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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
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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)
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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
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%"Techn
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"non
Stechn
ical"
losses"(m
ost"recen
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Colombia"ArgenBna"
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Chile"
Brazil"
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Venezuela"
Dominican"Republic"
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Poten&
al)benefits)
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Peru"
Chile"
Uruguay"
Colom
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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"
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Colom
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Brazil"Peru"
Dominican"Republic"Chile"
Uruguay"
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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.
© 2014 Northeast Group, LLC
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
© 2014 Northeast Group, LLC
• 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
© 2014 Northeast Group, LLC
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
© 2014 Northeast Group, LLC
Table of Contents (cont.)
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
© 2014 Northeast Group, LLC
Table of Contents (cont.)
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
© 2014 Northeast Group, LLC
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
© 2014 Northeast Group, LLC
List of Figures, Boxes, and Tables (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 of Figures, Boxes, and Tables (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 of Figures, Boxes, and Tables (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.
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