northeast group, llc Emerging Markets Smart Grid: Outlook 2018 Volume VII January 2018 www.northeast-group.com
* * 5,000* 4,000* 3,000* 2,000* 1,000* 0* 40%* 30%* 20%* 10%* 0%* U'lity* Sources:*EIA,*IMF,*OSINERGMIN,*IDB,*Edelnor,*Luz*del*Sur* 2028*split:*PLC:*19%;*RF:*76%;*Cell.:*6%** Leading+distribu6on+u6li6es+ Customers* Sales* (GWh)* Edelnor* 1,266,340* 7,756* Luz*del*Sur** 1,023,890* 7,452* 30* 25* 20* 15* 10* 5* 0* *********=*50Ccountry********** weighted*average* 10* 8* 6* 4* 2* 0* 2018 2019 2020 2021 2022 Regulatory+framework+ 0* 2* 4* 6* 8* 10* 0 100,000 200,000 300,000 400,000 Emerging Markets Smart Grid: Outlook 2018 Northeast Group s Emerging Markets Smart Grid: Outlook 2018 is the seventh edition of its annual look at smart grid infrastructure opportunities in the developing world. Since the first edition, smart grid plans, regulations, and deployments have progressed from nascent pilots to large-scale rollouts. For this reason, for the first year, this study focuses on investment over a five-year period rather than a ten-year period. Over the next decade, almost all emerging market countries will see significant smart grid investment. But now there are extensive near-term opportunities to take note of and quantify over the next five years. This study highlights the 50 emerging market countries that will see the most smart grid investment in the near term. kwh/person*(2015)* Emerging Markets Smart Grid: Outlook 2018 Peru% Popula'on:*31,828,000* GDP/capita*at*PPP**(2017):*$12,160* GDP*growth*(Avg.*2018C2022):*3.8%* Genera'on* Transmission* Distribu'on* U'li'es*cannot*directly* control*assets*in*mul'ple* segments,*but*parent* companies*can*own*assets* in*mul'ple*segments.** %*Technical*and*nonCtechnical* losses*(most*recent)* Smart+grid+business+case+indicators+ Opera&onal*benefits* Moderate* U'li'es*use*manual* meter*readers,*but* labor*costs*are*low.** Industry+structure+ Demand:side*benefit*poten&al* Electricity*consump'on/capita* Venezuela* H+ M+ L+ Total*meters:*6,355,506* Residen'al*meters:*5,465,735* Smart*meters*(2017):*14,716* Cents/kWh*(most*recent)* The6*reduc&on* Percentage*T&D*losses* Electricity*prices* Venezuela* Venezuela* Financing*mechanisms* No*smart*grid*funding*so*far,* but*idb*has*approved*$50* million*in* green*loans *to* Peru,*which*can*cover* mul'ple*environmental* sustainability*programs.* Poten2al+benefits+ Smart*meter* target* Regulatory+framework+ 2! Pilot*projects* 1! Funding/ financial* incen'ves* Technical* standards* Deployment* plan* Major* infrastructure* investment* 2! 0! 1! 3! Previous*goal*of*full*rollout*by*2025* has*not*been*followed*with* requisite*regula'ons* Very*small*pilot*projects*toCdate;* with*largest*pilot*in*2017*totaling* 10,000*meters* Funding*has*not*yet*been* determined,*but*commitment*to* infrastructure*spending*likely* No*direct*focus*on*smart*grid* standardiza'on* Government*looking*to*establish* smart*grid*roadmap* High*growth*combined*with*new* government*likely*to*lead*to*heavy* investment*in*infrastructure* CO 2 *target* 4! 30%*reduc'on*by*2030* Distributed* genera'on* incen'ves* 1! EV*incen'ves* 1! Outreach* program* northeast group, llc** 1! Has*recently*begun*legisla've* nego'a'ons*for*promo'ng* distributed*genera'on* EVs*are*part*of*overall*smart*grid* plan,*but*no*incen'ves*yet* Current*energy*efficiency*plans* include*outreach*campaigns* Peru+5>year+AMI+forecast++ (annual+units)+ New*AMI*residen'al*units*shipped* Emerging Markets Smart Grid: Outlook 2018 Country dashboards 79 The focus on emerging markets is increasingly relevant for parallel reasons. After some delays, most major deployments are already awarded and being deployed in developed countries in North America, Western Europe, and East Asia. These markets represent over 75% of the current installed base of smart meters. As these projects wrap up, vendors will need to focus on new opportunities. These Largest utilities in emerging market countries (ex. China) 25,000,000 20,000,000 Total AMI opportunity AMI announced AMI deployed 15,000,000 10,000,000 5,000,000 0 opportunities are now opening up across emerging market countries, with notable tenders and plans for full rollouts across all emerging market regions. In short, smart grid infrastructure in emerging markets will quickly transition from a potential future opportunity to concrete near-term awards. Cumulative