9 smart grid predictions for 2012

Power lines against bright sun

IDC Energy Insights is one of the smart grid sector’s top research firms. Each year it issues its top 10 predictions for energy and utilities. I attended this year’s webinar and came away with my own version, which I’ve shared with you below.

I want to emphasize that my version overlaps with IDC’s but is not precisely the same. These are my interpretations and reactions to IDC’s predictions. In many areas I agree with IDC. In a few others, I feel they may have over- or under-stated the issue. Case in point: I list only nine predictions and they are not all the same as the ones IDC chose to highlight.

To see the “official” top 10 list, go to this link, scroll down until you see the list of web conferences, and click on Energy – Utilities. You can replay the webinar and/or download the slides.

1). Utility mergers will accelerate.

2). Demand will flatten or even fall. After decades of sure, steady growth, consumption growth in North America has flattened and may begin to fall after 2012. This could force a difficult adjustment in an industry that has come to expect growth in consumption.

3). Municipals and co-ops will drive new AMI deployments. Their focus will be communications networks that can handle next territories (urban and rural). And that can handle multiple applications for multi-utilities (electric, gas, water).

4). Distribution automation spending will continue to accelerate thanks in part to short payback periods (18 to 36 months typically).

5). Utilities will invest heavily in analytics to manage Big Data. Utilities are getting large volumes of data from smart meters. Now they’re trying to figure out how to get business value from that information. And how to use it for “real-time” trading and “real-time” operations.

6). Smart buildings will become important to utilities. 25 states have energy efficiency standards or targets. Smart buildingscan help meet such goals. The building energy analytics market will double between 2012 and 2015, jumping from $193 billion to $402 billion.

7). 2012 is the make or break year for electric vehicles. That is when we will be able to see whether they will go mainstream anytime soon.

8). Grid-scale lithium-ion battery prices will plunge. Prices are not cheap yet, but they are already half what they were two years ago, with further big drops on the way.

9). Solar PV growth will moderate, falling to roughly 25% per year. It appears current grant programs will be allowed to expire, reducing the incentives to install solar PV.

Jesse Berst is the founder and chief analyst of Smart Grid News.com. He consults to smart grid companies seeking market entry advice and M&A advisory. A frequent keynoter at industry events in the US and abroad, he also serves on the Advisory Council of Pacific Northwest National Laboratory’s Energy & Environment directorate.

This article originally appeared on SmartGridNews.com. SmartGridNews.com is the Internet’s oldest, largest and highest-ranked smart grid site. Visit for up-to-the-minute analysis of smart grid trendssmart grid technology and smart grid companies. Sign up for the free email newsletter or follow SGN on Twitter.

Image courtesy of Horia Varian.


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