and public and utility industry debt, keeping consumer
investments in Brazil’s power infrastructure will need electricity prices relatively low.
to continue in order to meet growing electricity
demand, particularly in urban centers that are Privatization and competition have been limited in
distanced from traditional hydropower sources. Brazil’s power supply and services markets, with the
Brazil’s leadership has intensified its efforts to meet state-owned Centrais Elétricas Brasileiras (Eletrobrás)
electricity supply challenges, often at the expense of controlling about one-third of total installed capacity
utilities. The utility finance environment has suffered and a handful of state-owned companies generating
as a result and smart grid ICT investments have been most of the rest. Transmission lines in Brazil are largely
delayed. The unfolding scandal connected to energy state-owned as well, and the Operador Nacional do
giant Petrobras poses another challenge to Sistema Elétrico (ONS) is a nationwide operator.
government and business, increasing uncertainty and Privatization and competition have gone much further
creating a drag on growth. in the distribution segment, where there are more
than 60 providers across the country. While state
Sustained opportunities for U.S. suppliers of T&D governments are allowed monopolies over their
infrastructure are expected in Brazil, along with limited electricity markets, many have been privatized.
opportunities for technology and solution providers in Approximately 70 percent of distribution companies
the Advanced Metering Infrastructure sub-sector. rely to some degree on private capital. A number of
However, given the economic recession, this market distribution company concession contracts have been
will be more difficult for U.S. suppliers in the near renewed.
term. Continued engagement with key stakeholders on
regulatory and commercial issues affecting Brazil’s Growth in Brazil’s electricity consumption decreased in
smart grid market will be required. 2015 and is expected to be slow to resume its growth.
It is predicted to increase at an average of 1.3 percent
28
Market Overview annually between 2015 and 2020, driving a need for
further investment in infrastructure. Beginning in
Brazil’s electricity market is heavily dependent on 2012, Brazil’s government set out on an ambitious plan
hydroelectric power plants with approximately 80 to increase and diversify its energy mix, with goals to
percent of its electricity generated through invest approximately $235 billion and install 36
hydropower in an average year. Droughts, however, Gigawatts (GW) of hydropower, 12 GW of biomass and
can severely restrict the country’s electricity 11 GW of wind over the course of10 years.
generation. Increased volatility of supply and rising
wholesale electricity costs have been the headline- Although Brazil has supported renewable energy
making trends of recent years for Brazil’s power sector. projects, particularly wind, transmission infrastructure
Public officials have focused on short-term funding has been inadequate, delaying a number of projects.

2016 ITA Smart Grid Top Markets Report | 29

 Overview of ITA’s Analysis: BRAZIL

Strengths
• Investments in new power sources and transmission build-outs to ensure adequate supply are a national
priority
• Renewable resources growth is beginning to pick up and will drive further T&D investments and
opportunities for more advanced smart grid applications
Key Trends
• Continued investment in transmission despite economic headwinds
• Regulatory, technical and business environment issues holding back growth potential in distribution and
smart grid segments
• Droughts which increase the political will and need to explore non-hydropower resources, such as wind
and solar energy
Risks
• Utility finance environment requires reforms to support necessary investments in next stages of grid
modernization.

Brazil now requires that projects involved in energy industrial consumers have the option of purchasing
auctions prove that they have transmission lines from the unregulated market.
secured prior to participating in the auctions. This will
reduce the problems of delays associated with In 2011, Brazil released its “Ten Year Energy Plan” and
insufficient transmission infrastructure while helping set a goal of adding 18 GW of renewable resource
drive the market for T&D equipment. capacity by 2020. The expanded renewable supply is
intended to diversify the energy supply mix and help
Poor energy efficiency and average electricity losses in Brazil meet its goals to reduce greenhouse gases, with
excess of 15 percent are also pressing issues impacting a reduction of emissions of 37 percent by 2025 and 43
Brazil’s market. Aging transmission lines delivering percent by 2030, compared to 2005 levels as part of its
power over long distances combined with rampant 2015 UNFCCC INDC. Renewable energy projects in
electricity theft in segments of the distribution Brazil – particularly locally sourced projects – receive
network are largely to blame. favorable financing in Brazil, and electricity produced
from renewable sources with capacity less than or
The need to upgrade infrastructure is a common equal to 30 megawatts (MW) receives a 50 percent
refrain in Brazil, but meeting the need has proved reduction in T&D tariffs.
difficult. In 2012, Eletrobrás announced plans to invest
heavily across generation, transmission and In December 2015, Minister of Mines and Energy,
distribution over the following two years, but it failed Eduardo Braga, launched a multi-agency distributed
to reach its targets. The company subsequently cut its generation initiative (Pro-GD) that hopes to attract $25
workforce and cited an imbalance between high billion in investment by 2030. This included the
generation costs and electricity tariffs that have been announcement to install 2.7 million solar units to
largely suppressed by national and state governments. increase Brazil’s non-hydropower renewable resources
share from 13 percent to 23 percent, where less than 1
Policy and Regulatory Environment percent is currently derived from solar energy. The
initiative is also expected to lower CO2 emissions by 29
Brazil’s electricity market is regulated by the National million tons to contribute to Brazil’s goals of cutting
Electricity Agency (ANEEL), and the Ministry of Mines greenhouse gas emissions.
and Energy (MME) leads energy policy developments.
In late 2013, Brazil’s first “solar only” energy auction
ANEEL regulates public tenders for electricity sold to attracted bids among the lowest in the world, bringing
distribution utilities, sets tariffs for residential Brazil closer to achieving the world’s cheapest solar
consumers in the regulated market, and is responsible contract prices – without subsidies. Renewable
for maintaining an economic balance that enables resources auctions have continued to do well
distributors to cover operating costs and recover an throughout 2015 with almost all projects awarded.
adequate return on investment. Meanwhile, a
liberalized and unregulated system governs electricity ANEEL further predicts that revisions to its net-
trading between independent energy suppliers, and metering policies instituted of the last year will

2016 ITA Smart Grid Top Markets Report | 30

increase opportunities for aggregation of sources and utilities with higher-income consumer footprints will
increase the number of small customer units installed require advanced smart grid solutions to a range of
to 1.2 million by 2024, amounting to 4.5 GW of power management challenges.
installed capacity. For example, this new rule also
enables “shared generation,” where interested parties Opportunities and Challenges for U.S. Companies
are allowed to create a consortium, or cooperative, to
install a micro or mini-distributed generation unit, up U.S. suppliers continue to find export success in Brazil’s
to 75 kilowatts or up to 5 megawatts, respectively, to T&D sector, where projects are continuing apace
reduce the electric bill of the parties. though economic and political issues that pose a threat
to future growth. Opportunities for transmission to
Despite the long-standing goal of nationwide connect areas of energy supply growth, in particular,
deployment, Brazil’s smart meter market has wind, to growing demand should be a focus. As the
experienced a number of false starts and the integration of new power sources moves forward,
regulatory environment has not developed favorably many Brazilian utilities will require more advanced
to drive deployment. In 2012, ANEEL approved a long- power management solutions. Brazil continues to be a
awaited resolution establishing requirements for smart challenging market for U.S firms to do business, and a
meters, but the regulator limited the classes of great deal of upfront work to overcome both cultural
consumers for the roll-out. The smart grid market is and technical issues is required of technology firms in
still eagerly awaiting additional technical regulations particular.
from both ANEEL and Brazil’s lead standards body,
INMETRO, that will finally kick-off deployment. Opportunities
 Transmission build-outs and solutions to ensure
Brazil’s Energy Efficiency Program (EEP) mandates supply/demand balance
distribution utility spending in energy efficiency,  Distributed generation management as sector
requiring about $250 million to be invested annually. grows
Restrictive program requirements, however, have  Electricity delivery and demand side management
limited the effectiveness of spending, and the wider solutions as smart grid deployments advance in
energy efficiency market in Brazil has been stifled by a 2015
high cost of capital for financing deals.
Challenges
Market Analysis  Utilities have been forced to shoulder the financial
burden of meeting recent electricity demand
Brazil’s electricity needs and investment in large growth, and an improved regulatory and financial
infrastructure projects through the 2013 period of environment will be required to drive future
economic growth have been important growth drivers investments.
for U.S. suppliers of grid modernization equipment and
services. In 2013, U.S. T&D equipment exports to Brazil Know Your Buyer
more than doubled to over $94 million in revenue.
Imports, however, dropped to resume modest growth Brazilian purchasers of U.S. smart grid goods and
in 2014 and decreased to $40.9 million in 2015. services include generation, transmission and
Coupled with the increased economic downturn Brazil distribution companies. For example, according to the
dropped in the Smart Grid Top Market rankings to #32. Brazilian Electric Power Utility Association (ABRADEE),
there are 64 electric power utilities in Brazil, with 74.1
Beginning with the Lula administration, Brazil set million consumer and 2 million new connections every
ambitious goals for its national smart grid deployment, year.
but the market has been slow to develop. The smart
grid regulatory and business environment has fallen Summary of Resources
short of expectations. Once the technical hurdles are • U.S. Department of Commerce, Country
overcome, the market expects significant investment Commercial Guide:
in smart distribution solutions that can solve the http://www.export.gov/ccg/brazil090732.asp
problem of electricity theft. While the smart meter • Brazilian Ministry of Mines and Energy
market is likely to be limited to an estimated $500 (MME): www.mme.gov.br
million in the near-term, some of the larger, urban

2016 ITA Smart Grid Top Markets Report | 31

• Brazilian National Electrical Energy Agency • Eletrobrás: www.eletrobras.com.br
(ANEEL): www.aneel.gov.br • Empresa de Pesquisas Energéticas
• Brazilian Electrical and Electronics Industry (EPE): www.epe.gov.br
Association: www.abinee.org.br

2016 ITA Smart Grid Top Markets Report | 32

Canada

As the United States’ top trading partner and a world leader in advanced
smart grid deployment, Canada ranks first overall in the Top Markets Smart Grid Overall
ICT Rank
Report. U.S. exporters are highly competitive and face minimal barriers to
doing business in Canada, which is far and away the top export 1
destination for U.S. T&D equipment manufacturers. There is still a high
T&D
potential for growth in this market as Canada needs to invest in its aging
Equipment
electricity infrastructure, and certain provinces, such as Alberta and
Ontario, are currently planning multi-billion dollar build-outs and
9 1
upgrades to transmission lines.

In the Smart Grid ICT market, energy policy drivers should be a major driver of T&D and smart grid
and regulatory frameworks are in place to help investment for years to come. Eighty percent of
sustain growth and incentivize utility investment in power-generation facilities in Canada are scheduled
new applications, including demand response and to be replaced in the next 10-15 years and Natural
consumer energy efficiency programs. Resources Canada’s 2011 Clean Technology Report
estimated that the smart grid industry in Canada will
It is important to note that provincial policies and grow between $520 million and $2.1 billion by 2020.
regulations play a dominant role in Canada’s energy
sector, where power sector regulation authority Each province is planning further T&D infrastructure
resides with the provincial governments. Therefore, upgrades and modernizations, including new
smart grid opportunities will vary across provinces transmission line deployment.
accordingly. Still, Canada has been a global leader in
areas like smart meter deployment with rollout across Today, the majority of Canadian households have
all provinces near completion. Ontario was one of the “smart” or “advanced” meters installed. Although
first provinces to complete smart meter deployment. annual deployments of smart meters nationwide
Further major investments are anticipated in British slowed in 2013 as the deployment was near
Columbia’s energy efficiency market, Quebec’s completion, Bloomberg New Energy Finance predicts
advanced metering infrastructure, and Ontario’s deployments to remain at approximately 1 million
market for non-generation regulation resources and units per year through 2018.
services.
While all provinces have deployed smart meters to
Market Overview varying degrees, Ontario is by far the largest market
and the nation’s leader in terms of smart grid
Canada’s large territory is endowed with a rich and applications, including the utilization of time-of-use
varied set of natural resources, enabling the country (ToU) pricing. Importantly, other cities and provinces
to rank among the five largest energy producers appear to be following Ontario’s lead. Montreal has
globally. Canada is the largest foreign supplier of embarked on a new round of smart meter
energy to the United States, having supplied 62 billion deployment and is moving toward ToU pricing. While
kilowatt hours of electricity in 2013 alone. Canada Alberta and British Columbia are not planning to
currently has an estimated 133 GW of installed switch to ToU in the near-term, both provinces
electricity generation capacity, dominated by continue to invest in energy efficiency programs.
hydropower (approximately 77 GW), but with a
growing share for wind energy due in part to highly Policy and Regulatory Environment
supportive federal and provincial policies.
Canada’s ongoing efforts to transition its power Canada’s 10 provinces and three territories each
supply and upgrade its electricity infrastructure govern their own natural resources, and each

2016 ITA Smart Grid Top Markets Report | 33

 Overview of ITA’s Analysis: CANADA

Strengths
• Top trading partner
• Policy drivers and facilitative regulations in place
• Market access and high U.S. competitiveness
Key Trends
• Continued leadership in transition to renewable resources
• Mature smart meter market with moderate growth
• Opportunities for time of use, demand response, and other advanced applications
Risks
• Provincial-level regulations are key
• Privacy and cyber security issues currently being addressed

province has developed an electricity grid and market Top Markets Analysis
that is largely independent, though border provinces
are well-integrated with the U.S. grid to facilitate Canada is one of the most advanced countries in the
north-south trade. The North American Electric world in terms of its smart grid development.
Reliability Corporation (NERC) oversees electricity According to a 2012 report, Canadian awareness
trade and reliability in Canada, similarly to its role in levels of smart meters are higher than those of the
the United States, including in the development of United States, and the potential for consumer energy
standards for most provinces. efficiency programs to drive additional savings for
both households and utilities were shown to be
Due to its large hydropower endowment, electricity positive. Due to the fact that parts of Canada are at
prices in Canada have traditionally been among the an advanced stage of smart grid deployment,
lowest in the world. Anticipated investment in aging opportunities for highly competitive U.S ICT firms will
electric power infrastructure and the shift towards be ripe. With a shared transmission network and a
non-hydro renewable and low-carbon sources will history of cooperation on standards, issues of
likely increase prices over the next decade. interoperability for U.S. smart grid exporters to
Canada will be minimized.
At the national level, Canada’s energy policy is
increasingly driven by climate change targets. In 2010, Electricity sector regulations throughout Canada
the Canadian Government announced its target of 90 continue to facilitate smart grid deployments and
percent emission-free electricity by 2020. Federal support energy efficiency as a tool to meet climate
regulations require that plants reduce GHG emissions and energy policy goals for the country. Ontario has
to no more than 420 metric tons on average of CO2 been a world-leader in smart grid deployment and is
per gigawatt hour of electricity produced, though helping to drive developments in the rest of Canada
most provincial policies are actually accelerating the as well. Over 2.6 million customers in Ontario can
transition from coal in their jurisdictions, with Ontario now access their smart metering data through a
being the first to eliminate coal based generation in “Green Button” format that enables energy
2015. A new Canadian Prime Minister, Justin Trudeau, monitoring and opens the market to a variety of
was elected in October 2015 and has since pledged consumer energy efficiency applications.
his commitment to prioritize renewable energy
policies, which should have positive effects on smart Ontario is also at the forefront in addressing issues
grid deployment as well. arising at the leading edge of smart grid technology
deployment. Led by its Information & Privacy
Canada and the provinces have taken important steps Commissioner, the province is working to address
to help finance investment in the clean energy sector, consumer privacy concerns and reach out to the
and private and public stakeholders alike are smart grid business community with the Privacy by
cooperating on research and development and other Design international standard. These efforts,
projects that are open to international suppliers and combined with commitments by both utilities and the
partners. public to improve energy efficiency, will help drive
opportunities in Canada’s smart grid ICT market that
are matched by few other international markets.

