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
Emerging Markets Smart Grid: Outlook 2015
Northeast Group’s Emerging Markets Smart Grid: 9 8 7
smart grid investment will occur in developing
6
countries. To-‐date, most smart grid investment has
5 4 3 2
and East Asia. These markets represent more than
1
88% of the current installed base of smart meters and
Not yet ready, but will progress throughout decade
0
1
2
Activity imminent, but some risk involved
Regulatory framework
0 3
4
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
5
Paraguay"
kWh/person"(2014)"
"R ep Co ublic lo " m Ec bia" ua Pa do ra r" gu ay Pe " M ru" ex ico" Ar Braz ge il" nB Uru na Ve gu " ne ay" zu el a" Ch ile "
5,000" 4,000" 3,000" 2,000" 1,000" 0"
2"
2!
Eneri"has"small"deployments,"gridS level"automaBon"advancing"
2
$78"M"loan"from"IDB;"USTDA" funding"for"grid"projects"
Uru gu ay " Co lo m b Arg ia" en Bn a" Bra zil " Ec ua do r" M ex ico Ve " ne zu Do ela" m in ica n" Pa ra gu ay "
0%"
"
Outreach" program"
2! Will"work"with"US"NIST" No"concrete"AMI"deployment"plan" toSdate" FDI"expected"to"increase"due"to" 2! strong"government"efforts"to" improve"state"infrastructure" Will"reduce"its"carbon"emissions" 4! 25%"from"2012"levels"by"2030" Net"metering"for"solar"PV"and" 2! reduced"import"duBes"for"RE" equipment" No"incenBves,"limited"EV" 0! introducBon" 0!
0! Outreach"has"been"limited"toSdate"
"
10%"
L)
10"
Further)detail)
30%"
H)
8"
Pilot"projects"
EV"incenBves"
20%"
M)
6"
No"explicit"smart"meter"goal,"but" 1! government"backing"smart"grid" generally"
Distributed" generaBon" incenBves"
ile "
%"Technical"and"nonStechnical" losses"(most"recent)"
30" 25" 20" 15" 10" 5" 0"
Opera*onal%benefits%
4"
Smart"meter" target"
Sales" (GWh)"
Percentage"distribuBon"losses"
UBliBes"use"manual" meter"readers,"but" labor"costs"are"low.""
Mexico" Chile" Colombia"
Regulatory)framework)
The$%reduc*on%
Moderate"
ArgenBna"
Peru" Regulatory)Framework)
Funding/ financial" incenBves" EdeNorte" 744,000" 3,550" Technical" EdeSur" 601,000" 4,270" standards" EdeEste" 693,000" 3,740" Deployment" plan" Smart)grid)business)case)indicators) Major" """""""""="50Scountry""""""""""infrastructure" Demand:side%benefits% weighted"average" investment" Electricity"consumpBon/capita" CO2"target" Electricity"prices" Customers"
Brazil"
Ecuador"
0"
Leading)distribu5on)u5li5es) UBlity"
Uruguay"
Venezuela"
0"
2024"split:"PLC:"19%;"RF:"74%;"Cell.:"7%""
m in
mostly due to electricity theft – that cost in aggregate $58.7 billion dollars each
6"
2"
Smart"meters"(2014):"26,664"
Do
investment. Many of these countries suffer from rampant non-‐technical losses –
8"
4"
Total"meters:"2,020,325" ResidenBal"meters:1,860,719"
Government"has"majority" stakes"in"some"uBliBes"in"all" segments;"all"market"segments" are"separated"
10
Dominican"Republic"
10"
Industry)structure) GeneraBon" " Transmission" " DistribuBon"
Pe ru
Emerging market countries can reap immediate benefits from smart grid
9
northeast group, llc""
PopulaBon:"10,602,000" GDP/capita"at"PPP""(2014):"$10,323" GDP"growth"(Avg."2014S2018):"4.13%"
ican
to undertake significant grid modernizations.