AMI deployments (units, 2018 2022) Smart grid projects in emerging markets are not without risk. Several previously forecast rollouts have failed to materialize, and even recent tenders have been rescinded. But market conditions have improved increasingly every year at the start of 2018 there are more tenders and more smart meter regulatory targets than in any previous year. Meanwhile, nontechnical loss rates remain high, GDP and electricity consumption rates continue to grow, and for the first time, perendpoint AMI prices have begun to steadily decline. As a result, the conditions are now in place for these 50 countries to invest over $67 billion in smart grid infrastructure over the next five years. 0 5,000,000 10,000,000 15,000,000 20,000,000
Key questions answered in this study: Which 50 emerging market countries will deploy the most AMI meters over the next five years? Which tenders are expected for 2018 and which tenders are stalling? Which countries were most active in developing smart grid-related policies and which countries took a step back? What is the forecast market for AMI, distribution automation, wide area measurement, home energy management, IT and battery storage in each emerging market region? How do emerging markets compare with developed countries in forecast deployments? Table of Contents i. Executive Summary 1 1. What s new in 2018 3 2. Emerging markets smart grid indicators 20 3. Emerging markets smart grid market forecast 30 4. Country dashboards 38 5. Appendix 92 5.1 Methodology 92 5.2 Smart grid overview 95 5.3 Global smart grid activity 102 5.4 List of companies and acronyms 105 List of Figures, Boxes, and Tables Figure 1.1: Changes to the countries included in this Outlook study 3 Figure 1.2: Annual AMI deployments across 50 emerging market countries 4 Figure 1.3: Annual AMI deployments by country 5 Figure 1.4: Leading emerging market smart grid markets 6 Table 1.1: Countries with significant existing AMI deployments 7 Table 1.2: Countries with near-term AMI tenders and/or plans 8 Table 1.3: Countries with medium-term AMI plans 9 Figure 1.5: Cumulative AMI deployments (2018 2022) 12 Figure 1.6: 2018 AMI annual forecast 13 Figure 1.7: Notable AMI deployments and announcements in 2017 14
List of Figures, Boxes, and Tables (cont.) Figure 1.8: Largest utilities in emerging market countries 15 Table 1.4: Notable smart meter targets in emerging markets 16 Figure 1.9: Emerging markets smart meter potential 17 Figure 1.10: Average global AMI price per endpoint 18 Figure 1.11: All-in per-endpoint costs per region 18 Figure 2.1: Smart grid regulatory country index 21 Figure 2.2: Smart grid potential benefit country index 22 Figure 2.3: Emerging markets smart meter potential 23 Figure 2.4: T&D losses by % and dollars lost 24 Figure 2.5: Electricity consumption per capita 25 Figure 2.6: Average residential electricity tariff 26 Figure 2.7: Average GDP growth (2018 2022) 27 Figure 2.8: Typical number of outages per month (SAIFI) 28 Table 2.9: Typical duration of outages, in hours (SAIDI) 29 Figure 3.1: Emerging markets smart grid forecast by region 32 Table 3.1: Emerging markets smart grid forecast data by region 32 Figure 3.2: Emerging markets smart grid forecast by segment 33 Table 3.2: Emerging markets smart grid forecast data by segment 33 Figure 3.3: Emerging markets AMI forecast by region (cumulative) 34 Table 3.3: Emerging markets cumulative AMI forecast data by region 34 Figure 3.4: Emerging markets AMI forecast by region (annual) 35 Table 3.4: Emerging markets annual AMI forecast data by region 35 Figure 3.5: Regional residential electricity meter market size in 2017 36 Figure 3.6: Regional residential electricity meter market size in 2022 36 Figure 3.7: Global AMI forecast comparison 37 Figure 3.8: Global smart grid forecast comparison 37 Figure 4.1: Countries with in-depth smart grid dashboards 41 Figure 5.1: Smart grid value chain 96 Figure 5.2: Global smart grid activity 102 Figure 5.3: Cumulative smart grid investment by region 103 Figure 5.4: Annual smart grid and AMI investment by region 103 Table 5.1: Global smart grid drivers and activity 104
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 T&D losses (%). Therefore, this study includes over 100 additional unique charts and tables in addition to those cited above.
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