2016 ITA Smart Grid Top Markets Report | 34

Opportunities and Challenges for U.S. Companies  Microgrids (Ontario; Quebec)
 Energy Storage (Ontario; Quebec)
In 2015, Canada was the top ranked market for U.S.
T&D exports, with $556 million in export revenue. The Canada is also advancing the development of its
need to upgrade and extend Canada’s aging electricity electric vehicle (EV) market. Quebec and Ontario now
infrastructure to meet household, commercial and offer electric vehicle rebates and have implemented
industrial demands will be a major driver of other incentives. British Columbia Hydro is currently
investment and opportunity for U.S. T&D equipment developing guidelines for the underlying smart grid
manufacturers. Recent investments include a $3 infrastructure needed to support additional EV
billion project to construct two 500-KV transmission adoption.
lines in Alberta, and a $1 billion Lake Erie Clean Power
Connector connecting the province to Pennsylvania Know Your Buyer
through underwater transmission lines.
Canadian purchasers of U.S. smart grid goods and
In the Smart Grid ICT realm, the relatively wide spread services include generation, transmission and
deployment of AMI in parts of Canada is now driving distribution companies.
additional investment in utility IT systems and analytic
software platforms and applications. Opportunities Summary of Resources
also exist for energy efficiency programs and systems
marketed directly to consumers. There are a number • U.S. Department of Commerce Canada Country
of smart grid segments that continue to develop in Commercial Guide:
Canada, with higher growth expected in certain
http://www.export.gov/ccg/canada090978.asp
provinces that are developing emerging markets for
the following technologies and applications: • Canadian National Energy Board:
 Advanced Metering Infrastructure (Alberta; http://www.neb-one.gc.ca/index-eng.html
Quebec) • Innovation, Science and Economic Development
 Household ToU Rates (Quebec) Canada: https://www.canada.ca/en/innovation-
 Demand Response (BC; Alberta) science-economic-development.html
 Outage Management (Ontario; Quebec; BC)
• Statistics Canada:
 Reactive Power Control Systems (Alberta;
Manitoba; BC; Quebec; Ontario) http://www.statcan.gc.ca/start-debut-eng.html

2016 ITA Smart Grid Top Markets Report | 35

This Page Intentionally Left Blank

2016 ITA Smart Grid Top Markets Report | 36

China

As the world’s largest market for electricity infrastructure development Smart Grid Overall
and smart grid technologies, China offers great opportunities for U.S. ICT Rank
exporters, particularly suppliers and service providers in the areas of high 6
voltage transmission, synchrophasor technology and modernization of
transmission operations, and partnerships in Smart City and select smart T&D
grid projects. Equipment
13 7

U.S. T&D equipment export revenues to China China’s government has made significant, recent
exceeded $54 million in 2015, reflecting a two year statements regarding its intent to reduce carbon
decrease and the lowest export levels since 2006. emissions, including bans on new coal-fired power
After a period of very high electricity consumption plants in certain regions and the creation of a national
growth, China is shifting its economy, and growth is carbon trading system by 2017. Such measures will
expected to slow. ITA, however, expects continued apply major pressure to the power sector and likely
investment in electricity infrastructure and accelerate the market for non-coal-fired generation,
opportunities for U.S. suppliers of T&D equipment and as well as for smart grid and energy efficiency
an increase in opportunities for smart grid ICT solution technologies and services. Currently, overall growth of
providers to increase. China’s power sector is estimated at 2 percent, but the
markets for renewable energy development, energy
With smart meter procurements underway, the efficiency investment and smart grid technologies
government is showing a commitment to diversifying grew at approximately 16 percent, 25 percent and 34
its energy mix, reducing carbon emissions, and percent, respectively, in 2013.
increasing energy efficiency. China leads the world in
new investment in the full suite of smart grid Investment in the modernization of China’s electricity
technologies. While the bulk of smart grid infrastructure and the development of a “unified
technologies for China’s distribution network will be strong and smart grid” have been a focus for the
provided by local suppliers in the near term, country’s power sector since 2010. China’s largest
opportunities will grow for firms providing solutions to vertically-integrated T&D company, State Grid
operational and network efficiency, renewable Corporation of China (SGCC), has largely kept pace
th
integration and management, demand side with goals outlined in the country’s 12 Five Year Plan
management, and end-user energy efficiency (FYP) for 2011 through 2015 to boost grid investment
challenges. by 68 percent over the period, particularly in ultra-
high-voltage transmission lines. This trend is expected
Market Overview to continue with SGCC tapped to invest $243.2 billion
th
(CNY 1.6 trillion) as outlined in the 13 FYP (2016
China’s electricity market is dominated by coal, but through 2020). The challenge of connecting major
this has been dropping in share over the last two years, hydro and wind resources to distant population
as the government is now primarily interested in centers continues to be a major driver of China’s
improving urban air quality. Investments in renewable growing T&D market.
resources and nuclear energy have grown and are
expected to contribute the most to an expanding China also has commitments to massively expand its
electricity supply that will be necessary to meet use of smart meters. Through 2015, tenders for 425.8
29
anticipated average demand growth rates of 4 percent million smart meters have been contracted. Annual
per year over the next five years. investment in smart metering was estimated to be
$1.4 billion in 2015 and was predicted to reach $2.9
30
billion in 2016. In 2020, China is expected to account

2016 ITA Smart Grid Top Markets Report | 37

 Overview of ITA’s Analysis

Strengths
• China’s government is making a push to reduce the carbon intensity and use of coal in its economy,
largely through improving energy efficiency
• China is planning to install smart meters in every household by 2017, and then institute country-wide
time-of-use electricity pricing
Key Trends
• Electricity consumption in China is continuing to rise as China’s economy continues to expand rapidly,
though the nature of economic growth is expected to have more growth in the less-energy-intensive
service industry
• China’s electricity mix will begin shifting away from coal and towards cleaner energy sources,
necessitating the build-out and modernization of grid infrastructure
Risks
• Chinese firms have substantial market shares in the smart grid sector, supplying most of the smart
meters currently produced at prices below U.S. products
• More favorable labor markets give Chinese manufacturers an advantage over U.S. manufacturers in
commoditized products, so as these products mature, the U.S. advantage on these technologies will
diminish

for over 24 percent of the global smart grid market at power grid operators from generation companies is all
around $96 billion, according to GTM. that has been achieved to date.

Policy and Regulatory Environment Electricity prices are currently separated into
residential, agricultural, and commercial & industrial
The electricity market in China is heavily regulated, (C&I) tiers, with additional levels of granularity –
with power prices at the both generation and including peak and trough pricing – offered to C&I
consumption levels being set by the government. customers. The NDRC determines the profit margins of
Although China has begun liberalizing the generation generators, and can determine prices and incentives
sector, it is dominated by five state-owned utilities according to supply-type.
that control almost half of total capacity, and the
transmission and distribution grid is entirely controlled In order to balance electricity supply and demand,
by three state-owned operators. China is increasingly focused on energy efficiency
opportunities, including the implementation of
The National Development and Reform Commission demand side management (DSM) programs. Beginning
(NDRC) plays a critical role in China’s electricity market in 2011, NDRC mandated peak load reductions for grid
as the primary price-setter and regulator. It also companies of 0.3 percent annually, and has since
develops and implements major policies that affect endorsed Suzhou, Beijing, Foshan and Tangshan as
the wider economy and energy sector, where energy DSM pilot cities. Energy Service Companies (ESCOs)
policy planning primarily falls to the National Energy and technology solution providers work with end-
Administration, a sub-agency within NDRC. The NDRC users and utilities in these cities to achieve energy
currently dictates the pace of privatization and savings through Direct Load Control technologies,
liberalization of China’s energy markets, including the interruptible tariff programs, smart metering
involvement of foreign competitors. solutions, and time-of-use (ToU) pricing options. ToU
pricing is available to roughly 66 percent of
31
As part of China’s stated effort to open up the commercial and industrial consumers.
electricity sector, the NDRC allows limited foreign
investment in the construction and operation of the As the electricity provider for over 1 billion customers
power grid. Other market reform objectives for and 88 percent of the Chinese Market, SGCC has an
China’s energy sector include the unbundling and investment portfolio and operating policies that all
separation of owners, operators and various business have a major impact on the power market. Beginning
units across the electricity supply chain and the in 2010, the grid operator earmarked over $40 billion
creation of an open wholesale electricity market. for smart grid technologies. Although SGCC has
Progress has been slow: the separation of some of the delayed its deployment goals, combined with China

2016 ITA Smart Grid Top Markets Report | 38

Southern Grid the firms are set to install of another consumption per unit of GDP, or “energy intensity,” by
280 million smart meters is expected over the next 16 percent from 2010 to 2015 and has since scaled
five years. Additionally, SGCC has updated its grid this back to 15 percent with a total energy
connection policies to enable the expanded consumption cap of 5 billion tons of coal equivalent by
installation of distributed energy resources. In order to 2020.
better integrate and manage these resources, the
utilities are expected to invest almost $7 billion in Opportunities
distributed automation technologies over the next five  Continued, though declining, opportunities in T&D
32
years. infrastructure, particularly high voltage
transmission.
Top Markets Analysis  Increasing demand for network management
technologies and applications following
Spending on electricity infrastructure and the smart modernization of China’s substations.
grid in China is expected to far outpace that of any  Energy efficiency programs and projects with
other international market for at least the next five industrial and municipal partners, particularly
years. Success over the period for foreign suppliers, green data center segment.
however, will be limited because of the focus on  Microgrids, as China accelerates their construction
developing basic infrastructure and larger business and distribution of other energy resources.
issues that constrain exporters’ commercial
opportunities in China’s energy sector. Challenges
 The Chinese electricity market is opaque:
China’s Smart Grid Top Markets ranking remained incumbent suppliers are favored, and government
unchanged in 2016. Though it had a slower economy intervention to support local firms and production
and lower T&D equipment imports, China countered is common.
this with significant overall power sector investments,  Local partnerships are key to success. A
government policies and a commitment to grid coordinated effort to support U.S. industry
modernization. A reliance on local suppliers, the lack involvement in major projects, like smart cities, will
of opportunity for foreign suppliers of advanced smart be required.
grid technologies, and a poor competitive
environment for U.S. firms, however, all have negative Know Your Buyer
effects on China’s ranking.
Chinese purchasers of U.S. smart grid goods and
Opportunities and Challenges for U.S. Companies services include generation, transmission and
distribution companies. SGCC and China Southern Grid
Despite the huge investments being made in grid remain the primary purchasers of smart grid
modernization and smart metering, the market for technologies.
U.S. firms in China is significantly limited by the
challenge of incumbent local supply chains and Summary of Resources
technical interoperability issues, particularly in the
distribution network. The market for demand DSM • U.S. Department of Commerce China Country
technologies that help reduce peak load and overall Commercial Guide:
power consumption by end-users, however, is an area http://www.export.gov/ccg/china090765.asp
of potential growth for U.S. exporters that have
• People’s Republic of China, National Development
already deployed and proven these technologies at
home. China fell short of its goal to reduce energy and Reform Commission: http://en.ndrc.gov.cn/

2016 ITA Smart Grid Top Markets Report | 39

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2016 ITA Smart Grid Top Markets Report | 40

India

India’s Smart Grid Top Market rankings are bolstered by a fast-growing

Smart Grid Overall
economy and electricity sector. Ambitious government policies for energy ICT Rank
access, renewable resources deployment and development of “smart 15
cities” send positive signals for the smart grid market. Challenges remain,
especially in relation to access to financing. T&D
Equipment
3 8

U.S. T&D Equipment sales to India were valued at Electricity theft continues to run rampant, and hurdles
$12.8 million in 2015 and reflect only a 2 percent to rural and urban Indians paying for power remain,
CAGR over the last five years. Despite market thus affecting availability of capital by Indian
challenges, the Indian market remains attractive as transmission, distribution and generation providers to
U.S. exporters look to tap into an electricity sector that invest in grid modernization and expansion.
is expected to grow at one of the fastest global rates
among all major economies. T&D remains dominated by the government, with the
overall private sector role limited to 1 percent in
Market Overview transmission and 5 percent in distribution. One of the
biggest challenges facing these entities is T&D losses,
For the administration of Indian Prime Minister which on average are very high – 8 percent at
Narendra Modi, the largest and most perplexing transmission level and 26 percent at distribution level,
challenge is arguably addressing India’s significant nationally. Several large states even report more than
need for power. India currently is home to 18 percent 40 percent distribution losses.
of the global population, but only accounted for 5.7
percent of the global energy demand in 2013. India The Power Grid Corporation is the owner, operator
runs at an average energy deficit of 5 percent with (under its subsidiary the Power System Operator
values as high as 25 percent in some regions, leading Corporation Limited) and developer of the national
to daily rolling brownouts, hampering economic interstate power transmission grid. In 2009, the
growth and limiting foreign investment in the country. National Load Dispatch Center began supervising
The July 2012 blackout that affected 620 million regional load dispatch centers, scheduling and
people was, for example, seen as a global dispatching electricity, and monitoring operations of
embarrassment and remains a politically contentious the national grid. In 2013, five regional grids were
33
topic to this day. ultimately united into one synchronous national
system, but interconnections are largely thought to
As a result, the administration’s flagship power sector remain inadequate with control technologies still out
initiative has been the pledge to ensure continuous, of date. Power Grid Corporation has stated that it
24 hours a day/seven days a week (24/7), power for all anticipates spending $18 billion in the next five years
Indians. This will require bringing electricity to the to extend and upgrade the Indian power grid to
over 300 million people who currently lack any access include smart technology. This, however, is only a
and substantially improving electricity access to the small fraction of the $50 billion that the Ministry of
additional 250 million people whose intermittent Power has indicated is necessary over the next decade
electricity access may be limited to only three to four to modernize the grid.
34
hours a day. Bloomberg New Energy Finance
estimates that to realize its electricity access targets, The power distribution companies (DISCOMs) handle
generation capacity will need to increase fourfold, and electricity sales and retail to commercial and
$750 billion in new investment will be required by residential customers, but industrial customers also
2030. have the opportunity to buy directly from the
generators and wholesale market. The distribution,