8
Dominican(Republic(
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
7
Emerging(Markets(Smart(Grid:(Outlook(2015(
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
6
Poten&al)benefits)
includes countries in North America, Western Europe,
Cents/kWh"(most"recent)"
been concentrated in developed countries. This mainly
ez Arg uel en a" Pa Bn ra a" gu Ec ay uad " M or" Co exic lo o" m bia Do Bra " m in zil" ican "R Peru ep " ub lic C " Uru hile gu " ay "
looks ahead over the next decade to project where
Ready for investment
Strong potential; awaiting government action
Ven
emerging markets smart grid overview. This study
Emerging markets smart meter potential 10
Potential benefits
Outlook 2015 is the fourth edition of its annual
Ch
Financing%mechanisms% External"funding"already"in" place"from"IDB,"USTDA,"and" WB;"IDB"loaning"$78"M"for" distribuBon"loss"reducBon"
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"
Sources:"EIA,"IMF,"EdeNorte,"EdeSur,"EdeEste"
©(2014(Northeast(Group,(LLC(
Emerging(Markets(Smart(Grid:(Outlook(2015(|(Latin(America" 135(
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
Market share of leading vendors in Southeast Asia
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 *Note: This is a forward looking market share and includes both installed bases of AMI meters as well as announced contracts.
Source: Northeast Group
this study show the potential to progress quickly over the
© 2014 Northeast Group, LLC
course of the coming decade. Distribution losses by % and dollars lost
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
$117 $9 $24
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
0%
15%
30%
35%
40%
Average prince change from 2013 – 2014 in US cents/kWh
120%
10
Absolute increase (cents/kWh) % increase
8 6
100% 80% 60%
4
40%
2
20%
0
0%
-2
-20%
-4
-40%
-6
-60%
Percent change from 2013 – 2014
pilots have already begun in many of the other countries
25%
12
Note: Does not include 10 countries which did not change prices
will drive the smart grid market. Additionally, smart meter
20%
Average residential electricity price changes in emerging markets from 2013 - 2014
meter penetration rate for the 50 countries in this study is
pushing regulators to adopt complimentary regulations that
% T&D losses Total annual losses in $M
Source: Northeast Group; EIA
10%
where there are not yet targets. As a result, the overall smart
consumption residents. In all cases though, these targets are
$1,934
$307 $759
$49
$58.7 billion total annual losses across 50 emerging market countries
expected in the near term. In other countries, the targets serve as guides or only mandate deployments to high-‐
5%
$3,995 $256 $10,482 $3,680 $55 $788 $148 $33 $319 $639 $671 $274 $213 $364 $1,163 $99 $281 $85 $5,116 $147 $162 $1,101 $264 $904 $344 $41 $57 $150 $175 $3 $298 $339 $467 $160 $128 $4,061 $69 $13 $119
$16,184 $486 $591 $293
Average electricity price increase: 17.1% Source: Northeast Group
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?
•
© 2014 Northeast Group, LLC
24
23
20
22
20
21
20
20
20
20
20
20
20
19
CEE
18
Eurasia
China
17
MENA
Latin America
16
Southeast Asia
South Asia
15
Sub-Saharan Africa
20
•
14
•
Emerging markets smart grid forecast by region
20
•
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?
20
•
Table o f C ontents
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 Northeast Group, LLC
Table o f C ontents (cont.)
3.4 Comparison to developed countries
4. Vendor activity
52
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
7.6 Latvia
95
7.7 Lithuania
97
7.8 Poland
99
7.9 Romania
7.10 Slovakia
7.11 Slovenia
105
7.12 Turkey
107
93
101
8. Eurasia
8.1 Kazakhstan
103
109
113 © 2014 Northeast Group, LLC
Table o f C ontents (cont.)
8.2 Kyrgyzstan
8.3 Russia
8.4 Ukraine
8.5 Uzbekistan
115 117
119 121
9. Latin America
123
9.1 Argentina
9.2 Brazil
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
129
149
10.1 Bahrain
10.2 Egypt
155
10.3 Israel
157
10.4 Jordan
159
10.5 Kuwait
161
10.6 Lebanon
10.7 Oman
10.8 Qatar
127
153
163
165 167
© 2014 Northeast Group, LLC
Table o f C ontents (cont.)
