Brochure-Emerging Markets Smart Grid-Outlook … Markets...northeast group, llc...

northeast group, llc

Emerging Markets Smart Grid: Outlook 2015 BRICS Central & Eastern Europe Eurasia Latin America Middle East & North Africa Southeast Asia Sub-‐Saharan Africa

December 2014 | www.northeast-‐group.com

© 2014 Northeast Group, LLC

Emerging Markets Smart Grid: Outlook 2015

Northeast Group’s Emerging Markets Smart Grid:

Outlook 2015 is the fourth edition of its annual

emerging markets smart grid overview. This study

looks ahead over the next decade to project where

smart grid investment will occur in developing

countries. To-‐date, most smart grid investment has

been concentrated in developed countries. This mainly

includes countries in North America, Western Europe,

and East Asia. These markets represent more than

88% of the current installed base of smart meters and

many of the pioneering distribution automation, analytics, home energy

management, and other smart grid initiatives. But many countries in the rest of

the developing world are positioning themselves to quickly catch up. The 50

countries in this study have all begun to explore smart grid deployments, and in

many cases have advanced regulatory frameworks and extensive pilot projects in

place. With GDP growth rates more than double those in the developed world

(5.2% per year from 2014 – 2018) these 50 countries will have the funds available

to undertake significant grid modernizations.

Emerging market countries can reap immediate benefits from smart grid

investment. Many of these countries suffer from rampant non-‐technical losses –

mostly due to electricity theft – that cost in aggregate $58.7 billion dollars each

year in lost or unbilled revenue. Furthermore, all of the countries in this study face high rates of electricity demand

growth, straining existing infrastructure, and worsening already unreliable electric grids.

The results of this study show that more than one-‐third of the countries are already ready for significant

investment in smart grid infrastructure. This means that they not only have well-‐developed regulatory

frameworks, but also have the underlying market conditions (through high distribution loss rates, high electricity

prices, and enough high-‐income residents) to justify smart meter deployments. Other smart grid initiatives will

follow smart metering, with distribution automation the

second largest overall segment ($49bn from 2014 to 2024). In

addition to regulatory frameworks and distribution loss rates,

further key criteria for assessing smart grid potential include

existing industry structures, current electricity prices (and

whether or not they are subsidized), financing mechanisms, the

potential for operational benefits, and other efficiencies. Of the

50 countries, almost all of the Central & Eastern European

(CEE) countries studied meet these criteria, while some

countries in Latin America, Middle East & North Africa, and

Southeast Asia do as well. Meanwhile, the other countries in

this study show the potential to progress quickly over the

0

1

2

3

4

5

6

7

8

9

10

0 1 2 3 4 5 6 7 8 9 10

Emerging markets smart meter potential

Regulatory framework Activity imminent, but some risk involved

Strong potential; awaiting government action

Not yet ready, but will progress throughout decade

Pote

ntia

l ben

efits

Ready for investment

0"1,000"2,000"3,000"4,000"5,000"

Dominican"Republic"

Colom

bia"

Ecuador"

Paraguay"Peru"

Mexico"

Brazil"

ArgenBna"

Uruguay"

Venezuela"

Chile"

Industry)structure)

Dominican(Republic(

Further)detail)"

AMI"•  EdeNorte"working"with"Mexican"vendor"Eneri"to"

develop"AMI"project"aimed"at"loss"reducBon""Grid)applica5ons)•  Currently"have"SCADA"at"approximately"half"of"

substaBons"•  Working"with"USTDA"to"develop"SCADA/EMS,"PMUs,"

and"earlySstage"CVR/VVO"to"improve"reliability"and"reduce"frequency"stabilizaBon"costs"

Home)energy)management/distributed)genera5on)•  Strong"solar"potenBal,"currently"working"on"a"number"

of"solar"leasing"schemes"which"could"sBmulate"the"market"for"distributed"generaBon"