2016 ITA Smart Grid Top Markets Report | 41

 Overview of ITA’s Analysis: INDIA

Strengths
• Growing electricity consumption
• Ambitious government policies to increase access and reliability of electricity
Key Trends
• Smart cities initiatives providing potential local project opportunities
• Distribution companies are cash poor
Risks
• Access to financing is a challenge

sales, and retail markets are largely handled by the generated from renewable energy in rural locations to
36
regional governments in Delhi and Odisha states and load centers throughout the country. In 2014 to
the City of Mumbai, with Kolkata, Ahmedabad, and 2015, India reported that $2.7 billion was raised, and
Surat municipalities having private companies the NCEF used this to fund 46 clean energy projects.
engaged in electricity distribution. India’s DISCOMs are The effectiveness of the NCEF in directing funds to
largely not profitable. The government continues to new projects, rather than paying off debt from
direct cash to the DISCOMs to bail them out of debt, previous clean technology infrastructure projects, has
while still exploring policy and regulatory reforms to come under question.
find permanent solutions to the problem. ITA expects
the solution will likely need to include increasing Following the budget declaration, India’s finance
regional competition to drive sector innovation and minister announced that Indian banks would be
reduce overall losses. As seen in other global markets, allowed to raise long-term funds for lending to the
ITA expects new smart grid export opportunities for infrastructure sector through the easing of constraints
37
U.S. firms to increase if sectoral competition also on liquidity, cash reserves and priority lending. This
increases, as DISCOMs seek new innovations to should support additional investment in the grid
capture and/or retain market share. infrastructure needed to move renewable electricity
produced in rural areas to load centers around the
ITA notes this will also spur smart grid investments to country.
effectively integrate the resource, including
technologies to improve load shedding when the sun The Asian Development Bank has announced plans to
goes down. India announced a renewable energy lend $1 billion to Power Grid Corporation for the
deployment target of 175 GW of renewable resources Green Energy Corridor. India further emphasized in its
by 2022. Solar is expected to play the largest role in Intended Nationally Determined Contribution to the
India’s power mix going forward with goals of U.N. climate change negotiations that it will seek low
increasing capacity to 100 GW by 2022. While ITA does cost international financing for climate change
not expect India to meet these targets, the ambitious mitigation efforts from institutions such as the Green
nature of its announcement sends a positive signal to Climate Fund. ITA anticipates that the ability to secure
the market of India’s willingness to use its policy tools project financing will continue to be an important key
to drive development of the generation source. to success for U.S. exporters.

ITA expects India to raise capital to fund new major Policy and Regulatory Environment
infrastructure projects while keeping energy prices
affordable. A balanced budget will remain an ongoing India’s energy policy is overseen by its Ministry of
challenge for India. The July 2014 budget proposed by Power (MOP), and tariffs are regulated by the Central
the Modi administration included a doubling of the tax Electricity Regulatory Commission (CERC) and its state-
on coal, which will fund several important clean level counterparts.
energy subsidies under the umbrella of the National
35
Clean Environment Fund (NCEF). This includes In 2014, MOP initiated the Integrated Power
helping to finance the estimated $6 billion Green Development Scheme to guide the development of
Energy Corridor that will deploy high voltage transmission and distribution systems updates and fill
transmission lines and other infrastructure (e.g., gaps in funding for sub-transmission, distribution and
substations) to facilitate the transfer of electricity metering to support a more efficient grid.

2016 ITA Smart Grid Top Markets Report | 42

Focused on efficient and reliable distribution, MOP Policy efforts related to so-called “smart cities” offer
issued a Smart Grid Vision and Roadmap for India with another mechanism for smart grid policy and
the vision of a nationwide smart grid. In order to regulation development. India’s cities account for
achieve the targets envisioned in the smart grid approximately 60 percent of the country’s gross
roadmap, a National Smart Grid Mission (NSGM) was domestic product (GDP). By 2030, that share is
proposed, which was approved by the government expected to reach 75 percent, and the urban labor
with an outlay of approximately $155 million in the force is expected to increase by nearly 200 million
12th Five Year Plan, including $72 million in allocated workers. The new government has proposed a
funds in 2015. The NSGM serves as an institutional dramatic nationwide program to build 100 smart cities
mechanism for planning, monitoring and with 20 cities annually being selected to receive
implementing policies and programs related to the financing to kick-start development. Additionally, the
smart grid. MOP announced that grants up to 30 Atal Mission for Rejuvenation and Urban
percent of the project cost will be available from the Transformation (AMRUT) was launched with the smart
NSGM budget, and for selected components, such as cities project and is focused on providing basic services,
training and capacity building, and consumer such as electricity, to households in 500 cities.
engagement, grants of 100 percent of costs will be
available.
Market Analysis
The NSGM is also charged with overseeing state-
specific policy efforts, where some regions have India continues to be a difficult market for U.S.
already begun to implement smart grid enabling exporters. However, bolstered by growing electricity
policies on their own. Net metering policies have been consumption, ambitious government policies, and a
adopted in locations such as Andhra Pradesh, growing economy, India saw significant increases to its
Maharashtra and Punjab. Tata Power Delhi has begun Smart Grid Top Markets rankings in 2016.
to bundle other services and institute a series of social Interestingly, despite concerns over the difficulty of
programs that are targeted to finding a business doing business in India, which ranks 130 of 189 by the
38
model that drives customers to pay for power instead World Bank, it had the highest Key Economic and
of stealing it. Energy Sector Investment Indicator value (Category 3).
On the other hand, India’s GTAP score remains one of
Additionally, the National Telecom Machine-to- the lowest among evaluated countries. U.S. firms have
Machine (M2M) Roadmap, a reference document for had some success to date in India through broader
deployment of devices at the intersection of physical partnership efforts, but securing project financing is a
and digital worlds, incorporates efforts related to the primary challenge.
smart grids ICT sub-sector. This is the world’s first
national strategy for the “internet of things” (IoT). It Opportunities and Challenges for U.S. Companies
further highlights the Smart Grid Pilot Program to
prove the application of the IoT that will provide $60 Opportunities
million for 14 pilot projects, each with at least 20,000  Growing electricity demand and an emphasis
customers. Largely the projects are focused on on smart technologies
deploying smart meters and increasing meter readings  U.S. companies are advised to monitor
to address theft issues, support reliability, support multinational development bank postings and
dynamic tariff structures and renewable resources publications for international soft loan and
integration. Four of the projects are underway, and six grant funded project announcements. These
are in the contracting phase. projects offer significant front-end consulting
opportunities and the possibility to supply
These efforts are informed by the India Smart Grid power generation equipment during the
Forum (ISGF), the public-private partnership initiative project implementation phase.
of MOP. ISGF performs research, organizes
conferences, develops standards, performs training Challenges
and provides recommendations to policymakers and  Exporters must engage with a slow, often
regulators. overly bureaucratic, regulatory system that
includes highly regulated electricity prices

2016 ITA Smart Grid Top Markets Report | 43

 and inefficient state-owned distribution prepared to face varied political and economic
companies. conditions across India’s 29 states and seven union
 U.S. firms looking to pursue opportunities in territories.
India are likely to need to bring their own
financing options, thus providing an Summary of Resources
additional layer of difficulty to doing business
in country. • U.S. Department of Commerce India Country
Commercial Guide:
Know Your Buyer http://www.export.gov/ccg/india090814.asp
• Indian Ministry of Power: www.powermin.gov.in
The primary buyers of smart grid technologies in India
are the transmission and distribution companies. An • Indian Ministry of New and Renewable
emerging buyer community, however, is large Energy: www.mnre.gov.in
commercial and industrial energy consumers. Due to • Central Electricity Authority:
rolling brownouts, these consumers are installing their http://www.cea.nic.in/
own distributed energy resources and microgrid
• Indian Renewable Energy Development Agency -
infrastructure to enable off-grid capabilities to
www.ireda.gov.in
maintain their operations.
• India Smart Grid Task Forum:
Central and local government authorities continue to http://indiasmartgrid.org
be active players in securing deals in-country as the • Confederation of Indian Industry:
electricity sector is not completely privatized. Similar http://www.cii.in/
to other large markets, exporters and policy-makers
• Federation of Indian Chambers of Commerce and
are well-served to consider distinct regions or states as
different opportunities. Exporters to India should be Industry: http://www.ficci.com/

2016 ITA Smart Grid Top Markets Report | 44

Japan

Japan ranks third among Top Markets for near-term smart grid export Smart Grid Overall
growth, due in large part to electricity sector reforms, energy efficiency ICT Rank
objectives and active technology procurements by utilities. While U.S. 2
suppliers face difficult competition in Japan, important in-roads have
been made in recent years, and the market is expected to evolve T&D
favorably for innovators and entrants to a strong market. Equipment
23 3

U.S. T&D equipment exports to Japan have increased Japan’s electricity market is dominated by 10 regional
dramatically over the last decade, peaking in 2012 and utilities that have historically controlled generation,
seeing a decline in recent years. This corresponds with transmission, distribution and retail. Compared to
the nation’s efforts to rebuild and strengthen its other mature markets, electricity prices in Japan are
electricity infrastructure following the Tōhoku high and consumption levels are low. Following the
earthquake. A high level of investment is expected to Fukushima disaster and energy crisis, household rates
continue, but it has begun shift to the distribution rose as much as 40 percent in some regions, and rate
network, including smart grid applications and energy hikes are expected to continue, despite the re-
efficiency services. activation of nuclear power, in order to fund
continued upgrades to the system and provide relief
The break-up of vertically-integrated utilities, creation to debt-laden utilities.
of a nationwide grid operator, incentives for
distributed generation and demand response are The drive for efficiency and resiliency over the last
among the major overhauls to Japan’s electricity four years has ultimately forced all utilities to present
market. Sustained reforms will drive the pace and plans for the installation of smart meters to every
scope of new opportunities for U.S. suppliers, and household, nearly 80 million in total. The most recent
strong relationships with Japanese partners will plans set a deadline for 2025 for these installations.
continue to be a requirement in this market. Utilities have already begun the procurement process;
in 2015, Japan thus surpassed China as the largest
39
Market Overview smart meter investor.

The Japanese electricity market has been dramatically Although Japan has begun to re-activate its nuclear
impacted by both the 2011 Tōhoku earthquake and supplies, major reforms of the energy sector have
the policy response that followed. The damage continued, culminating in the April 2014 approval of
resulting from the earthquake and tsunami, including the fourth Basic Energy Plan, which focuses on the
the public concerns over nuclear energy safety, forced policy objectives of energy security, reliability,
Japan to shut down all of its nuclear reactors, which efficiency, affordability, reduced emissions and
accounted for 30 percent of its electricity supplies increased consumer choice. The full implementation
at the time. The Government of Japan also shifted its of this plan, including the break-up of many traditional
focus to demand side management and an increased energy sector monopolies and further liberalization of
emphasis on energy security and resiliency through electricity markets, is expected to result in dramatic
smart grid and energy efficiency technologies. This changes in the technologies and services incorporated
created a spark for technology markets that had long in Japan’s energy infrastructure.
been suppressed and lacked innovation.

2016 ITA Smart Grid Top Markets Report | 45

 Overview of ITA’s Analysis: JAPAN

Strengths
• The Government of Japan is providing strong support for the development of the energy efficiency, smart
grid and microgrids sectors
• Increased amount of renewable resources in Japan’s energy matrix will continue to support the
development of smart grids into the future
Key Trends
• The 2011 Tōhoku earthquake and the continued transition of Japan’s energy supply mix require
electricity management and efficiency solutions
• Electricity sector reforms will incentivize utility investment in smart grids and open various segments of
the electricity services market to entrants
Risks
• Japanese conglomerates and local suppliers already hold strong positions in Japan’s smart grids sector
• Long project timelines and burdensome technical requirements
• Pace and strength of implementation of electricity sector reforms remain to be seen

Policy and Regulatory Environment potential for the future bundling of electricity with
gas, communications or other services.
Japan’s energy market is overseen by the Ministry of
Economy, Trade, and Industry (METI), which is In 2015, METI established two regulatory bodies. The
responsible for policy planning, stable supply of first, the Organization for Cross-Regional Coordination
electricity and rule-making through the Agency for of Transmission Operators (OCCTO), was established
Natural Resources and Energy. The Japan Fair Trade in April 2015 and is charged with overseeing the
Commission monitors the state of competition and construction of cross-regional transmission lines,
has been increasingly active in the electricity market reviewing utility power supply and demand plans, and
since reforms began in the 1990s. By 2011, roughly prescribing utilities to increase power generation and
60% of the electricity market, including sales to large interchange as necessary.
industrial and commercial customers, had been
deregulated. The second, the Electricity Market Surveillance
Committee (EMSC), was established in September
The 2014 Basic Energy Plan represents a complete 2015. METI has delegated the authority to the five
overhaul of Japan’s energy policy, utility industry and EMSC members to monitor the electricity market,
electricity markets. While more nuclear reactors will ensure its neutrality and make recommendations to
come back online over the next few years, natural gas, the Minister.
coal and renewable resources will make up a greater
share of the nation’s energy supply mix in the future. Market Analysis
The plan did not set specific targets but did state that
the share of renewable resources would exceed the In addition to power sector investment in new energy
previous policy objective of 20 percent by 2030. The supply technologies, enhanced T&D infrastructure and
Plan, however, will likely ease emissions restrictions as energy efficiency services, Japan’s government is also
it aims to cut emissions by just 3.8 percent by 2020, a funding the integration of clean energy technologies
lower bar compared to previous policies. and helping drive the development of the market for
smart grid applications. METI’s 2014 budget allocated
Additional reforms called for by the Japanese $3.8 billion for energy improvements, a 29 percent
government include the establishment of a national increase on the previous year, specifically targeting
grid and the liberalization of retail power markets. The energy efficiency and demand-side response.
Basic Energy Plan and related regulatory changes will
effectively break-up the regional utility monopolies in While subsidies targeting energy efficiency grew by 29
Japan, opening up the $67 billion household and small percent in 2014, the key program supporting the roll-
shop retail electricity market to competition in 2016. out of home and building energy management
Japan has awarded over 150 applicants retail licenses. systems has faded out, and the focus of both the
Many of these entities are small firms, but new non- public and private sector in Japan is expected to
electricity entrants have also applied, suggesting strengthen and remain – on smart grid applications

2016 ITA Smart Grid Top Markets Report | 46

that help integrate renewable resources and manage  Meeting grid reliability goals will require
demand, including demand response and microgrids. further investment in outage systems and
microgrids.
In addition to monitoring the electricity system, EMSC
is charged with overseeing the rollout of smart Challenges
meters. Meter deployments ramped-up in 2015, and  The smart grid market remains saturated with
Bloomberg New Energy Finance predicts 6 to 10 major Japanese conglomerates, such as
million installations per year through 2022. As Japan’s Toshiba, Hitachi and Mitsubishi.
utilities deploy AMI, investments in meter data  Projects often have a long approval process,
management and additional smart grid applications spanning two or more years.
and services are anticipated. By the end of 2016,  Japan still employs a burdensome project and
electricity retail deregulation will come into effect, and technology certification process.
most Japanese consumers will have access to live
pricing and the choice to select ToU-based tariffs. If In addition to utility-driven smart grid deployments,
this timeline for technology deployments and market Japan’s Ministry of Environment has a budget of
reforms is met, Japan will be the largest foreign approximately $7 million per year for the next three
market for residential smart grid and energy efficiency years to initiate programs to develop microgrids that
service providers. will improve overall system reliability, enhance
renewable resources and energy storage integration,
Opportunities and Challenges for U.S. Companies and incorporate EVs.

