The creation of the smart grid remains a colossal undertaking. Many complex smart grid programs are underway, but the scale of what remains to be done is enormous. The challenges ahead translate into strong growth for vendors of smart grid technologies – transmission upgrades, automation of substations and distribution, smart grid IT, and smart meters. According to a new report from Pike Research, a part of Navigant’s Energy Practice, the market for smart grid technologies will grow from $33 billion annually in 2012 to $73 billion by the end of 2020, totaling $494 billion in cumulative revenue over that period.

“The overlay of modern smart grid technologies onto existing grids promises numerous benefits to utilities, including increased reliability and capacity, reduced energy losses, and deferring or eliminating the need for new generation resources,” says senior research analyst Bob Lockhart. “These benefits reach far beyond the business of any particular utility to underlie economic growth, social well-being, and the shift to energy sources that are less damaging to the environment.”

There is no single “smart grid solution” that will work for all utilities, according to the report. Utilities are likely to take individual approaches to smart grids, some starting with smart metering while others begin with transmission upgrades. However, the number of smart meter deployments (estimated at a total of 832 million smart meters during the 2011-2020 timeframe) implies that quite a few utilities have yet to set out on an advanced metering infrastructure course but are likely to do so over the coming seven years.