PopulaBon:"10,602,000"GDP/capita"at"PPP""(2014):"$10,323"GDP"growth"(Avg."2014S2018):"4.13%"

Regulatory)framework)

Smart"meter"target"

1!No"explicit"smart"meter"goal,"but"government"backing"smart"grid"generally"

Pilot"projects" 2! Eneri"has"small"deployments,"gridSlevel"automaBon"advancing"

Funding/financial"incenBves"

2 $78"M"loan"from"IDB;"USTDA"funding"for"grid"projects"

Technical"standards"

2! Will"work"with"US"NIST"

Deployment"plan"

0! No"concrete"AMI"deployment"plan"toSdate"

Major"infrastructure"investment"

2!FDI"expected"to"increase"due"to"strong"government"efforts"to"improve"state"infrastructure"

CO2"target" 4! Will"reduce"its"carbon"emissions"25%"from"2012"levels"by"2030"

Distributed"generaBon"incenBves"

2!Net"metering"for"solar"PV"and"reduced"import"duBes"for"RE"equipment"

EV"incenBves" 0! No"incenBves,"limited"EV"introducBon"

Outreach"program"

0! Outreach"has"been"limited"toSdate"

The$%reduc*on%

Opera*onal%benefits% Financing%mechanisms%

Electricity"consumpBon/capita"Electricity"prices"

Percentage"distribuBon"losses"

Moderate"UBliBes"use"manual"meter"readers,"but"labor"costs"are"low.""

External"funding"already"in"place"from"IDB,"USTDA,"and"WB;"IDB"loaning"$78"M"for"distribuBon"loss"reducBon"

GeneraBon""Transmission""DistribuBon"

Government"has"majority"stakes"in"some"uBliBes"in"all"segments;"all"market"segments"are"separated"

Leading)distribu5on)u5li5es)

UBlity" Customers"Sales"(GWh)"

EdeNorte" 744,000" 3,550"

EdeSur" 601,000" 4,270"

EdeEste" 693,000" 3,740"

Smart)grid)business)case)indicators)

H)

M)

L)

northeast group, llc""Emerging(Markets(Smart(Grid:(Outlook(2015(

"""""""""="50Scountry""""""""""weighted"average"

Emerging(Markets(Smart(Grid:(Outlook(2015(|(Latin(America"

Total"meters:"2,020,325"ResidenBal"meters:1,860,719"

Smart"meters"(2014):"26,664"2024"split:"PLC:"19%;"RF:"74%;"Cell.:"7%""

Cents/kW

h"(m

ost"recen

t)"

%"Techn

ical"and

"non

Stechn

ical"

losses"(m

ost"recen

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135(

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10"

0" 2" 4" 6" 8" 10"

Colombia"ArgenBna"

Peru"

Chile"

Brazil"

Mexico"Paraguay"

Venezuela"

Dominican"Republic"

Uruguay"

Poten&

al)benefits)

Regulatory)Framework)

Ecuador"

0%"

10%"

20%"

30%"

Peru"

Chile"

Uruguay"

Colom

bia"

ArgenBna"

Brazil"

Ecuador"

Mexico"

Venezuela"

Dominican"

Paraguay"

Percentage"distribuBon"losses"

Cents/kW

h"(m

ost"recen

t)"

Sources:"EIA,"IMF,"EdeNorte,"EdeSur,"EdeEste"

0"5"

10"15"20"25"30"

Venezuela"

ArgenBna"

Paraguay"

Ecuador"

Mexico"

Colom

bia"

Brazil"Peru"

Dominican"Republic"Chile"

Uruguay"

kWh/pe

rson

"(2014)"

©(2014(Northeast(Group,(LLC(

Demand:side%benefits%

Market share of leading vendors in Southeast Asia

Source: Northeast Group *Note: This is a forward looking market share and includes both installed bases of AMI meters as well as announced contracts.


course of the coming decade.

