The United Arab Emirates smart grid market is expected to register a CAGR of more than 2.5%, during the forecast period (2020 - 2025). Factors, like the ongoing investment in grid modernization, robust renewable energy growth, and the need to meet growing power demand, are expected to drive the market of the smart grid networks in the forecast period. However, developing a smart grid in a pace, with which the UAE's growing renewable energy sector and the significant initial investment for the modification of the network, is expected to slightly restrain the market in the future.
Dubai Electricity and Water Authority (DEWA) is planning to develop an advanced infrastructure, aiming to make Dubai's smartest city through smart grid and smart meters in different phases, with an investment of AED 7 billion, by 2035. This is expected to drive the smart meter market significantly.
According to IRENA, the United Arab Emirates is expected to install more than 18 GW of solar energy by 2030, which, in turn, may drive the demand for the smart grid in the future, creating vast opportunities for market players.
Initiatives, like Smart Applications via Smart Grid and Meters launched by Dubai Electricity and Water Authority (DEWA), for the period of 2016-2020, are expected to drive the growth of smart grid network in the future.
Key Market Trends
Advanced Metering Infrastructure to Witness a Significant Growth
- Advanced metering infrastructure (AMI) or smart metering is a fundamental component for grid development, which is expected to witness a considerable growth in the future and driving the smart grid market further.
- According to a report in 2018, the Middle East & North African region is expected to invest USD 17.6 billion in smart grid infrastructure, which, in turn, is expected to drive the smart meter market. The United Arab Emirates is expected to hold a significant share in the investment.
- The United Arab Emirates witnessed a significant growth in electricity production until 2018, which is expected to increase in the forecast period. With 116 TWh in 2014 to 136 TWh in 2018, electricity production increased the demand for smart grid and smart meters as well.
- In 2019, DEWA renewed its collaboration with Honeywell, to install 250,000 additional smart meters across Dubai, reaching 1 million installations since 2016.
- With increasing efforts to modernize the electricity grid and reduce transmission and distribution losses, United Arab Emirates is investing in advance metering infrastructure. This, in turn, is expected to drive the AMI market during the forecast period.
Supportive Government Initiatives and Renewable Energy to Drive the Market
- In April 2018, the Sharjah Electricity and Water Board successfully installed 48,000 smart meters in various parts of Sharjah and was continuously involved in driving the smart grid market significantly.
- In January 2019, DEWA inaugurated Smart Grid Station, comprising of a 200 kW photovoltaic solar power production system, a 9-kW wind turbine, and a 500-kilowatt hour lithium-ion battery energy storage.
- From 187 MW in 2015 to 1,885 MW in 2019, the United Arab Emirates showed a large-scale renewable energy installed capacity, which resulted in the deployment of the smart grid for newly installed power sources. Renewable sources are expected to drive the smart grid market considerably.
- According to a report in 2019, the value of the GCC smart grid market is expected to increase to USD 1.68 billion by 2026, as regional governments step up their deployment of smart grid infrastructure amid heightening demand for energy storage systems, with the United Arab Emirates contributing significantly.
- Therefore, with the above-mentioned projects and ambitious renewable goals, the United Arab Emirates is expected to witness a considerable growth in the market studied.
The United Arab Emirates smart grid market is partially consolidated. Major companies in the market include General Electric Company, Honeywell International Inc., Schneider Electric SE, Dubai Electricity and Water Authority, and Korea Electric Power Corporation, among others.
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