While Japanese conglomerates and traditional local Know Your Buyer

suppliers have been largely successful in winning
smart metering bids thus far, as Japan’s electricity Smart grid procurers in Japan include the established
market reform takes shape and its smart grid 10 utilities, but as market liberalization comes into
develops, additional opportunities for entrants are effect, U.S. firms will potentially find new partners
anticipated beyond the market for hardware. As among the newly awarded market entrants.
Japan’s electricity sector moves to a more customer-
oriented and competitive structure, energy efficiency Summary of Resources
service providers and smart grid innovators with
experience in mature markets, such as North America, • U.S. Department of Commerce Country
will be highly competitive. Commercial Guide:
http://www.export.gov/ccg/japan090820.asp
Opportunities
• Japan Ministry of Economy, Trade, and Industry:
 Integration of renewable resources into
Japan’s grid will require investment in http://www.meti.go.jp/english/
distributed energy management. • Japan External Trade Organization:
 Meeting energy efficiency goals will require https://www.jetro.go.jp/en/
increased consumer engagement and
improved data management.

2016 ITA Smart Grid Top Markets Report | 47

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2016 ITA Smart Grid Top Markets Report | 48

Mexico

Opportunities for U.S. exporters to Mexico are strong given the

Smart Grid Overall
interconnection of the Mexican and U.S. electrical grids along the border,
ICT Rank
longstanding relationship between U. S. and Mexican firms, competitive
advantages created by NAFTA, collaboration at a government level
7
between both countries on energy issues, and the business potential T&D
brought about by a single utility company covering a rapidly-expanding Equipment
customer base of 40 million clients. 1 2

Mexico is the United States’ third largest trading monitoring solutions, such as phasor measurement
partner and second largest export market for U.S. units (PMU) among several other technologies.
products. U.S. T&D equipment exports to Mexico
increased by 47 percent in 2015 with revenues rising to Some recent projects include the installation of
$327 million. This marked one of the few U.S. export 700,000 smart meters in 2015, with a total of 2 million
destination locations for T&D equipment to see year- meters to be deployed during 2016, through an eight-
to-year increases over the last two years. phase distribution loss reduction metering program
and a new energy management system (EMS) to be
Market Overview procured by CENACE. The timeline for this last project
is still under discussion. U.S. smart metering and
Mexico is considered one of the top emerging global communications companies have already been
markets for U.S. smart grid technology exports. awarded several contracts within this set of projects.
Mexico’s 2014 energy reforms have significantly ITA anticipates that international suppliers, including
improved the outlook for the Mexican smart grid U.S. firms, will continue to capitalize on these tenders
market. These reforms are designed to liberalize the for so-called “smart technologies.”
electricity generation market, open future
development to private firms and create competition In August 2015, Mexico announced that it would invest
between energy producers $330 million in the development of smart grids over
Mexico’s state-owned Comisión Federal de the next three years, with expectations that
Electricidad (CFE) previously owned and operated investments in power transmission and distribution
nearly 100 percent of the country’s national electric would surpass $17 billion over the next 15 years.
transmission and distribution grid. The utility will now
be broken into 10 discrete companies. The reform also
created an independent grid operator, CENACE, which The country has forecast as much as $62.5 billion in
controls a new, wholesale market and enables private investment in the energy industry by 2018. This
customers to purchase power directly from producers, includes significant investment in renewable energy
creating an independent power producer market for deployment.
the first time in Mexico.
ITA further assesses that opportunities for smart grid
CFE’s smart grid vision must now also be understood in ICT technologies will increase as its deployment of
view of the changes produced by the energy reform. renewable energy increases. Mexico announced in
This is to assist CFE in its transition from a state September 2015 that it’s first-ever energy auction will
monopoly serving nearly 40 million customers to a award contracts priced in U.S. Dollars, an effort to
productive and competitive company in the new open make the newly opened power industry more
market. CFE has undergone grid modernization efforts attractive to developers
during the last five years through smart metering
pilots, control and automation systems, and grid Policy and Regulatory Environment

2016 ITA Smart Grid Top Markets Report | 49

 Overview of ITA’s Analysis: MEXICO

Strengths
• Ease of cross-border trade
• Existing grid interconnections
Key Trends
• Energy sector reforms opening up new market opportunities
• Increased renewable resources deployment through auctions
Risks
• Insufficient standards and interoperability
• Budget cuts

The Comision Reguladora de Energia (CRE) has the Opportunities and Challenges for U.S. Companies
main regulatory role in the power sector, with the
Energy Secretariat (SENER) taking on the policy role Opportunities
with less guidance from CFE. In June 2015, SENER  The CFE has identified five priority projects in its
released the first-of-its-kind 15-year plan for rollout of the smart grid. Opportunities are
generation, transmission and distribution. This plan available to U.S. firms offering technologies in the
called for additional investments to reduce grid losses, following areas: reduction of technical and non-
modernize the grid, install smart meters and gradually technical losses, enterprise IT and communications
deploy additional smart meter technologies. architecture, strengthening of the billing system,
management of assets, and implementation of
Smart grid implementation is specifically mentioned in GIS.
the Constitutional Energy Reform as a means to reduce  An outline of the CFE’s smart grid roadmap has
power losses, increase quality and reliability, and been made available to government entities and
enable the integration of energy generated from industry stakeholders. It creates short and mid-
intermittent renewable sources. CRE received a grant term opportunities for:
from the U.S. Trade and Development Agency to
develop a smart grid and renewable energy integration • Smart meters and AMI
regulatory roadmap in 2012. The roadmap was • Demand response
published in February 2015. • Energy storage
• Microgrids
Market Analysis • EV pilots
Rising electricity demand and strong investment in • SCADA systems
electric power infrastructure are expected to support • Data management
increased opportunities for electric grid equipment • Cybersecurity
and smart grid exporters to Mexico. International • IT services
investors, including U.S. firms, are expected to bid on • Business Process Management
related projects. • Customer based
solutions
Furthermore, in 2015, the U.S. and Mexican
governments established a new U.S.-Mexico Energy Challenges
Business Council under the auspice of the U.S.-Mexico  Standards are a crucial smart grid topic and one
High Level Economic Dialogue. This council will be that the CFE has not yet addressed. The CFE is
stood up in 2016, and power sector reform will be an currently part of the Smart Grid Interoperability
area of focus, thus strengthening opportunities for U.S. Panel, and numerous efforts are being made by the
exports and enhancing cross-border electricity U.S. Department of Commerce, including the U.S.
coordination, including smart grid development. Commercial Service in Mexico, and U.S. trade
associations, such as the National Electrical
The 2016 Smart Grid Top Markets Report reflected Manufacturers Association (NEMA), to generate
these trends with Mexico jumping in the 2016 rankings increased awareness. The energy regulator, CRE,
to second overall, first in the T&D Equipment sub-
sector, and seventh in the Smart Grid ICT sub-sector.

2016 ITA Smart Grid Top Markets Report | 50

 will also be involved in standards development for open to new technologies and welcomes commercial
the smart grid. presentations, which may lead to invitations or specific
 In particular, small and medium-sized enterprises technology recommendations in tenders.
(SMEs) find it difficult to obtain financing at
reasonable rates despite the Mexican Mexico’s size and diversity are often under-
Government's efforts to increase capital for SMEs. appreciated by U.S. exporters. It can be difficult to find
a single distributor or agent to cover this vast market.
Know Your Buyer A local distributor or partner is recommended to track
tender announcements and complete bids. Foreign
In order to do business in Mexico, it is crucial to companies often form consortiums with Mexican
develop and maintain close relationships with clients vendors to compete in the CFE tenders, benefitting
and partners. Mexicans prefer direct communication, from their partners’ local expertise.
such as telephone calls or face-to-face meetings. U.S.
companies should engage CFE early in order to
promote the inclusion of their products or services in Summary of Resources
the utility’s specifications. This can be a lengthy • U.S. Department of Commerce Mexico Country
process, as can be the tender process. Companies Commercial Guide:
should be patient and make sure they have sufficient http://www.export.gov/ccg/mexico090857.asp
resources to dedicate to these efforts or engage
• Mexico Secretariat of Energy (SENER):
Mexican partners that have experience working with
the CFE. http://www.energia.gob.mx
• Federal Electricity Commission (CFE):
In its new, post-reform role as a productive and http://www.cfe.gob.mx
competitive state company, CFE’s procurement • Energy Regulatory Commission (CRE):
process has been modified to facilitate direct http://www.cre.gob.mx
purchases, less cumbersome tender processes and
partnerships with the private sector, The company is

2016 ITA Smart Grid Top Markets Report | 51

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2016 ITA Smart Grid Top Markets Report | 52

Nigeria

The recent transformation of Nigeria’s power sector, combined with Smart Grid Overall
sustained economic growth and increasing electricity demand, is driving ICT Rank
opportunities for T&D suppliers to Africa’s most populous nation and 30
places Nigeria fourth in the Top Markets T&D Equipment sub-rankings.
Nigeria’s government has thus far been responsive to the need to direct T&D
the proceeds from economic growth towards the overhaul of decrepit Equipment
T&D infrastructure that currently only reaches 50 percent of the 4 21
population.

The country’s newly-privatized distribution companies stoppages at industrial centers and add uncertainty to
are under pressure to modernize their infrastructure the market. The FGN estimates that an additional 26.6
and quickly expand power supplies. Financing these GW of supply will be required to meet electricity
projects will be a challenge, but efforts, such as the demand by 2020.
Power Africa Initiative, have already helped to catalyze
international investment in power and grid Additionally, the Government plans to pool $2.6 billion
modernization projects. Significant opportunities in in institutional funding for near-term investment in
Nigeria’s Smart Grid ICT segment are not anticipated transmission infrastructure; the projected annual
in the near-term, and utility finance and business capital expenditure in the distribution sector is set at
sector risks limit the potential for many U.S. exporters, $370 million. In order to achieve its ambitious goals,
keeping Nigeria’s Top Markets ranking at a modest the FGN will also have to ensure that investors in the
st
21 . newly privatized electricity sector are able to recover
adequate returns and continue to fuel growth.
Market Overview
The structural transformation of Nigeria’s power
Nigeria’s traditionally under-developed power sector sector began in 2004 with the National Integrated
is changing rapidly, in terms of structure as efforts to Power Plan (NIPP), a government-funded initiative to
privatize the industry take shape and in terms of the boost and stabilize electricity supplies, followed by the
levels of investment supporting the development of Electric Power Sector Reform Act (EPSRA) of 2005.
new energy supplies and improvements to EPSRA has thus far led to the unbundling of state-
infrastructure used to meet surging electricity demand owned Power Holding Company of Nigeria (PHCN), a
and support economic growth. Thermal power process that officially ended in late 2013 with the
supplies dominate Nigeria's electricity supply mix is establishment of 15 private successor companies (five
dominated by natural gas, which comprises almost 90 generation firms and 10 distribution utilities). While
percent, Supply disruptions and shortages often result transmission remains government-owned, it is
in power outages in a nation where electricity demand estimated that up to $4 billion in funding will be
growth has averaged 8.5 percent annually over the required to upgrade and expand assets in the newly
last three years. Expanding the power supply, privatized generation and distributions sectors.
modernizing the electricity infrastructure and ensuring
that the energy sector is foundational to the nation’s The privatization of PHCN has spurred optimism for
continued economic growth are top priorities for the growth in Nigeria’s power sector. Investors are hoping
Federal Government of Nigeria (FGN). immediate returns can be reaped from innovations
and efficiencies driven by the successor companies.
Nigeria has the largest economy in Africa, but well- Growth through the transitional phase will depend on
rounded economic growth is hampered by a low access to finance and successful upgrades to ageing
electrification rate (approximately 50 percent of the infrastructure. Thus, a healthy power sector in Nigeria
country), and frequent power outages that cause work

2016 ITA Smart Grid Top Markets Report | 53

 Overview of ITA’s Analysis: NIGERIA

Strengths
• Electricity demand and grid investment growth
• Successful divestment of distribution utilities
• Smart grid working group established as part of Electricity Distribution Services Association (ELDER)
with strong commitment to national deployment
Key Trends
• Continued commitment and investment in smart grid and energy efficiency technologies by the Turkish
Government
• Progress towards further energy sector divestment and electricity market reform
Risks
• Lack of national coordination in smart grid implementation
• Political and economic issues could derail electricity market reform and/or investment

will mean robust opportunities for T&D suppliers and framework for the development of the renewable
service providers in particular. resources sector and for the improvement of the
efficiency of the grid, including through energy
Policy and Regulatory Environment efficiency and demand-side management programs.

