Report on the Global Smart Grids Market and its Contribution to Sustainable Development Goals

Executive Summary

The global smart grids market, valued at USD 67.97 billion in 2024, is projected to expand to USD 325.28 billion by 2033, reflecting a compound annual growth rate (CAGR) of 19%. This growth is intrinsically linked to the global pursuit of the Sustainable Development Goals (SDGs). Smart grids are critical infrastructure for modernizing energy systems, enhancing efficiency, and integrating renewable energy sources, thereby directly supporting key SDGs, including SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation and Infrastructure), SDG 11 (Sustainable Cities and Communities), and SDG 13 (Climate Action). The market’s expansion is driven by the urgent need for resilient, digital, and sustainable energy infrastructure to meet rising global demand.

Market Overview and Alignment with Sustainable Development Goals (SDGs)

Smart grids represent a fundamental modernization of traditional electrical grids through the integration of digital communication, automation, and advanced sensing technologies. This transformation enables efficient management of electricity from generation to consumption. The core function of smart grids is to create a resilient, intelligent, and sustainable energy ecosystem, which aligns directly with several United Nations Sustainable Development Goals.

• SDG 7 (Affordable and Clean Energy): By facilitating the integration of renewable energy sources like solar and wind, smart grids are essential for increasing the share of clean energy in the global energy mix.
• SDG 9 (Industry, Innovation and Infrastructure): The deployment of smart grids constitutes a significant upgrade to critical infrastructure, fostering innovation in energy management and digital technologies.
• SDG 11 (Sustainable Cities and Communities): Smart grids improve the reliability and efficiency of urban energy distribution, reducing outages and supporting the infrastructure needed for growing urban populations.
• SDG 13 (Climate Action): Through improved energy efficiency, reduced transmission losses, and support for renewables, smart grids are a pivotal technology for mitigating climate change.

Key Market Drivers and SDG Contributions

1. Grid Modernization and Digitalization: The integration of IT and IoT platforms allows for real-time monitoring and control, optimizing asset utilization and reducing energy waste. This modernization is a core component of building resilient infrastructure (SDG 9) and enhancing energy efficiency (SDG 7).
2. Renewable Energy Integration: Smart grids manage the variability of renewable sources by enabling bidirectional energy flows and distributed generation. This capability is fundamental to achieving targets for clean energy (SDG 7) and combating climate change (SDG 13).
3. Urbanization and Infrastructure Upgrades: As cities expand, smart grids provide a solution to the strain on aging energy networks. By improving reliability and reducing technical losses, they help build sustainable cities and communities (SDG 11).
4. Supportive Policies and Investments: Global government and utility investments in smart grid technologies underscore a collective commitment to long-term energy efficiency and sustainability goals, accelerating progress toward the 2030 Agenda.

Market Segmentation

By Offering:

• Hardware: Includes sensors, programmable logic controllers (PLC), smart meters, and networking equipment.
• Software: Comprises Advanced Metering Infrastructure (AMI), Distribution Management Systems (DMS), network management, asset management, substation automation, and cybersecurity solutions.
• Services: Encompasses consulting, deployment & integration, and ongoing support & maintenance.

Challenges and Restraints to SDG Achievement

• High Initial Deployment Costs: Significant capital investment required to upgrade legacy infrastructure can be a barrier, particularly for developing nations seeking to advance SDG 7 and SDG 9.
• Complexity and Interoperability Issues: The lack of universal standards for communication and cybersecurity poses challenges to creating integrated, secure, and resilient energy systems.
• Regulatory and Business Model Adjustments: The transition to new operational models that accommodate prosumers and dynamic pricing requires regulatory frameworks that can sometimes lag behind technological advancement.

Emerging Opportunities for Sustainable Development

• Smart Meters and Consumer Engagement: Large-scale deployment empowers consumers to manage their energy use, promoting energy conservation and efficiency in line with SDG 11 and SDG 13.
• Distributed Energy Resources (DERs): The growth of rooftop solar, EV charging, and energy storage creates opportunities for decentralized energy systems, enhancing grid resilience and promoting clean energy access (SDG 7).
• Software Analytics and Cybersecurity: Advanced analytics enable predictive maintenance and optimized grid performance, while robust cybersecurity ensures the stability of critical energy infrastructure (SDG 9).
• Growth in Emerging Markets: Investment in smart grid technologies in Africa, Latin America, and Asia presents a significant opportunity to build sustainable, efficient, and reliable energy infrastructure from the ground up.

Competitive Landscape

Leading market participants are focused on innovation and strategic partnerships to advance smart grid technology. Key players include:

• ABB Ltd
• Siemens AG
• Schneider Electric
• Itron, Inc
• Landis+Gyr Corporation
• Aclara Technologies LLC
• Cisco Systems, Inc
• IBM Corporation
• Wipro Limited
• Honeywell International Inc.
• S&C Electric Company
• Eaton Corporation Plc

Regional Analysis and SDG Progress

• North America: Leads the market due to significant investments in grid automation and modernization, advancing SDG 9.
• Asia-Pacific: Exhibits the fastest growth, driven by urbanization and government initiatives to adopt renewable energy, directly supporting SDG 7 and SDG 11.
• Europe: Strong market growth is supported by regulatory mandates for smart meter deployment and ambitious climate targets, aligning with SDG 13.