10.9 Saudi Arabia
169
10.10 United Arab Emirates
171
11. Southeast Asia
173
11.1 Indonesia
177
11.2 Malaysia
11.3 Philippines
11.4 Singapore
11.5 Sri Lanka
185
11.6 Thailand
187
11.7 Vietnam
189
179
181 183
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 o f F igures, B oxes, a nd T ables
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
© 2014 Northeast Group, LLC
10
List o f F igures, B oxes, a nd T ables (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
© 2014 Northeast Group, LLC
List o f F igures, B oxes, a nd T ables (cont.)
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 6.2: Average electricity prices by region
74
Figure 6.3: Annual GDP growth (2014 – 2018)
74
Figure 6.4: Global distribution losses
74
Figure 6.5: Per-‐capita electricity consumption
74
Figure 6.6: Market share of leading vendors in BRICS
75
Figure 7.1: Smart meter potential in Central & Eastern Europe
81
© 2014 Northeast Group, LLC
List o f F igures, B oxes, a nd T ables (cont.)
Figure 7.2: Average electricity prices by region
82
Figure 7.3: Annual GDP growth (2014 – 2018)
82
Figure 7.4: Global distribution losses
82
Figure 7.5: Per-‐capita electricity consumption
82
Figure 7.6: Market share of leading vendors in Central & Eastern Europe
83
Figure 8.1: Smart meter potential in Eurasia
109
Figure 8.2: Average electricity prices by region
110
Figure 8.3: Annual GDP growth (2014 – 2018)
110
Figure 8.4: Global distribution losses
110
Figure 8.5: Per-‐capita electricity consumption
110
Figure 8.6: Market share of leading vendors in Eurasia
111
Figure 9. 1: Smart meter potential in Latin America
123
Figure 9.2: Average electricity prices by region
124
Figure 9.3: Annual GDP growth (2014 – 2018)
124
Figure 9.4: Global distribution losses
124
Figure 9.5: Per-‐capita electricity consumption
124
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 10.2: Average electricity prices by region
150
Figure 10.3: Annual GDP growth (2014 – 2018)
150
Figure 10.4: Global distribution losses
150
Figure 10.5: Per-‐capita electricity consumption
150
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 11.2: Average electricity prices by region
174
Figure 11.3: Annual GDP growth (2014 – 2018)
174
Figure 11.4: Global distribution losses
174
Figure 11.5: Per-‐capita electricity consumption
174
Figure 11.6: Market share of leading vendors in Southeast Asia
175
Figure 12.1: Smart meter potential in Sub-‐Saharan Africa
191
Figure 12.2: Average electricity prices by region
192
© 2014 Northeast Group, LLC
List o f F igures, B oxes, a nd T ables (cont.)
Figure 12.3: Annual GDP growth (2014 – 2018)
192
Figure 12.4: Global distribution losses
192
Figure 12.5: Per-‐capita electricity consumption
192
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.
© 2014 Northeast Group, LLC
Order Form – Emerging Markets Smart Grid: Outlook 2015 Pricing Single user – $3,750 | Enterprise license – $5,400 Clients purchasing a single user license are limited to one user for this report. The enterprise license allows all employees within a single organization to view the report. Any forwarding or sharing of the report to others who have not paid for it is strictly forbidden.
Email orders: Fill out and scan the sheet below. Please email orders to
[email protected] Telephone: We can be reached at +1.202.538.0848. Please have all of the information below ready to expedite your order. Customer information
NAME
SINGLE USER
POSITION
STATE
EMAIL
ENTERPRISE LICENSE
COMPANY
COUNTRY
AMERICAN
DISCOVER
ADDRESS CITY
TELEPHONE
POSTAL CODE
Credit card information Card type:
CARD NUMBER
CARDHOLDER’S NAME
MASTERCARD
VISA
EXPRESS
EXPIRATION DATE
CV CODE
SIGNATURE
DATE
STATE
POSTAL CODE
COUNTRY
BILLING ADDRESS CITY
By purchasing this report I agree to abide by the following terms and conditions: 1. Single-‐user license -‐ use of this report is restricted to one individual. 2. Enterprise license – use of this report is restricted to individuals within a single enterprise or organization. I agree not to forward or share this report to others who have not paid for its use.