The FGN has made the expansion of the power supply Meanwhile, the privatization of generation and
and upgrades to T&D infrastructure policy priorities, distribution has begun to take shape in Nigeria. Since
but the country has many challenges to overcome on 2013, five generation and 10 distribution companies
the regulatory and finance fronts in order to ensure have been privatized, and 10 newly built plants by
necessary strong investment growth in the sector. In Niger Delta Power Holding Company are all privately
2006, the Nigerian Rural Electrification Agency (RER) operated. Contractual obligations in the private
was set up in order to increase rural and peri-urban generation sector are designed to boost capacity by
access to electricity from the estimated level of 35 over 13,000 MW over the next five years. To help
percent to 75 percent by 2020. Beginning in 2010, achieve these goals, the FGN is focused on sustaining a
privatization of the power sector became a focus, and stable investment climate for private sector
recent progress in this effort has led to the allocation participation, expanding T&D networks, maintaining
of approximately $3.5 billion for transmission creditworthy off-takers, establishing cost-reflective
investments and the mobilization of public pension tariffs and reducing inefficiency of networks.
funds to support investments across the power sector.
A major pillar of Nigeria’s efforts to improve the
Amid the electricity sector reforms that began in 2005, transmission network is the government’s $23.7
the Nigerian Electricity Regulatory Commission (NERC) million management contract with Manitoba Hydro
was established as an independent regulator. NERC International Limited (MHI), a Canadian electric utility
monitors and regulates the electricity industry, company. Under MHI’s management, the
including licensing and compliance for market Transmission Company of Nigeria (TCN) is expected to
participants. Over the last few years, NERC has worked effectively and reliably transport power from
to expand gas-fired supplies and issued power generation companies to distribution companies and
generation licenses to 29 independent power eligible customers connected to the national grid. The
producers since 2011. contract also has the goal to establish local capacity in
this area. System collapses and transmission losses
In 2012, NERC implemented a new Multi-Year Tariff have been a frequent issue faced by TCN, and the
Structure (MYTO) intended to increase electricity rates hope is that this arrangement will reduce this issue.
and help attract further investment to the power
sector. The MYTO has gone some ways to correcting Market Analysis
policies that severely underpriced electricity in Nigeria
at a high-cost to the government and to the detriment Thus far, investor interest in Nigeria’s transformed
of investment in the power network. Today, the power sector has been positive, including the U.S.-
agency is focused on establishing a regulatory supported Power Africa Initiative. The initiative,

2016 ITA Smart Grid Top Markets Report | 54

announced by President Barack Obama in 2013, aims  Metering, billing and collection software,
to expand access to power across Sub-Saharan Africa systems, and solutions, including theft
by 2030 through the addition of 60 million new prevention.
electricity connections and 30,000 megawatts of new  Global Information System (GIS) software and
and cleaner power generation. Nigeria has been a platforms, Supervisory Control and Data
country of focus since the inception of the Initiative, Acquisition (SCADA) systems, network
which provides technical assistance, credit monitoring and control systems.
enhancement, financing for independent power  Outage management and emergency
producers and other forms of transaction facilitation response solutions.
to support an additional 14,000 MWs of additional  Smart grid road mapping and strategy
capacity in Nigeria alone. The effort also includes a services.
$100 million investment in Nigeria’s gas and power
transmission infrastructure through the World Bank’s Challenges
Nigeria Electricity and Natural Gas Improvement  The cost of lending is high in Nigeria, and
Project. Through the work of Power Africa, over $1 recently privatized distribution utilities are
billion has also been mobilized for the newly privatized under pressure from local investors to
generation and distribution companies to reduce provide immediate returns.
energy losses, improve operational efficiencies, and  Continued economic growth will be required
expand generation and grid capacity. to fund infrastructure projects in Nigeria’s
energy sector, and the government will have
A May 2014 U.S. Department of Commerce trade to remain committed to increasing electricity
mission to Nigeria, led by Secretary Penny Pritzker tariff rates.
with a focus on energy infrastructure, resulted in a  Nigeria’s government has begun to push for
number of key power sector deals and has helped to more protectionist legislation in recent years.
establish a foothold for U.S. T&D and smart grid Local content requirements and other
companies in Nigeria. The Mission concluded with a protectionist policies could limit
grant signing by the U.S. Trade and Development opportunities to export to Nigeria.
Agency for two power generation projects and an
electricity distribution modernization plan, all of which
have the potential to catalyze nearly half a billion Know Your Buyer
dollars of investment in Nigeria’s energy sector.
Nigerian purchasers of U.S. smart grid goods and
Opportunities and Challenges for U.S. Companies services include generation, transmission and
distribution companies. For example, there are 11
In order to be sustainable, the proceeds from Nigeria’s distribution companies in Nigeria that maintain a
recent economic growth will need to be directed to monopoly status within each of their geographical
grid modernization, and Nigeria’s decision makers areas.
have so far proved responsive to this notion.
Additionally, major consumers of electricity are also Summary of Resources
proving willing to invest in distributed energy sources
to overcome grid inadequacies. While the health of • U.S. Department of Commerce Nigeria Country
the financial sector and the wider economy will be Commercial Guide:
major factors, it appears that the massive demand for http://www.export.gov/ccg/nigeria091342.asp
electricity and upgrades to power infrastructure are
• Power Africa Portal:
currently providing a healthy market for utility
equipment suppliers and service providers. https://www.usaid.gov/powerafrica
• Power Africa Nigeria:
Opportunities https://www.usaid.gov/powerafrica/nigeria
 T&D network upgrades and expansion of
backbone infrastructure.

2016 ITA Smart Grid Top Markets Report | 55

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2016 ITA Smart Grid Top Markets Report | 56

Saudi Arabia

Saudi Arabia ranks fourth overall in the Smart Grid Top Market Report. Smart Grid Overall
U.S. exporters of T&D equipment find increased opportunities in the ICT Rank
Middle East’s largest market. An understanding of Saudi Arabia’s 10
electricity policies starts and ends largely by focusing on trends in global
oil prices. Proven crude oil and natural gas reserves, as well as generous T&D
subsidies, have driven energy demand growth over the last several Equipment
decades. 5 4

Over the last year global oil prices have hit decade while other producers include the Saline Water
lows, creating uncertainty in the electricity market, and Conversion Corporation (SWCC) and Saudi Aramco.
affecting investment, policy, and regulatory decisions. The SWCC operates 32 plants that desalinate water
Opportunities for U.S. smart grid exporters, however, and supply electricity, with total annual output of
remain high in Saudi Arabia, with its ranking largely around 2.5 GW of power.
driven by high T&D equipment exports. ITA expects
that as regional interconnections and renewable Downstream SEC maintains virtual monopoly status to
energy deployment plans move forward, interest in operate the grid and transmit under the subsidiary
implementing smart grid ICT solutions will characterize National Grid, distribute and sell electricity. The SEC
the market. has launched a series of projects to overhaul outdated
segments of the power grid and lay the groundwork
Market Overview for a modern transmission and distribution system.
There are plans to spend nearly $14.7 billion for the
The electricity market in Saudi Arabia has grown transmission of electricity and $13.7 billion for the
rapidly for over 20 years – virtually doubling in size distribution of electric power over the next 10 years.
since 2000 – with expectations that electricity
generation will continue to grow at just over 5 percent SEC has expanded its transmission network by over 50
40
annually over the next few years. An additional percent since 2000. SEC has stated that it expects
generation capacity of 2 to 4 GW needs to come on investments in transmission to reach $80 billion
line each year to meet the country’s growing electricity through 2020. The SEC has focused much of its longer-
41
demand. ITA assesses that Saudi Arabia’s aggressive term investment on interconnecting the Kingdom’s
infrastructure expansion program to increase transmission network both internally, between the
electricity generation, efficient distribution, fuel western, central, and southern provinces, and
diversification, and energy conservation will be internationally.
restrained as oil prices remain low.
The Gulf Cooperation Council Interconnection
That being said, Saudi Arabia remains the biggest Authority’s (GCCIA) Interconnection Project includes
power market in the Gulf Cooperation Council (GCC), three phases that connects Saudi Arabia, Bahrain,
and spending on infrastructure will need to continue. Kuwait and Qatar via overhead and submarine lines in
Opportunities for private sector investment will likely order to help provide improved aggregate demand and
increase as the Saudi Government cannot fund supply over a wider area and meet peak loads in the
infrastructure projects at the rate it once did. summer. The project was funded by a handful of
The electricity market is dominated by one firm, Saudi sources, where SEC provided almost half the total to
Electricity Company (SEC), with Saudi Government connect the GCC states. .
maintaining a majority stake in the firm. The utility
generates almost 75 percent of the country’s power,

2016 ITA Smart Grid Top Markets Report | 57

 Overview of ITA’s Analysis: SAUDI ARABIA

Strengths
• Electricity demand and grid investment growth
• High competiveness for T&D equipment exports

Key Trends
• Building out of regional interconnections
• Support to modernize the grid to integrate new, anticipated renewable energy deployments

Risks
• Political and economic issues could derail electricity market reform and/or investment

The SEC has also carried out a feasibility study to build Energy (KACARE), and the Ministry of Water and
a 3 GW underwater interconnection with Egypt to Electricity.
balance daily and seasonal peak loads. There are plans
to eventually expand the connection to Europe as to ECRA is the independent watchdog and standard setter
better utilize existing generation capacity during non- for the Kingdom’s electricity industry. ECRA assesses
peak operating seasons. tariffs, issues licenses, monitors service providers,
investigates complaints, establishes quality of service
Experts estimate that power losses along the standards and promotes fair competition among
distribution system are approximately 9 percent of providers and suppliers.
total output and will slowly drop over the next decade
42
as grid modernization moves forward. Meanwhile, KACARE drives the integration of clean
energy sources in Saudi Arabia and the development of
SEC plans to accelerate its investments in the smart energy efficiency programs and directives.
grid, including a significant smart meter roll out across
the country. One component of the Kingdom’s smart The Ministry of Water and Electricity (MOWE) is
grid and energy efficiency program was put into place responsible for setting and long-term energy plans and
in 2010 when electricity tariffs for industrial and large policies for the electricity sector. MOWE also oversees
commercial customers were increased and variable private investment in the water and electricity sectors.
tariffs were introduced to encourage conservation
during peak demand hours. ECRA is in the midst of a comprehensive long-term
plan to privatize and deregulate the electricity market,
Tariffs increased again in January 2016 for all users as starting with the structural separation of the vertically-
the decline in oil exports has led the Saudi Government integrated electric supplier monopoly, SEC. ECRA has
to begin reducing subsidies. stated its intent to separate and introduce private
competition to SEC’s generation, transmission and
In order to implement the new tariff system in the distribution networks, where there are expectations
private consumer sector, SEC sees smart meters as a that the market will be reformed to increase
necessary tool for its customers. With a number of competition in distribution and retail sales. Today,
pilot projects completed in Riyadh, SEC is now looking however, competition exists only in the form of
to roll out smart meters to the rest of the country. Independent Water and Power Plants (IWPP) that
Investment in the distribution system in Saudi Arabia, compete with SEC in the generation market and that
including smart grid systems, is predicted to reach $24 are integrated with its grid.
billion over the next decade.
More broadly, the Saudi government has set a number
Policy and Regulatory Environment of goals for the wider energy sector that will likely act
The development of Saudi Arabia’s electricity market is as key drivers for investment in the country’s
overseen by three major government entities: the electricity infrastructure and services; these include:
Electricity and Co-Generation Regulatory Agency • reductions in the amount of crude and natural
(ECRA), King Abdullah City for Atomic and Renewable gas-fired electricity generation;

2016 ITA Smart Grid Top Markets Report | 58

 • establishment and development of nuclear revenues in 2015. This reflects a five-year CAGR of just
power; over 12 percent.
• integration of solar energy supplies for
electricity; As the country’s transmission and distribution
• interconnection of the regional electric grid; infrastructure is modernized, commercial and
• increased reliability and efficiency of industrial scale consumers will also seek to capitalize
electricity transmission and distribution; and on potential energy efficiency gains through
• the achievement of significant energy investments in smart grid and smart building
efficiency gains among residential, technologies and services. The market potential for
commercial, industrial and government residential and industrial energy efficiency products
consumers. and services is projected to grow rapidly as a result,
and a wide range of opportunities for U.S. companies
The Saudi Government has sought to reduce its in the green building and energy efficiency subsectors
dependence on fossil fuels, not out of a need to are expected to open up.
address climate change but so that it can export more
fossil fuels. In 2012, the King Abdullah City for Atomic Opportunities and Challenges for U.S. Companies
and Renewable Energy (KACARE) released Saudi
Arabia’s National Energy Plan, which noted that the SEC has become more open to public-private
Kingdom would meet its 54 GW goal by developing 16 partnerships and private investment in recent years.
GW of solar PV, 25 GW of solar thermal and 9 GW of
new wind power by 2032. Delays in projects and Opportunities
market uncertainty, however, caused the Saudi  Some of the needed smart grid solutions that have
Government to push back this target to 2040 as part of been identified in Saudi Arabia include: system
its INDC submission to the UNFCCC negotiations in late monitoring, outage management, substation
2015, which also included goals to reduce its energy
automation, synchrophasor technology, wide area
intensity between 2005 and 2030 by 30 percent.
network management and distribution
MOWE released a new power sector strategy white automation.
paper for the Kingdom that forecasted its needs and  Working to curb energy demand and preserve
requirements through 2040. The plan focuses heavily domestic fossil fuel resources makes demand
on sustainability, conservation, and planning in order response and other energy efficiency programs
to reduce the energy use, as Saudi Arabia has one of attractive.
the world’s highest levels of energy and electricity  The goal to achieve a reliable and interconnected
intensity. Its consumption per capita is twice as high as transmission network will drive expanded short and
of that Western Europe, and almost double of the medium-term opportunities for high voltage
United States. transmission systems and related equipment.

