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Smart Grid Investment Grows with Widespread Smart Meter Installations
Global investment in smart grids increased by $700 million from $14.2 billion in 2012 to $14.9 billion in 2013, and for the first time China outspent the United States.1 A smart grid is a technology that improves the operation and reliability of electricity transmission and distribution systems by sending digital information in real time. The technology includes smart meters, which record energy use in short time increments and have two-way communication between the utility and its customers, and distribution automation, which allows remote monitoring and control of distribution systems to automatically fix faults and provide other adjustments.
China and the United States accounted for more than half of the global spending on smart grids in 2013. China invested $4.3 billion, most of which went into its smart meter program, while the United States invested $3.6 billion—33 percent less than in 2012.2 (See Figure 1.) In the rest of the world, smart grid investment was modest in comparison, with growing investment expected in the near future in European and Asian markets.3 While investment growth in smart grid technologies slowed somewhat in 2013 after very rapid increases in the past five years, growing levels of renewable energy integration and interest in higher grid reliability will continue to drive smart grid growth globally through 2020.4 In fact, the global smart grid market is expected to cumulatively reach over $400 billion by 2020.5
By the end of 2013, China was on track to have 250 million smart meters installed, an 80 percent increase in just one year.6 According to a 2010 census, there are 402 million households in China, so smart meters currently cover approximately 62 percent of households.7 (See Figure 2.) China’s metering program initially had the goal of installing smart meters in 95 percent of households by 2015, but the end date has been pushed back to 2017.8 (See Figure 3.) While this may slightly slow down smart meter investment in China over the next few years, investment in other smart grid technologies, such as distribution automation, is expected to continue growing there.9
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