The utility industry is on the verge of transformation, mainly driven by the advancements in technology. Changing consumer demands and lucrative opportunities in renewable energy production are leading the companies to invest in alternative sources and upgrade their infrastructure. Digital technologies such as smart meters and smart grids form the basis of digital utility. The growth of digital utilities market is undermined by the growing demand for energy across the globe, which in turn has compelled the utility providers to change their traditional business model in order to create a new path for growth.
Market overview
The global digital utility market is projected to grow at a CAGR of 12.57% during the forecast period from 2017 to 2022, to reach a value of USD 244.31 billion by 2022.
Based on network, the transmission and distribution segment is projected to hold the largest market share, mainly driven by the aging infrastructure in the power utilities industry. However, the retail segment is expected to witness the fastest growth over the forecast period.
Based on technology, the hardware segment holds the largest market share, owing to the high cost as compared to the other digital solutions and services. It includes various tangible aspects of the digital utility market, covering equipment from smart meters to smart transformers and all the products of a digital substation. However, the integrated solutions segment is projected to witness the highest growth over the next few years.
How is the market progressing, geographically?
The market for digital utilities in North America is expected to be the leading market during the forecast period, owing to the ongoing upgradation of aging infrastructure and rising demand for electricity in the region. The utilities in this region have been witnessing a digital transformation for the past several years. The utility providers in this region are actively focusing on the upgrading power infrastructure through digital technologies such as smart meters and smart grids, among others. Increased investments from the government are expected to present major growth opportunities for the digital utility market.
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What is driving and restraining the market growth?
The growth of the global market for digital utility is being primarily influenced by the following factors:
- Increasing number of distributed and renewable power generation projects
- Stringent regulatory requirements for electric utilities
- Rising need to improve the productivity and efficiency of utilities
- Energy efficiency mandates demanding carbon emission reduction
In addition, the upcoming smart city projects are expected offer attractive growth opportunities for this market over the coming years.
On the downside, high initial costs are expected to hinder the growth of this market to a certain extent. Moreover, cybersecurity threats in the power and utilities sector and challenges associated with implementing new technologies are the major challenges to be tackled by the market players in order to witness continued growth.
Key players and growth strategies implemented
Accenture plc (Ireland), Capgemini S.A. (France), General Electric Company (U.S.), Siemens AG (Germany), SAP SE (Germany), and International Business Machines Corporation (U.S.) are some of the leading players operating in the global digital utility market. Among all the growth strategies adopted, contracts & agreements and new product launches were the most common strategies implemented by the market players in order to sustain their position as well as increase their shares in the market.