Since Spring 2015, the tanking of global oil prices has Challenges
led to the government moving forward on  Reduced loss of capital for purchases resulting from
unprecedented cuts to gasoline subsidies, and there a sustained period of low oil prices
are indications the government may sell off some of its
stake in SEC in order to raise capital. According to the Know Your Buyer
IMF, fossil fuel revenues account for 55 percent of the Although American exporters are not required to
Saudi Government budget, so the changing oil prices appoint a local Saudi agent or distributor to sell to
are debilitating the national budget. Saudi companies, ITA strongly recommends that all
new-to-market U.S. companies consider partnering
Market Analysis with a local company for the purposes of monitoring
business opportunities, navigating import and
T&D equipment sales to Saudi Arabia outperform U.S. standards testing regulations, and identifying public
exports in all goods. U.S. T&D equipment exports to sector sales opportunities.
Saudi Arabia peaked in 2012 but, since a drop in 2013,
have continued to grow year-to-year to $79 million in Summary of Resources

2016 ITA Smart Grid Top Markets Report | 59

• U.S. Department of Commerce Saudi Arabia • Saline Water Conversion Corporation:
Country Commercial Guide: www.swcc.gov.sa
http://www.export.gov/ccg/saudiarabia090959.as • Water and Electricity Company (WEC):
p www.wec.com.sa
• Ministry of Water and Electricity: • Power and Water Utility Company for Jubail and
www.mowe.gov.sa Yanbu: www.marafiq.com.sa
• Saudi Electric Company (SEC): www.se.com.sa • Electricity and Cogeneration Regulatory Authority:
www.ecra.gov.sa

2016 ITA Smart Grid Top Markets Report | 60

Turkey

Turkey’s Top Market ranking is bolstered by strong electricity demand

Smart Grid Overall
growth, public and private sector investment in grid modernization, and ICT Rank
steady progress in electricity market reforms. Turkey ranks high among
Top Markets in terms of recent electricity demand growth, and it received
13
high marks in the local Commercial Service assessment of the business T&D
environment for Smart Grid ICT firms. Equipment
11 12

U.S. T&D equipment exports to Turkey have Transmission system operations and maintenance is
continued to grow at a 5 percent CAGR over the last controlled by the Turkish Electricity Transmission
five years peaking in 2015 at over $6 million in Company (TEIAS), a wholly state-owned company.
revenue. This growth has been largely driven by
state divestment of its distribution utilities, which Distribution Grids in Turkey are owned by the
raised $13 billion over three years. government but are operated by the private sector
on the government’s behalf. There are 21 regional
Select utilities in Turkey are investing heavily in electricity distribution utilities that have been
smart grid technologies, and a number of U.S. firms privately owned since 2013.
have already found success in the market. A major
challenge for distribution companies, however, is The Turkish Government privatized all distribution
raising revenue to support new investment, where utilities, and Turkey has 21 Electricity Distribution
tariffs are strictly controlled by the government Service Operators (DSOs). Turkish Energy Regulator,
regulator. As a result, maintaining and upgrading the EMRA, gives importance to the quality of electricity
grid, rather than digitalization, remains the priority. delivered and approves five year investment plans of
DSOs to improve grid infrastructure and introduce
Market Overview smart systems for the purpose of decreasing
technical and non-technical losses and black outs.
The Turkish power sector is a mix of both public and This is particularly relevant to smart grid investment.
private entities. A majority of its electricity Given the U.S. quality of innovative solutions,
generation – approximately 65 percent – is provided deployment of U.S. technologies in Turkey is
by independent power producers (IPPs) and other expected to be a growing trend. Cyber security will
privately owned companies. State-owned Elektrik be one of most important areas for DSOs and the
Uretim AS (EUAS) operates some thermal and large national Turkish Electric Transmission Company,
hydroelectric plants and provides the remaining 35 TEIAS.
percent of the power generation.
Turkey’s strategy for the electricity sector is mainly
Investment is expected to continue to focus on driven by the objectives of increasing energy security
electricity supply growth, particularly indigenous and domestic supplies in order to meet electricity
thermal sources such as coal, nuclear energy, solar, demand growth that is predicted to exceed 5
wind and geothermal power. Non-hydro renewable percent per year over the near and medium-terms.
resources currently account for just over 6 percent
of generation, but Turkey’s Energy Market Grid modernization and distribution efficiency will
Regulatory Authority (EMRA) awarded licenses for also be key objectives as Turkey seeks to capitalize
600 MW of solar power and plans to open up the on the recent divestments and reduce distribution
market for another 3,000 MW. losses. Nationwide, T&D losses are at an average of
17 percent. While a majority of the utilities have
losses less than 10 percent, utilities in eastern and

2016 ITA Smart Grid Top Markets Report | 61

 Overview of ITA’s Analysis: TURKEY

Strengths
• Electricity demand and grid investment growth
• Successful divestment of distribution utilities
• Smart grid working group established as part of Electricity Distribution Services Association (ELDER) with
strong commitment to national deployment

Key Trends
• Continued commitment and investment in smart grid and energy efficiency technologies by the Turkish
government
• Progress toward further energy sector divestment and electricity market reform

Risks
• Lack of national coordination in smart grid implementation

southeastern Turkey have non-technical losses of 60 Turkey is also launching energy efficiency programs
percent. that are being supported by the IFC, World Bank and
the ERBD.
Policy and Regulatory Environment Privatization of state-owned power plants, mainly
gas and coal, has started, and a majority of the major
Beginning in 2011 with the Electricity Market Law, ones completed. EUAS keeps large hydroelectric
Turkey has remained on a steady course to reform power plants and will be the PPP partner for nuclear
the electricity sector and strengthen the role of the power plants to be built.
private sector and market forces. As a candidate for
the European Union – although already in the Top Markets Analysis
European Customs Union – Turkey has liberalized its
electricity market. Electricity is now traded by the Despite the current economic slowdown in Turkey
management of EPIAS on a day-ahead basis. and around the world, electricity demand has
continued its steady growth at 5 percent CAGR and
The Ministry of Energy and Natural Resources is expected to continue growing in the next decade.
(MENR) is responsible for Turkey’s overarching As a result, Turkey will need to double its power
energy policy. The 2015 to 2019 Strategic Plan set generation capacity by 2023. ITA expects that smart
important policy objectives for the sector, including grid and energy efficiency technologies will likely be
a goal of having 30 percent renewable resources by important solutions to the country’s electricity
2023, which includes hydropower. Feed-in tariffs infrastructure challenges.
have been in place in Turkey since 2011 and were
reformed in order to improve the incentives for The demand for smart grid technologies among
renewable resources. Turkey’s tariffs, however, utilities in Turkey is driven largely by the need to
remain low in comparison to many European decrease electricity distribution losses, increase
nations. power quality and reliability, and solve problems
encountered in forecasting and balancing markets.
Established in 2007, The Energy Efficiency Co-
ordination Board (EECB) is responsible for preparing Smart grid and smart meter deployment is
national energy efficiency strategies, plans and developing in Turkey. As such, growth in the Smart
programs; monitoring implementation; and Grid ICT Sub-Sector is expected and bolsters Turkey’s
th
assessing effectiveness. The EECB has sought to align ranking to 13 for the sub-sector.
Turkey’s energy efficiency policies with those of the
European Union’s and has set legally-binding goals Opportunities and Challenges for U.S. Companies:
to reduce energy intensity by 15 percent by 2020,
with a focus on energy-intensive sectors, such as Turkey is hoping to achieve investments of over $5
manufacturing, transport and power generation. billion a year in the electricity sector through 2020 to
support its primary goals of increasing capacity,
extending and upgrading grids, increasing network

2016 ITA Smart Grid Top Markets Report | 62

efficiency, and integrating and managing new supply The smart-grid sector in Turkey often faces some of
sources. Turkish utilities are expected to invest $9.3 the following challenges:
billion in grid upgrades and other smart grid  Limited budget allowed by EMRA
investments during the next five years.  Lack of standards
 Ownership of meters belongs to customers
Additional prospects are services and products in the
thus limiting the activities of distribution
following areas:
 Automated meter reading systems companies
 Renewable resources integration and
Know Your Buyer
monitoring systems Turkish purchasers of U.S. smart grid goods and
 Demand management and reactive power services include generation, transmission and
control systems distribution companies.
 Utility IT and communication system
upgrades Summary of Resources

Although European suppliers have a major presence • U.S. Department of Commerce Turkey Country
in Turkey’s electricity sector, U.S. smart grid firms Commercial Guide:
have proved highly competitive in the early stages of http://www.export.gov/ccg/turkey090909.asp
market development. The U.S. Commercial Service, • Turkish Energy Market Regulatory Authority
in cooperation with U.S. Trade and Development (EMRA): http://www.emra.org.tr/
Agency, is extremely active in supporting smart grid
exporters in Turkey, including technical and
regulatory workshops, feasibility studies and pilot
projects.

2016 ITA Smart Grid Top Markets Report | 63

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2016 ITA Smart Grid Top Markets Report | 64

United Kingdom

The United Kingdom has quickly developed into one of the most Smart Grid Overall
attractive markets in the world for advanced smart grid technology and ICT Rank
applications. Thanks to a highly competitive electricity sector and recent 3
efforts by the government and regulators, the U.K. market offers
immense opportunities for innovators in the smart grid ICT segment and T&D
is one of the top nations in the world for U.S. firms to do business. Equipment
20 6

The British Government’s commitment to a and Wales, SP Transmission in the South of Scotland,
nationwide smart meter roll-out by 2020 is a key and Scottish Hydro-electric transmission in the North
driver for its Smart Grid ICT Top Markets ranking of of Scotland.
third. Additionally, the regulatory framework in the
U.K. is well developed to fund smart grid deployments, The U.K. is becoming increasingly concerned over
and a highly competitive market for retail electricity energy security, as existing generation capacity
and consumer energy efficiency services exists. With depletes, electricity imports rise, and energy sector
the implementation of electricity market reforms investments slow amid political and regulatory
underway, there is now the potential for the U.K. to uncertainty. The U.K. Government is faced with the
develop a robust market for demand response and challenge of facilitating investment in the electricity
further opportunities for smart grid solutions at the sector and achieving carbon reduction goals, all the
distribution and consumer levels. while containing the rising consumer electricity prices
that have become a hot-button political issue. ITA
Market Overview assesses that, as is the case with other European
countries, interconnections will play an increasingly
Since the mid-80s, the U.K. has been a global trend- more significant role in the near-term.
setter when it comes to competition and innovation in
electricity markets. For the better part of two decades, The U.K. Energy Bill, including the Electricity Market
competition drove down electricity prices and helped Reform (EMR) bill, passed into law in December 2013
to ensure robust energy supplies. Prices, however, and represents the government’s flagship response to
have been on the rise for the last ten years. electricity sector challenges. Britain’s electricity
Government pressure on industry to contain costs and market now enters a transitional phase with the
improve consumer services has culminated in the potential for major commercial opportunities for
launch of a review of the domestic energy market by energy efficiency, smart grid, and various electricity
the U.K. regulator, with results being delayed but service providers.
expected to be released in mid-2016.
Policy and Regulatory Environment
The U.K. electricity sector is dominated by the “Big
Six” energy companies – E.ON, RWE npower, Centrica, After more than a year of compromises and revisions
Scottish and Southern Energy, Scottish Power, and EDF from its first reading in November 2012, the U.K.
Energy – that generate two thirds of the energy and Energy Bill was signed into law in August 2014 and
control 95 percent of the retail market. Electricity followed by a series of legislative changes focused on
prices in the U.K. are solely market-based and remain improving the implementation. The key objectives
below those of EU peers , such as Germany and Spain, affecting the electricity sector include:
after taxes. Transmission is unbundled in the U.K., • Implementation of EMR to attract GBP 110
where maintenance, ownership and operations of the billion investment in generation and grid
high voltage system falls to National Grid in England upgrades by 2020;

2016 ITA Smart Grid Top Markets Report | 65

 Overview of ITA’s Analysis: UNITED KINGDOM

Strengths
• Existing regulatory framework facilitates strong funding and returns for smart grid
• Government roadmap in place, and commitment and support remain strong
• U.S. exporters have already proved highly competitive in U.K. electricity sector
Key Trends
• Smart meter procurements have begun, and major roll-out to begin in 2016.
• Electricity market reforms could drive demand response and energy efficiency opportunities
Risks
• Politics continue to threaten policy and investment in broader energy sector
• Potential under-achievement of capacity markets and renewable resources development.
• Consumer smart grid adoption and energy efficiency programs could under-perform

• Safety and security regulations for the New provisions for capacity markets in the U.K. are
nuclear sector to be implemented by the intended to facilitate the development of demand
Office for Nuclear Regulation; response programs and may stimulate increased
• Consumer protections, including limits on investment in interconnections as regional neighbors
energy tariffs, improved transparency of with excess capacity seek to bid into the U.K. system.
electricity bills, and expansion of third-party
consumer electricity services; and The government’s push for improved billing and
• Increased coordination and strategic energy efficiency services to consumers should open
alignment between the electricity regulator, doors for various solutions providers.
the Office of Gas and Electricity Markets
(Ofgem), and the U.K. Government, including In September 2013, DECC established through
the Department of Energy & Climate Change contract the smart metering Data Communications
(DECC). Company (DCC), an independent entity, which will be
responsible for linking all smart electricity and gas
Existing regulations in the U.K. already provide healthy meters in homes and small businesses with the
support for the smart grid and energy efficiency systems of energy suppliers, network operators and
markets, compared to other European nations. The energy service companies. The DCC is expected to be
DECC has set a deployment goal for smart meters at up and running in 2016. The government has created
more than 50 million devices (30 million for electric), the Central Delivery Body, which contracts with media
with regulated roll-out from 2016moving toward 80 companies, consultants and electricity sector experts
percent of homes having a smart meter by 2020. to support the “brand identity” of the smart metering
program and ensure consumer engagement during
Ofgem regulations enable utilities to include smart smart grid roll-out and operations.
meters, renewable integration, and consumer energy
efficiency program costs in electric bills. Ofgem’s new DECC and Ofgem created the public-private Smart Grid
performance-based RIIO framework (Revenue = Forum to develop a roadmap and vision for the
Incentives + Innovation + Outputs) will involve setting nation’s smart grid. The U.K. smart grid program is the
eight-year price controls, offering incentives to most well-publicized and transparent project of its
encourage the growth of smart grids. kind in any market. A wealth of information is
available through DECC’s Website, and the annual
Taken at face value, the objectives of the Energy Bill reports on the Smart Metering Implementation
should help drive further opportunities for these Programme are highly informative.
technologies and services. For example, the
government has stated its intent to nearly triple the In March 2016 the National Infrastructure Commission
funding available for low-carbon sources of power, but has published its report on balancing energy demand
during 2015, the outlook for additional deployment of and supply. The key finding was that the U.K. smart
onshore wind and solar has diminished as subsidies power system should be achieved through three
43
were cut and regulatory uncertainty increases. innovations: interconnection, storage and demand

2016 ITA Smart Grid Top Markets Report | 66

flexibility. The recommendations of the reports have DECC’s Community Energy Strategy, which foresees an
been accepted within the HMG 2016 Budget. additional 1 million homes with distributed energy by
2020, could be a driver of future opportunities for
Top Markets Analysis microgrid equipment and services.

