Asia's smart grid spending surge

Asia Smart Grid

2010 could see smart grid technology really take off in the Asia region as a number of governments have pledged to spend billions of dollars on developing the technology and infrastructure needed to upgrade their antiquated electrical grid systems.

Japan, South Korea and China are investing about US$9 billion this year in infrastructure and IT to make electricity networks more efficient. It's hoped that this will create numerous growth opportunities for niche technology firms.

A smart grid system basically allows utilities to automatically monitor and manage electricity usage in a way that is more reliable and flexible through computerised monitoring of electricity flowing through a power grid. This is vital to harnessing the full potential of the region's renewable energy potential.

Outpacing America

Yet again, the US market is likely to be outpaced by those in Asia as the money set aside for smart grid development by the Obama administration falls short of countries like China, who alone are planning to spend US$7 billion in the sector this year.

In an interview with Reuters vice-president of IBM's Global Energy & Utilities Industry, Brad Gammons, echoed this sentiment, "China is pursuing smart grid as aggressively or more aggressively than any other country in the world right now."

"They're very focused and have a very strong commitment to move in that direction," he added.

The high level of government spending also opens up many FDI opportunities, something companies like IBM, Cisco and Microsoft are taking full advantage of.

Cooperation between Europe, the US and Asia

But Asia's domestic firms will also benefit from the increase in demand for power distribution systems such as pole transformers and storage batteries. As reported by Money Control Osaki Electric Co., which makes electric measuring devices in Japan, and South Korea's LS Industrial Systems, which owns power transmission and distribution technologies, are examples of companies that could get a boost from smart grid development.

Over the next ten years its estimated that China could spend in excess of US$100 billion upgrading its power distribution systems, but Japan and South Korea are already a couple of steps ahead of China in upgrading theirs. They will both be spending around US$800 billion each in 2010, but over the next two decades South Korea are likely to spend around US$23.7 billion on its smart grid.

This development is vital to the progress of similar projects across the world, and if Europe, the US and Asia can share their knowledge and skills on smart grid technology then we could all see the benefits of smart use of electricity.

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Daniel Jones

Daniel is a Politics and Philosophy graduate from Cardiff University where he also worked as a section editor on the award winning student newspaper. After university he joined an IT support company where he was a B2B online writer. He loves anything to do with sport and joined GDS in July 2009.

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