The Asia Pacific countries' efforts to meet their green energy objectives have boded well for the smart grid market in the region, as various governments have issued regulatory mandates requiring utilities to modernize their grids. The utilities, spurred on by government funding and the cost saving benefits of the advanced technology, have started moving toward smart grids.

New analysis from Frost & Sullivan, Asia Pacific Smart Grid Market, finds that the smart grids are set to revolutionize the profile of the current power sector from a unidirectional transmission system to an intelligent energy Internet. This change will bring with it business opportunities for a wide array of firms and changes in the operations of utilities.

"Currently, Australia, New Zealand, Singapore, South Korea, and Japan have announced major packages to stimulate smart grid development," said Frost & Sullivan Consultant Rajat Gupta. "The deployment of Smart Grid can result in significant cost savings for a utility through a reduction in manpower costs and peak load of power plants."

So far, only Australia has made it mandatory for utilities to install smart meters, but as the case of smart grids gets stronger, other countries in the region are expected to follow suit.

"As the demonstration projects for Smart Grids gather pace in developed nations, the business case for smart grids will emerge stronger," notes Gupta. "The new technology is all set to provide a massive growth opportunity to a variety of businesses including metering companies, network and software solution providers, system integrators, consultants, and equipment manufacturers."

For many countries in the Asia Pacific region, smart grids are bound to bring in returns in the long term, so it is crucial for utilities to invest heavily in them in the short term. The vendors that are part of the smart grid value chain need to customize products and service offerings to each country's and utility's need, as the market evolves from an emerging to a more mature stage.

However, while the developed nations have taken to smart grids, the lack of finance has restrained their widespread adoption in the developing countries of Malaysia, Indonesia, Thailand, and the Philippines. Once these countries learn from the experience of other nations and realize the cost and environmental benefits of large-scale smart grid implementations, their governments are likely to increase support to utilities through funding plans.