Additionally, regional organizations and regional leaders will

help drive progress across these emerging markets. The EU,

ASEAN, and GCC have all been critical in facilitating smart

grid cooperation, while countries such as Brazil, Singapore,

and the United Arab Emirates already serve as regional

leaders. As smart grid deployments are likely to show distinct

characteristics in emerging markets that differ from existing

deployments in developed countries, these regional leaders

will be critical in developing models that can be used by

countries with similar drivers and barriers.

Perhaps most significantly, 20 of the 50 countries in this

study have some form of smart meter target. In the cases of

CEE countries like Estonia, this is already leading to large-‐

scale deployments and full smart meter penetration can be

expected in the near term. In other countries, the targets

serve as guides or only mandate deployments to high-‐

consumption residents. In all cases though, these targets are

pushing regulators to adopt complimentary regulations that

will drive the smart grid market. Additionally, smart meter

pilots have already begun in many of the other countries

where there are not yet targets. As a result, the overall smart

meter penetration rate for the 50 countries in this study is

expected to reach 43% by 2024.

Northeast Group forecasts a global average of $240 per endpoint for RF-‐based smart meter deployments and

$190 per endpoint for PLC-‐based deployments. This includes the cost of meter hardware, communications, IT

(such as meter data management systems and customer information systems), professional services, and

installation costs. Using these cost estimates, the total AMI market across the 50 emerging market countries in

this study is forecast to reach $89 billion between 2014 and 2024. Viewed through this lens, the aggregate smart

meter potential of these 50 countries begins to look very significant. As smart metering is deployed, distribution

automation and other smart grid segments will follow suit.

Key questions answered in this study:

• What are the key themes for the global smart grid market in 2015?

• What smart grid activity took place in emerging markets in 2014 and what is expected for 2015? • What is the forecast market for AMI, distribution automation, wide area measurement, home energy

management, and IT in each emerging market region through 2024? • How do emerging markets compare to developed countries in forecast deployments?

$24 $9

$117 $119 $13 $69 $4,061

$128 $160 $467 $339 $298 $3 $175 $150 $57 $41 $344 $904 $264 $1,101 $162 $147 $5,116 $85 $281 $99 $1,163 $364 $213 $274 $671 $639 $319 $33

$148 $788 $55

$3,680 $10,482

$256 $3,995

$293 $591

$486 $16,184

$49 $759

$307 $1,934

0% 5% 10% 15% 20% 25% 30% 35% 40%

% T&D losses

Distribution losses by % and dollars lost

Source: Northeast Group; EIA

Total annual losses in $M

$58.7 billion total annual losses across 50 emerging market countries

-6

-4

-2

0

2

4

6

8

10

12

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Absolute increase (cents/kWh) % increase

Average electricity price increase: 17.1%

Average residential electricity price changes in emerging markets from 2013 - 2014

Ave

rage

pri

nce

chan

ge fr

om 2

013

– 20

14

in U

S ce

nts/

kWh

Percent change from 2013 – 2014

Source: Northeast Group Note: Does not include 10 countries which did not change prices


• Which countries were most active in developing smart grid-‐related policies and which countries took a step back?

• Who are the leading international vendors in emerging markets? What is their market share in emerging markets? Who are the most important local vendors?

• Which emerging markets countries have the most developed smart grid regulatory frameworks?

• Which of these 50 countries have the potential to reap the most direct benefits from smart meter deployments?

Table of Contents

i. Executive Summary 1

ii. Themes for 2015 7

ii.i Theme 1: Distribution losses are driving smart grid investments 7

ii.ii Theme 2: Rising electricity prices 8

ii.iii Theme 3: Vendors looking beyond legacy metering in emerging markets 10

iii. Methodology 12

1. Introduction 17

2. Global overview 25

2.1 Smart meter potential in emerging markets 25

2.2 Developments in 2014 31

2.3 Business case drivers 37

2.4 Regulatory drivers 40

3. Emerging markets smart grid market forecast 47

3.1 Forecast summary 47

3.2 Deployment assumptions 49

3.3 Cost assumptions 52

2014

20

15

2016

20

17

2018

20

19

2020

20

21

2022

20

23

2024

Sub-Saharan Africa Southeast Asia South Asia MENA Latin America Eurasia China CEE

Emerging markets smart grid forecast by region


Table of Contents (cont.)