The recent follow-through on government There are also a number of risk factors that could limit
commitments to deploy smart grid technologies in the the great potential of the U.K. smart grid market and
U.K. supports the market’s ranking for near-term U.S. exporter opportunities. Implementation of the
smart grid ICT export opportunities. Energy Bill has already been highly politicized, and
electricity market reforms could under-achieve as a
U.S. manufacturers have already garnered success in result. Additionally, many stakeholders – including
the United Kingdom. In October 2012, U.S. consumer groups – are skeptical of the value of smart
Commercial Service representatives held a Smart Grid grid technologies and have raised privacy and cyber
Trade Mission in the U.K. that resulted in over $40 security concerns. The need to solve these issues in
million in export success for U.S. companies. the United Kingdom may, in fact, create more
opportunities for smart grid firms, but U.S. exporters
U.S. T&D equipment exports to the United Kingdom will face top vendors from across Europe in one of the
have grown at a 15 percent CAGR over the last five world’s most promising and competitive electricity
years to $66 million in revenues in 2015. This makes it services markets.
the fourth biggest global market for U.S.
manufacturers in the sector. Know Your Buyer

Opportunities and Challenges for U.S. Companies United Kingdom purchasers of U.S. smart grid goods
and services include generation, transmission, and
Despite a delay to the national smart meter roll-out distribution companies. This includes transmission
and lingering uncertainties over the implementation of networks operators such as National Grid, Scottish
the EMR, the U.K. smart grid market continues to Power Transmission, Scottish Hydro Electric
develop and provide opportunities for U.S. exporters. Transmission and Northern Ireland Electricity, as well
The U.K. DECC’s assessment of future challenges to as distribution networks operators such as Electricity
the electricity market cites the near-term need for North West, Northern Ireland Electricity, Northern
“balancing technologies”, including: PowerGrid, SP Energy Networks, SSE Power
• demand-side response (DSR) platforms and Distribution, U.K. Power Networks and Western Power
programs; Distribution.
• electricity storage systems;
• network interconnections for increased Summary of Resources
access to bulk supplies across international • U.S. Department of Commerce United Kingdom
borders and distributed generation at the Country Commercial Guide:
local level; http://www.export.gov/ccg/unitedkingdom09096
• distribution automation technologies; and 3.asp
• consumer engagement and energy efficiency
• U.K. Department of Energy and Climate Change:
programs to support the development of DSR
and achieve customer-oriented objectives of https://www.gov.uk/government/organisations/d
the Energy Bill. epartment-of-energy-climate-change
• U.K. Office of Gas and Electricity Markets:
It is also important to note that meeting electricity https://www.ofgem.gov.uk/
supply challenges in the U.K. will likely create • Data Communications Company:
opportunities for vendors in the more traditional T&D
https://www.smartdcc.co.uk/
equipment segments as well. Ofgem estimates that
the U.K. will need approximately $200 billion of
investment in new infrastructure, such as new
transformers and cabling, by 2020. Additionally,

2016 ITA Smart Grid Top Markets Report | 67

This Page Intentionally Left Blank

2016 ITA Smart Grid Top Markets Report | 68

Addendum: Resources for U.S. Exporters
The U.S. Government has numerous resources available to help U.S. exporters: from additional market
research, to guides to export financing, to overseas trade missions, to staff around the country and the
world. A few key resources are highlighted below. For additional information about services from the
International Trade Administration (ITA), please visit www.export.gov.

Renewable Energy & Energy Efficiency (RE&EE) small and medium-sized enterprises, learn the basics of
Exporter Portal trade finance so that they can turn their export
http://export.gov/reee/ opportunities into actual sales and achieve the ultimate
This online portal provides a one-stop shop for RE&EE goal of getting paid on time for those sales. Concise,
exporters – including T&D equipment, smart grid ICT, two-page chapters offer the basics of numerous
and energy storage – to connect to news, events, and financing techniques, from open accounts to forfaiting
market intelligence resources from U.S. Government and government assisted foreign-buyer financing.
agencies under the National Export Initiative. RE&EE
exporters can also sign up to receive a quarterly e- Trade Missions http://www.export.gov/trademissions/
newsletter. Additionally, the portal includes the latest Department of Commerce trade missions are overseas
information from the Department of Commerce’s programs for U.S. firms that wish to explore and pursue
Renewable Energy and Energy Efficiency Advisory export opportunities by meeting directly with potential
Committee, a Federal Advisory committee that advises clients in local markets. Trade missions include, among
the Secretary regarding the development and other activities, one-on-one meetings with foreign
administration of programs and policies to expand the industry executives and government officials that are
competitiveness of U.S. exports of RE&EE goods and pre-screened to match specific business objectives.
services.
Certified Trade Fairs
Country Commercial Guides http://www.export.gov/eac/show_short_trade_events.
http://export.gov/ccg/ asp?CountryName=null&StateName=null&IndustryNam
Written by U.S. Embassy trade experts worldwide, the e=null&TypeName=International%20Trade%20Fair&Sta
Country Commercial Guides provide an excellent rtDate=null&EndDate=null
starting point for what you need to know about The Department of Commerce's trade fair certification
exporting and doing business in a foreign market. The program endorses overseas trade shows that are
reports include sections addressing: market overview, reliable venues and good markets for U.S. firms to sell
challenges, opportunities, and entry strategies; political their products and services abroad. These shows serve
environment; selling U.S. products and services; trade as vital access vehicles for U.S. firms to enter and
regulations, customs, and standards; and much more. expand into foreign markets. The certified show/U.S.
pavilion ensures a high-quality, multi-faceted
Basic Guide to Exporting opportunity for American companies to successfully
http://export.gov/basicguide/ market overseas. Among other benefits, certified trade
A Basic Guide to Exporting addresses virtually every fairs provide U.S. exhibitors with help facilitating
issue a company looking to export might face. contacts, market information, counseling and other
Numerous sections, charts, lists and definitions services to enhance their marketing efforts.
throughout the book’s 19 chapters provide in-depth
information and solid advice about the key activities Upcoming certified trade fairs include:
and issues relevant to any prospective exporter. • Power-GEN Asia; Seoul, Korea
September 20-22, 2016
Trade Finance Guide: A Quick Reference for U.S. • European Utility Week; Barcelona, Spain
Exporters November 15-17, 2016
http://www.export.gov/tradefinanceguide/index.asp
Trade Finance Guide: A Quick Reference for U.S. International Buyer Program
Exporters is designed to help U.S. companies, especially http://export.gov/ibp/

2016 ITA Smart Grid Top Markets Report | 69

The International Buyer Program (IBP) brings thousands behalf of their commercial interest, typically in a
of international buyers to the United States for competitive bid contest.
business-to-business matchmaking with U.S. firms
exhibiting at major industry trade shows. Every year, Global Energy Team
the International Buyer Program results in millions of http://www.export.gov/industry/energy/index.asp
dollars in new business for U.S. companies by bringing The Global Energy Team is a network of global energy
pre-screened international buyers, representatives and specialists that draws on experiences across the U.S.
distributors to selected shows. U.S. country and Commercial Service, Foreign Commercial Services, and
industry experts are on site at IBP shows to provide Department of Commerce headquartered industry
hands-on export counseling, market analysis, and analysts. The team provides on upcoming events, trade
matchmaking services. Each IBP show also has an leads, and market research.
International Business Center where U.S. companies
can meet privately with prospective international U.S. Commercial Service
buyers, prospective sales representatives, and business http://www.export.gov/usoffices/index.asp
partners and obtain assistance from experienced ITA With offices throughout the United States and in U.S.
staff. Embassies and consulates in nearly 80 countries, the
U.S. Commercial Service utilizes its global network of
The Advocacy Center trade professionals to connect U.S. companies with
http://www.export.gov/advocacy/ international buyers worldwide. Whether looking to
The Advocacy Center coordinates U.S. government make their first export sale or expand to additional
interagency advocacy efforts on behalf of U.S. international markets, companies will find the expertise
exporters that are bidding on public-sector contracts they need to tap into lucrative opportunities and
with overseas governments and government agencies. increase their bottom line. This includes trade
The Advocacy Center helps to ensure that sales of U.S. counseling, actionable market intelligence, business
products and services have the best possible chance matchmaking, and commercial diplomacy.
competing abroad. Advocacy assistance is wide and
varied but often involves companies that want the U.S.
Government to communicate a message to foreign
governments or government-owned corporations on

2016 ITA Smart Grid Top Markets Report | 70

Appendix A: Methodology
Score Categories and Weighting

The Smart Grid Top Markets methodology integrates data and information on global markets and trade,
including the critical contributions of commercial specialists from U.S. Foreign Commercial Service posts
in every nation ranked in the report. The resulting data and analyses are combined using a weighted
scorecard methodology to produce relative rankings of the 34 subject markets – an expansion of two
additional markets, Israel and New Zealand, from the 2015 Smart Grid Top Markets Report.

Each scorecard is based on quantitative and qualitative analysis that integrates data and information on
key smart grid export market drivers, based on four category scores:
1. Smart Grid Market Growth Potential Score
2. Trade Factors and U.S. Competiveness Score
3. Key Economic and Energy Sector Investment Indicators Score
4. Strength of Domestic Industry Score

Weighing of categories 1 and 2 varied for the three reported sector and sub-sector rankings. No
modifications to the weighing were made in the 2016 report. The weighing was as follows:

OVERALL RANKING
1. Smart Grid Market Growth Potential Score: 40%
2. Trade Factors and U.S. Competiveness Score: 30%
3. Key Economic and Energy Sector Investment Indicators Score: 20%
4. Strength of Domestic Industry Score: 10%

T&D EQUIPMENT SUB-SECTOR RANKING

1. Smart Grid Market Growth Potential Score: 0%
2. Trade Factors and U.S. Competiveness Score: 70%
3. Key Economic and Energy Sector Investment Indicators Score: 20%
4. Strength of Domestic Industry Score: 10%

SMART GRID ICT SUB-SECTOR RANKING

1. Smart Grid Market Growth Potential Score: 70%
2. Trade Factors and U.S. Competiveness Score: 0%
3. Key Economic and Energy Sector Investment Indicators Score: 20%
4. Strength of Domestic Industry Score: 10%

The following sections provide in-depth detail and reference data for each of the above components to
the scorecard.

1. Smart Grid Market Growth Potential Score

The development of the smart grid in a given market is dependent on a range of factors that can be
impacted by policy, regulatory, investment, electricity industry, consumer, and/or wider economic and
business environment. In order to quantify the potential for export growth in a given market, ITA
developed a scoring system to quantify market potential across smart grid market drivers and factors
impacting the U.S. smart grid industry competitiveness in a given market. This component of the Top
Markets analysis focuses on the market potential for exporters of Integrated ICT and Services in particular
and includes the critical contributions of smart grid commercial specialists from the Foreign Commercial
Service Post in every nation ranked in the report. No modifications to the criteria were made for the 2016
Smart Grid Top Markets Report.

2016 ITA Smart Grid Top Markets Report | 71

Figure A1: Summary of ITA Smart Grid Market Development Country Score Criteria

Driver
Criteria Example of Driver
[Share of Score]
Smart Grid Road Maps, published cost
Has the government developed benefit analysis, and government
ambitious smart grid deployment leadership to coordinate standards and
Government targets and a strategic plan to interoperability are examples of
Commitment achieve them? government objectives and strategic
[10%] Is the government likely to follow- planning.
through on this plan and achieve A country's record at meeting deployment
these targets? or spending objectives is an example of
evidence for follow-through.
Carbon reduction, renewable integration,
Are the country's policy and market
Energy Policy and increased energy efficiency are
objectives for the wider energy
Drivers examples of wider energy sector policy
sector helping to drive deployment of
[10%] objectives that would help drive the
the smart grid?
deployment of the smart grid.

Do regulations in the electricity

Regulatory frameworks that enable
Regulatory sector incentivize or directly support
demand response, de-coupled markets,
Drivers smart grid investment or
or energy efficiency programs would be
[10%] development by utilities or other
supportive of the smart grid.
stakeholders?
Grid Investment Are utilities and other smart grid Market data and other factors, including
and Electricity stakeholders investing in the the finance environment for utilities,
Market Activity modernization of the grid and smart provide a measure of grid investment in a
[10%] grid solutions? given market.
The adoption of energy storage, electric
Additional Smart vehicles, and various green building
Are there other factors either
Grid Drivers or technologies are examples of other
supporting or hampering smart grid
Barriers drivers. Resistance to smart grid by
development in the market?
[10%] consumers or other stakeholders is an
example of a barrier.
Smart Grid
Does local competition or other
Business
business environment factors impact Inter-agency experience working with the
Environment
the export potential of U.S. smart country on smart grid issues is
and U.S.
grid products and services in the considered in this component.
Competitiveness
market?
[10%]
Local Based on U.S. & Foreign
Assessment of Commercial Service specialists’
Smart Grid assessment of market maturity The survey also provides an on-the-
Market and (10%), government and regulator ground analysis of various policies and
Commercial efforts (10%), public awareness drivers that is included in all other
Potential for (10%), and U.S company interest assessment categories above.
U.S. Exporters and export success (10%) in the
[40%] subject smart grid market.

2016 ITA Smart Grid Top Markets Report | 72

2. Trade Factors & U.S. Competiveness Score

The Smart Grid Top Markets Report seeks to quantify the discrete opportunity for U.S. manufacturers of
T&D equipment. In order to estimate U.S. export growth potential to a given market, this category score
incorporates existing trade data, along with an analysis of additional market factors that will impact growth
potential.

In the 2015 Smart Grid Top Market Report, T&D equipment exports were forecasted based on a linear
regression trend line fitting 2009 through 2013 actual trade data. The 2015 forecasted data from the 2015
Smart Grid Top Markets Report for U.S. global exports was overestimated by approximately 10 percent,
while individual country predictions for each of the studied countries reflected overestimations of data as
large as 54 percent. Although the forecast overestimated U.S. exports as frequently as it did
underestimate exports, the percentage deviation in the underestimations was significantly larger in more
cases, as highlighted by a 4,500 percent underestimation for Spain (or $3.6 million in export revenues).
Other underestimations larger than 100 percent of the total revenues included Denmark and Sweden. As
a result, ITA modified the methodology for this category scoring for the 2016 Smart Grid Top Market
Report.

In the 2016 Smart Grid Top Market Report, the methodology for the Trade Factors and U.S.
Competiveness category was modified from the 2015 Report to an equal weighting among the following
three normalized values: total absolute export value from the previous year (2015), recent absolute
growth in total U.S. exports (2013-2015), and BMI’s projected electricity consumption annual growth
percentage (2015-2020).

Figure A2: Top U.S. Export Destinations (2015), T&D Equipment Revenues ($ Millions)
PARTNER 2011 2012 2013 2014 2015 2005-2015, CAGR
WORLD $1,962.59 $2,264.20 $2,293.09 $2,058.91 $1,984.73 9.14%
Canada $614.64 $748.36 $690.99 $639.20 $556.44 9.70%
Mexico $206.87 $196.10 $217.72 $221.65 $326.97 9.65%
Saudi Arabia $47.17 $89.09 $73.50 $79.34 $78.71 14.87%
United Kingdom $39.26 $45.61 $60.05 $73.43 $66.20 11.95%
Korea $45.70 $68.91 $48.76 $59.88 $65.73 12.72%
Venezuela $68.72 $49.48 $47.63 $53.41 $57.58 18.56%
Norway $8.76 $17.42 $26.80 $38.45 $57.24 35.01%
China $83.06 $73.65 $78.07 $66.19 $53.99 5.85%
Brazil $34.48 $45.62 $94.83 $47.92 $40.83 14.67%
Japan $68.16 $86.85 $73.88 $38.29 $38.42 7.58%
Singapore $32.93 $35.90 $65.02 $38.14 $38.21 16.58%
Colombia $44.12 $52.05 $50.06 $44.20 $32.11 10.42%
Ecuador $51.79 $45.28 $63.92 $50.35 $31.82 25.58%
Germany $18.40 $24.79 $26.67 $31.47 $27.48 8.16%
UAE $18.82 $26.12 $39.92 $27.70 $25.89 17.30%
Australia $33.57 $36.82 $34.03 $25.01 $24.94 4.72%
Philippines $19.76 $18.50 $19.47 $28.07 $23.30 6.85%
Hong Kong $31.83 $27.73 $28.14 $21.98 $18.54 -0.08%
Peru $18.93 $17.49 $14.66 $20.31 $18.24 23.10%
Dominican Rep. $20.26 $18.44 $7.43 $10.71 $17.32 9.82%

2016 ITA Smart Grid Top Markets Report | 73

 The resulting category score and ranking is a relative measure of a market’s potential for absolute near-
term growth in U.S. exports of T&D equipment.