Strategic Implications for Stakeholders

• Utilities & Grid Operators: Investment in smart grids is crucial for meeting regulatory requirements, reducing operational costs, and facilitating the integration of renewables to achieve sustainability targets.
• Technology & Service Providers: There is a growing demand for scalable, secure, and interoperable solutions that support the transition to a decentralized and decarbonized energy system.
• Investors: The market’s strong growth trajectory presents a compelling opportunity to invest in critical infrastructure that is essential for the global energy transition and achievement of the SDGs.
• Policymakers & Regulators: Developing supportive policies and standardization frameworks is essential to accelerate smart grid adoption and maximize its contribution to national and global sustainability goals.

Market Outlook: A Pathway to Sustainable Energy

The global transition to smart grids is a critical step toward creating an intelligent, responsive, and sustainable energy ecosystem. This transformation is not merely a technological upgrade but a fundamental enabler of the worldwide effort to achieve the Sustainable Development Goals, ensuring a resilient and clean energy future for all.

Analysis of Smart Grids Article and Sustainable Development Goals (SDGs)

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 7: Affordable and Clean Energy
   • The article’s central theme is the modernization of electrical grids to efficiently manage electricity and integrate clean energy. It directly addresses the goal of ensuring access to affordable, reliable, sustainable, and modern energy for all. Smart grids are presented as a key technology for achieving this, with benefits like “improved energy efficiency” and the “integration of renewable energy sources like solar and wind.”
2. SDG 9: Industry, Innovation, and Infrastructure
   • The article focuses on building resilient infrastructure and fostering innovation. It describes smart grids as a “modernization of electricity networks” that create “resilient and intelligent energy ecosystem[s].” The discussion on “Grid Modernization and Digitalization,” involving advanced communication, automation, and IoT platforms, directly relates to upgrading infrastructure and promoting technological innovation.
3. SDG 11: Sustainable Cities and Communities
   • The article links the growth of smart grids to the challenges of urban development. It states that “rising urbanization” and “rapid urban growth puts pressure on aging transmission and distribution networks.” Smart grids are positioned as a solution to make cities more sustainable by supporting “increasing electricity demand in expanding cities” and enabling “smart city initiatives.”
4. SDG 13: Climate Action
   • Although not explicitly mentioned, the article’s emphasis on integrating renewable energy and improving energy efficiency directly contributes to climate action. By enabling a higher penetration of “solar and wind” energy and reducing overall energy consumption through efficiency, smart grids help in mitigating the greenhouse gas emissions associated with traditional power generation, which is a core objective of SDG 13.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 7 (Affordable and Clean Energy):
   • Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix. The article explicitly states that a key driver for smart grids is “increased renewable energy integration” and that they “enable integration of renewable energy sources like solar and wind.”
   • Target 7.3: By 2030, double the global rate of improvement in energy efficiency. The article highlights “improved energy efficiency” as a primary benefit of smart grids, which “efficiently manage electricity generation, distribution, and consumption.”
   • Target 7.a: By 2030, enhance international cooperation to facilitate access to clean energy research and technology… and promote investment in energy infrastructure and clean energy technology. The article details a global market projected to reach “USD 325.28 billion by 2033,” involving international companies like ABB, Siemens, and Schneider Electric, and notes that “Governments and utilities globally are investing” in this technology.
2. Under SDG 9 (Industry, Innovation, and Infrastructure):
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure. The article is centered on this target, describing smart grids as a way to create a “resilient and intelligent energy ecosystem” with “enhanced grid reliability” and “reduced outages.”
   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency. The article discusses “Grid Modernization and Digitalization” and “Infrastructure Upgrades” as core drivers, which involve upgrading “aging transmission and distribution networks” to improve efficiency and support sustainability.
3. Under SDG 11 (Sustainable Cities and Communities):
   • Target 11.3: By 2030, enhance inclusive and sustainable urbanization. The article directly connects smart grid adoption to “rising urbanization” and “smart city initiatives,” positioning them as essential for managing “increasing electricity demand in expanding cities.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For SDG 7 Targets:
   • Indicator for Target 7.2 (Renewable Energy Share): The article implies progress can be measured by the level of “renewable energy integration.” A specific indicator would be the percentage share of renewable energy (solar, wind) successfully managed by the grid.
   • Indicator for Target 7.3 (Energy Efficiency): The article mentions that smart grid investments “reduce technical losses.” Therefore, a direct indicator is the reduction in electricity losses during transmission and distribution.
2. For SDG 9 Targets:
   • Indicator for Target 9.1 (Resilient Infrastructure): The article states that smart grids lead to “reduced outages” and “improved grid reliability.” An implied indicator is the frequency and duration of power interruptions (e.g., System Average Interruption Duration Index – SAIDI).
   • Indicator for Target 9.4 (Upgraded Infrastructure): The article points to “smart meter rollouts” and “automation programs.” A clear indicator is the number or percentage of consumers with smart meters installed, or the level of automation deployed across the grid.
3. For SDG 11 Targets:
   • Indicator for Target 11.3 (Sustainable Urbanization): The article discusses supporting “increasing electricity demand in expanding cities.” An implied indicator is the grid’s capacity to reliably meet peak urban energy demand without failures or reliance on less sustainable power sources.

4. Summary Table of SDGs, Targets, and Indicators

Source: openpr.com