3.4 Comparison to developed countries 52

4. Vendor activity 54

4.1 Leading meter hardware vendors 54

4.2 Leading communications-‐only vendors 61

4.3 Local and other metering vendors 63

4.4 Leading distribution automation vendors 63

5. Regional and country summaries 70

6. BRICS 73

6.1 China 77

6.2 India 79

7. Central & Eastern Europe 81

7.1 Bulgaria 85

7.2 Croatia 87

7.3 Czech Republic 89

7.4 Estonia 91

7.5 Hungary 93

7.6 Latvia 95

7.7 Lithuania 97

7.8 Poland 99

7.9 Romania 101

7.10 Slovakia 103

7.11 Slovenia 105

7.12 Turkey 107

8. Eurasia 109

8.1 Kazakhstan 113



8.2 Kyrgyzstan 115

8.3 Russia 117

8.4 Ukraine 119

8.5 Uzbekistan 121

9. Latin America 123

9.1 Argentina 127

9.2 Brazil 129

9.3 Chile 131

9.4 Colombia 133

9.5 Dominican Republic 135

9.6 Ecuador 137

9.7 Mexico 139

9.8 Paraguay 141

9.9 Peru 143

9.10 Uruguay 145

9.11 Venezuela 147

10. Middle East & North Africa 149

10.1 Bahrain 153

10.2 Egypt 155

10.3 Israel 157

10.4 Jordan 159

10.5 Kuwait 161

10.6 Lebanon 163

10.7 Oman 165

10.8 Qatar 167



10.9 Saudi Arabia 169

10.10 United Arab Emirates 171

11. Southeast Asia 173

11.1 Indonesia 177

11.2 Malaysia 179

11.3 Philippines 181

11.4 Singapore 183

11.5 Sri Lanka 185

11.6 Thailand 187

11.7 Vietnam 189

12. Sub-‐Saharan Africa 191

12.1 Ghana 195

12.2 Nigeria 197

12.3 South Africa 199

13. Appendix 201

13.1 List of abbreviations and acronyms 201

13.2 List of companies mentioned in this report 204

List of Figures, Boxes, and Tables

Emerging markets smart grid: key takeaways 5

Emerging markets smart meter potential 6

Smart grid activity in countries with highest total losses 8

Countries with highest T&D losses measured by annual dollars lost 8

Average electricity price changes in emerging markets from 2013 – 2014 9

Importance of tariff increases on smart grid investment 9

Vendors moving away from legacy metering in emerging markets 10


List of Figures, Boxes, and Tables (cont.)