Figure A2 provides historical data on the top 20 U.S. export destinations for T&D equipment
manufacturers in 2015, including total exports (“World”). ITA’s data trend analysis informs about near-
term project exports and the development of relativized country rankings and scores based on these
projections.

Figure A3 demonstrates the link between a market’s total T&D equipment import revenue size (x-axis),
the percentage of total imports met by U.S. suppliers (y-axis), and the value of the U.S. imports (size of
bubble). Values are estimated from U.N. data from 2014.

Figure A3: Percentage of T&D Equipment Import Market Met By U.S. Suppliers, 2014

2016 ITA Smart Grid Top Markets Report | 74

 Figure A4: Top 15 U.S. Export Destinations, 2015

Percent of
Percent U.S. Total
of U.S. T&D
Total U.S. T&D Equipment Equipment
All U.S. Exports Exports Exports Exports
1 Canada 18.6% Canada 28.0%
2 Mexico 15.7% Mexico 16.5%
3 China 7.7% Saudi Arabia 4.0%
4 Japan 4.2% United Kingdom 3.3%
5 United Kingdom 3.7% Korea 3.3%
6 Germany 3.3% Venezuela 2.9%
7 Korea 2.9% Norway 2.9%
8 Netherlands 2.7% China 2.7%
9 Hong Kong 2.5% Brazil 2.1%
10 Belgium 2.3% Japan 1.9%
11 Brazil 2.1% Singapore 1.9%
12 France 2.0% Colombia 1.6%
13 Singapore 1.9% Ecuador 1.6%
14 Taiwan 1.7% Germany 1.4%
15 Australia 1.7% United Arab Emirates 1.3%

The trade data trend analysis is supplemented by an Electricity Consumption Trend score drawing on
Business Monitor International (BMI) electricity consumption predictions. This score quantifies potential
growth in T&D infrastructure investment driven by a nation’s recent electricity consumption trends, while
taking into account various market factors, including national policy, finance, and other economic factors,
that could potentially drive or hamper the build-out of T&D infrastructure.

3. Key Economic and Energy Sector Investment Indicators Score

In order to incorporate broader economic and investment data that could impact the growth of smart grid
markets, this top markets report utilizes Business Monitor International’s (BMI) Power Risk/Reward Rating
of major international electricity markets. According to its stated methodology and illustrated in Figure A4,
BMI’s score “considers a thorough and all-encompassing range of factors that affect the investment
climate in the electricity sector.” Because smart grid development and deployment depends on these
wider factors – including the health of the electricity sector, the overall investment climate and even the
national economy – BMI’s score is a valuable addition to ITA’s analysis. Scores were accessed on
December 21, 2015.

It is worth noting that in 2016, a handful of countries saw significant decreases in their power sector
risk/reward index by BMI. Brazil (-14%), Russia (-12 %) and China (-11%) all dropped in ratings by more
than 10 percent. On the other hand, Portugal (8%), India (7%), the Philippines (6%), the Netherlands
(6%) and Spain (6%) experienced the largest positive net increases. Overall, 19 countries experienced
decreases in ratings, five experienced no change and eight experienced increases in overall rating. New
Zealand's rating was available for the first time.

2016 ITA Smart Grid Top Markets Report | 75

 Figure A5: BMI Power Risk/Reward Ratings Methodology

Weighting Of Indicators
Component Weighting, %
Rewards 65
Industry Rewards 40, of which
Electricity capacity, MW, 5-year average 10
Electricity generation, GWh, 5-year average 5
Electricity generation, % 8
Electricity consumption, GWh 5
Electricity consumption, % 8
Access to electricity, % of population 4
Country Rewards 25, of which
Real GDP growth, %, 5-year average 5
GDP per capita, %, 5-year average 5
Population, % change 5
Imported raw material dependence 3.5
Electricity import dependence 3.5
Inflation, 5-year average 3
Risks 35
Industry Risks 20, of which
Liberalisation level 4
Financing 6
Renewables outlook 6
Transparency of tendering process 4
Country Risks 15, of which
Short-term political stability 4
Policy continuity 2
External risk 3
Institutions 3
Corruption 3

4. Strength of Domestic Industry Score

The fourth component of the Smart Grid Top Markets analysis integrates data on the share of the market
for electricity sector technologies that will be met by imports. This score is based on the analysis
produced by Purdue University’s Global Trade Analysis Project (GTAP), which estimates the share of
commodities that various industries procure from foreign vs. domestic markets. GTAP’s “import share”
analysis includes an estimate of the electronic equipment and machinery that the electricity sector in a
given market procures for its operations. While this category includes a range of equipment purchased in
the electricity sector, it does provide a useful proxy – at a national level – of utility reliance on imports to
meet its technology needs.

The Import Potential Score supplements ITA’s trade data analysis and provides a proxy data point for the
potential demand in a market’s electric utility sector for a range of technologies, including some smart grid
technologies. The Import Potential Score positively impacts Top Markets scores for countries that are
more likely to import growing and evolving smart grid technologies.

GTAP data is updated on a five year cycle and was, therefore, not updated for the 2016 Smart Grid Top
Market Report publication relative to 2015's.

2016 ITA Smart Grid Top Markets Report | 76

Appendix B: Year-to-year Report Ranking Comparison

Figure B1: Smart Grid Top Market Report Rankings Comparison, 2015-2016
Overall

Ranking 2015 2016 Change

1 Canada Canada ---
2 Japan Mexico +9
3 Saudi Arabia Japan -1
4 Australia Saudi Arabia -1
5 U.K. Australia -1
6 Singapore U.K. -1
7 China China ---
8 Chile India +13
9 Philippines Vietnam +1
10 Vietnam France +3
11 Mexico Chile -3
12 Turkey Turkey ---
13 France Korea +4
14 Malaysia Malaysia ---
15 Netherlands Spain +16
16 Germany Netherlands -1
17 Korea Philippines -8
18 Austria Germany -2
19 Brazil New Zealand New in 2016
20 Colombia Singapore -14
21 India Nigeria +1
22 Nigeria Austria -4
23 Denmark Israel New in 2016
24 Sweden Denmark -1
25 Indonesia Sweden -1
26 Thailand Indonesia -1
27 Portugal Italy +3
28 Poland Thailand -2
29 South Africa South Africa ---
30 Italy Colombia -10
31 Spain Poland -3
32 Russia Brazil -13
33 Israel (unranked) Portugal -6
34 New Zealand (unranked) Russia -2

2016 ITA Smart Grid Top Markets Report | 77

Figure B2: Smart Grid Top Market Report Rankings Comparison, 2015-2016
T&D Subs-Sector

Ranking 2015 2016 Change

1 Saudi Arabia Mexico +11
2 Canada Vietnam +5
3 Colombia India +15
4 China Nigeria +4
5 Singapore Saudi Arabia -4
6 Chile Malaysia +3
7 Vietnam Chile -1
8 Nigeria Indonesia +3
9 Malaysia Canada -7
10 Japan Philippines +5
11 Indonesia Turkey +2
12 Mexico Korea +5
13 Turkey China -9
14 Australia Singapore -9
15 Philippines Australia -1
16 Brazil Colombia -13
17 Korea Thailand +2
18 India Israel New in 2016
19 Thailand Poland +4
20 Germany U.K. +5
21 Netherlands Netherlands ---
22 Austria Spain +10
23 Poland Japan -13
24 Sweden France +2
25 U.K. Austria -3
26 France Germany -6
27 South Africa South Africa ---
28 Denmark Denmark ---
29 Portugal Portugal ---
30 Italy Sweden -6
31 Russia Italy -1
32 Spain New Zealand New in 2016
33 Israel (unranked) Brazil -17
34 New Zealand (unranked) Russia -3

2016 ITA Smart Grid Top Markets Report | 78

Figure B3: Smart Grid Top Market Report Rankings Comparison, 2015-2016,
Smart Grid ICT Sub-Sector

Ranking 2015 2016 Change

1 Canada Canada ---
2 U.K. Japan +1
3 Japan U.K. -1
4 France Australia +1
5 Australia France -1
6 Saudi Arabia China +11
7 Philippines Mexico +4
8 Netherlands New Zealand New in 2016
9 Denmark Spain +17
10 Turkey Saudi Arabia -4
11 Mexico Netherlands -3
12 Germany Germany ---
13 Austria Turkey -3
14 Singapore Korea +5
15 Chile India +6
16 Sweden Sweden ---
17 China Denmark -8
18 Vietnam Chile -3
19 Korea Austria -6
20 Malaysia Italy +8
21 India Malaysia -1
22 Brazil Vietnam -4
23 Portugal Singapore -9
24 South Africa Philippines -17
25 Nigeria Israel New in 2016
26 Spain Brazil -4
27 Poland South Africa -3
28 Italy Thailand +2
29 Colombia Poland -2
30 Thailand Nigeria -5
31 Russia Colombia -2
32 Indonesia Indonesia ---
33 Israel (unranked) Portugal -10
34 New Zealand (unranked) Russia -3

2016 ITA Smart Grid Top Markets Report | 79

Appendix C: Citations
1
U.S. Census Trade Data via the Trade Policy Information System of the U.S. Department of Commerce:
International Trade Administration.
2
United Nations, World Economic Situation and Prospects, 2016.
3
International Energy Agency (IEA), World Energy Outlook, 2015.
4
Bloomberg New Energy Finance, Q1 2016 Energy Smart Technologies Market Outlook, 25 February 2016.
5
GTM Research, “Global Smart Grid Technologies and Growth Markets”, 25 July, 2013. Available at:
http://www.greentechmedia.com/research/report/global-smart-grid-technologies-and-growth-markets-2013-2020
6
Navigant, Smart Grid Technologies Report, http://www.navigantresearch.com/research/smart-grid-technologies
7
Transparent Market Research, “Smart Grid Market - Global Industry Analysis, Size, Share, Growth, Trends and
Forecast 2013 – 2019,” November 2015
8
American Recovery and Reinvestment Act of 2009 investment data and reports available at
https://www.smartgrid.gov/recovery_act
9
Quadrennial Energy Review Report: Energy Transmission, Storage, and Distribution Infrastructure, April 2015.
http://energy.gov/sites/prod/files/2015/07/f24/QER%20Full%20Report_TS%26D%20April%202015_0.pdf
10
Bloomberg New Energy Finance , Q1 2014 Energy Smart Technologies Market Outlook, 24 January, 2014.
11
International Energy Agency (IEA), World Energy Outlook, 2015.
12
Bloomberg New Energy Finance, Theme: Changing Utility Business Models, 7 January 2016
13
United Nations Trade Data via the Trade Policy Information System of the U.S. Department of Commerce:
International Trade Administration
14
World Bank, GMR 2013: Rural-Urban Dynamics and the Millennium Development, 2013
15
United Nations Statistical Office, based on the Harmonized Tariff System (HTS) for the classification of trade
commodities via the Trade Policy Information System of the U.S. Department of Commerce: International Trade
Administration.
16
International Energy Agency (IEA), World Energy Outlook, 2015.
17
U.S. Census Trade Data via the Trade Policy Information System of the U.S. Department of Commerce:
International Trade Administration.
18
U.S. Department of Energy, http://www.energy.gov/articles/how-microgrids-work
19
Bloomberg New Energy Finance, Q1 2016 Digital Energy Market Outlook, 25 February 2016
20
Transparency Market Research, Smart Grid data Analytics Market - Global Industry Analysis, Size, Share, Growth,
Trends and Forecast 2015 – 2022, 30 November 2015
21
Bloomberg New Energy Finance, Q1 2016 Digital Energy Market Outlook, 25 February 2016
22
U.S. Department of Energy, http://energy.gov/oe/technology-development/smart-grid/demand-response
23
Navigant Research, Virtual Power Plants Q2 2014, https://www.navigantresearch.com/research/virtual-power-
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24
Definitions are taken from following unless otherwise stated: Sandia Report SAND2013-5131 -- DOE/EPRI 2013
Electricity Storage Handbook in Collaboration with NRECA; Energy Storage Association.
25
Definitions are taken from following: International Energy Agency (2014), Energy Storage Technology Map Report;
Energy Storage Association.
26
Bloomberg New Energy Finance. Global Energy Storage Market Outlook, 2015.
27
Smart Grid Today, Kepco regulation reaches 56 MW with 2 new Kokam systems, 7 March 2016
28
Business Monitor International, Electricity Consumption Projections.
29
Bloomberg New Energy Finance, Q1 2016 Digital Energy Market Outlook, 25 February 2016.
30
Bloomberg New Energy Finance, Q1 2016 Digital Energy Market Outlook, 25 February 2016.
31
The Climate Group, China’s Fast Track to Renewable Energy, April 2015
32
Bloomberg New Energy Finance, Q1 2016 Digital Energy Market Outlook, 25 February 2016
33
Ernst & Young, Renewable energy country attractiveness indices, Issue 35, November 2012, pp. 29.
34
Massachusetts Institute of Technology, http://www.technologyreview.com/featuredstory/542091/indias-energy-
crisis/
35
Bloomberg New Energy Finance, H2 2014 India Market Outlook, 8 August 2014
36
Government of India, India’s Intended National Determined Contribution, October 2015
(http://www4.unfccc.int/submissions/INDC/Published%20Documents/India/1/INDIA%20INDC%20TO%20UNFCCC.pd
f)
37
Bloomberg New Energy Finance, H2 2014 India Market Outlook, 8 August 2014

2016 ITA Smart Grid Top Markets Report | 80

38
World Bank, Doing Business Rankings, http://www.doingbusiness.org/rankings
39
Bloomberg New Energy Finance, Q1 2016 Digital Energy Market Outlook, 25 February 2016.
40
Business Monitor International, Industry Forecast – Saudi Arabia Power Forecast Scenario, 25 September 2015
41
Business Monitor International, Industry Forecast – Saudi Arabia Power Forecast Scenario, 25 September 2015
42
Business Monitor International, Industry Forecast – Saudi Arabia Power Forecast Scenario, 25 September 2015
43
Business Monitor International, Industry Forecast – United Kingdom Power Forecast Scenario, 25 February 2016

2016 ITA Smart Grid Top Markets Report | 81

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