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North American smart grid networking market to nearly reach $1 billion by 2016

SUBNET Solutions Inc | Wednesday, July 11, 2012

The market for equipment necessary to bolster smart grid communication and its networking abilities is projected to surge from $700 million in 2011 to almost $950 million by 2016, according to a new report from IMS Research.

The growth is expected to come even as the number of smart meters deployed in North America begins to wane, with much of the upcoming deployments slated for more high-level utility-owned areas. In the last decade, smart metering projects were responsible for a large portion of the market's growth, however, going forward, intelligent electronic devices (IEDs) used for distribution and substation automation will increase smart grid technology shipments. This will in turn drive demand for traditional means of communication as well as a number of next-generation communication technologies.

Although North American smart meter deployments are slowing in 2012, substation modernization and distribution automation will provide the market with substantial growth, the report stated. Smart meter growth in Latin America will also have its hand in the market's expansion.

"Smart metering is only beginning in Latin America, but perhaps more interestingly, in North America, utilities are seeing increased efforts from AMI solution providers and grid automation specialists to effectively integrate smart meter data and infrastructure into more sophisticated distribution automation tasks. Distribution automation-enabled smart meter concentrators will hasten this process," said senior analyst Donald Henschel.

The report stated that the current environment for smart grid automation and networking vendors has many facets, and ample room for consolidation. Smart grid leader Siemens recently made a large purchase of one substation vendor, while substation automation specialist ABB also expanded its communication services through a recent acquisition.

These buyouts, Henschel says, could lead to a huge jump in automation technologies in the Americas.

"These acquisitions of networking and communications specialists by global automation brands reveal industry acknowledgement of networking as the next critical step to achieving the goals of the smart grid evolution," he said.

The IMS report, "The Americas Market for Smart Grid Networking - 2012," analyzes the short- and long-term opportunities for smart grid suppliers in the Americas that are developing networking and communications hardware for increased grid automation.

As more vendors churn out a wide variety of IEDs and other hardware, ensuring these systems operate in a compatible manner will be crucial for utilities. With SUBNET products, utilities can ensure interoperability of all substation devices, while the data from these IEDs can be transmitted securely, following NERC CIP requirements. 

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