Annual legacy and AMI meter shipments across 50 emerging market countries 11

Northeast Group smart grid forecasting model 15

Figure 1.1: Smart grid value chain 17

Figure 1.2: Smart grid model highlighting focus in emerging markets 18

Figure 2.1: Global smart grid activity 25

Figure 2.2: Smart grid regulatory country index 26

Figure 2.3: Smart grid potential benefit country index 27

Figure 2.4: Emerging markets smart meter potential 28

Figure 2.5: Emerging markets added to this report 32

Table 2.1: Biggest shifts in regulatory framework score 33

Table 2.2: Biggest shifts in potential benefit score 33

Figure 2.6: Biggest positive movers in smart meter potential 34

Figure 2.7: Biggest negative movers in smart meter potential 34

Figure 2.8: Largest installed base of AMI meters 35

Figure 2.9: Notable smart meter activity in 2014 36

Figure 2.10: Average electricity prices by region 37

Figure 2.11: Annual GDP growth (2014 – 2018) 37

Figure 2.12: Global distribution losses 37

Figure 2.13: Per-‐capita electricity consumption 37

Figure 2.14: Distribution losses by % and dollars lost 38

Figure 2.15: Annual electricity demand growth 39

Figure 2.16: Typical number of outages per month (SAIFI) 40

Figure 2.17: Typical duration of outages per month (SAIDI) 40

Figure 2.18: Smart meter targets in emerging markets 41

Table 2.3: Smart meter funding mechanisms 42

Table 2.4: Outside smart grid funding bodies 43

Table 2.5: Smart meter interoperability standards in Europe 43

Figure 2.19: Smart grid regulatory and deployment plans in Philippines 44

Table 2.6: Electricity network spending in emerging markets (2011 – 2020) 44

Figure 2.20: CO2 emissions targets in emerging markets 45

Figure 2.21: Renewable energy incentives in emerging markets 45



Table 2.7: Types of electric vehicle incentives 46

Figure 3.1: Emerging markets smart grid forecast by region 48

Table 3.1: Emerging markets smart grid forecast by region 49

Figure 3.2: Regional electricity meter market sizes in 2014 49

Figure 3.3: Regional electricity meter market sizes in 2024 50

Figure 3.4: Smart meter deployments in emerging markets by communications 50

Table 3.2: Emerging markets smart grid forecast by segment 51

Figure 3.5: Emerging markets smart grid forecast by segment 51

Table 3.3: Emerging markets distribution automation forecast 52

Figure 3.6: Emerging markets distribution automation forecast 52

Figure 3.7: Global AMI forecast comparison 53

Figure 3.8: Global smart grid forecast comparison 53

Figure 4.1: Market share of leading vendors in 49 emerging markets 55

Table 4.1: Leading international smart meter hardware vendors 56

Table 4.2: Leading Chinese meter vendors 60

Table 4.3: Leading communications-‐only vendors 61

Table 4.4: Additional hardware vendors active in emerging market smart meter projects 63

Figure 4.2: Market share of leading vendors in BRICS 66

Figure 4.3: Market share of leading vendors in Central & Eastern Europe 67

Figure 4.4: Market share of leading vendors in Eurasia 67

Figure 4.5: Market share of leading vendors in Latin America 68

Figure 4.6: Market share of leading vendors in Middle East/North Africa 68

Figure 4.7: Market share of leading vendors in Southeast Asia 69

Figure 4.8: Market share of leading vendors in Sub-‐Saharan Africa 69

Figure 6.1: Smart meter potential in BRICS 73





Figure 6.6: Market share of leading vendors in BRICS 75

Figure 7.1: Smart meter potential in Central & Eastern Europe 81







Figure 7.6: Market share of leading vendors in Central & Eastern Europe 83

Figure 8.1: Smart meter potential in Eurasia 109





Figure 8.6: Market share of leading vendors in Eurasia 111

Figure 9. 1: Smart meter potential in Latin America 123





Figure 9.6: Market share of leading vendors in Latin America 125

Figure 10.1: Smart meter potential in Middle East & North Africa 149





Figure 10.6: Market share of leading vendors in Middle East & North Africa 151

Figure 11.1: Smart meter potential in Southeast Asia 173





Figure 11.6: Market share of leading vendors in Southeast Asia 175

Figure 12.1: Smart meter potential in Sub-‐Saharan Africa 191







Figure 12.6: Market share of leading vendors in Sub-‐Saharan Africa 193

In addition to the figures and tables shown above, each country summary includes the following:

Table: Industry structure; Table: Regulatory framework; Chart: Regional smart meter potential; Chart: Regional electricity consumption per capita (kWh); Chart: Regional electricity prices (cents per kWh); Chart: Regional distribution losses (%).

Therefore, this study includes an additional 128 unique charts and tables in addition to those cited above.

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