The fifth edition of the South America Smart Grid: Market Forecast study published recently by Northeast Group, LLC, says the South American smart grid infrastructure market will finally be an investment destination in the 2020s, after several false starts. Led by Brazil, Colombia, and Chile, South American countries will invest US$18.1 billion in smart grid infrastructure over the next decade, according to the study. Investment hinges on global recovery from the COVID-19 pandemic and its economic fallout — a recovery not yet in sight.
"Obviously the global pandemic raises questions about all investments, but the key characteristics of the South American market should remain in place," said Chris Testa, research director at Northeast Group. "After years of unrealistic promises, South American utilities and regulators have begun to set pragmatic timelines and develop the regulations needed for larger investments. As the market is poised for medium-term growth, the near-term effects of COVID-19 should be limited. At the same time, economic challenges have stalled smart grid progress in South America in the past, so the ongoing response to the pandemic will help determine if large-scale investments move forward."
Prior to COVID-19, promising signs were emerging throughout the region. Chile and Colombia had been finalizing regulations for large-scale smart metering rollouts and several of the largest Brazilian utilities had begun trials in advance of larger deployments in early 2020. These efforts have been driven, in part, by new entrants to the market.
The Italian multinational utility Enel has expanded its already strong presence in the region and recently certified its own smart meter in Brazil. Notably, multiple Chinese players have also entered the market, buying utilities and local vendors. This should lead to lower cost metering infrastructure and an improved business case, while also placing greater importance and scrutiny on vendor selection for communications and software.
Local content requirements mean that most international vendors will need local partners in Brazil, but overall the market remains open and competitive. Leading international vendors include ABB, Aclara, Cisco, Enel, Engie, GE, Honeywell, Iskraemeco, Itron, Kamstrup, Landis+Gyr, NES, Sagemcom, Schneider, S&C, SEL, Siemens, Trilliant, and Ziv, in addition to Chinese vendors that have acquired local companies such as Hexing, Sanxing, and Wasion.
The study South America Smart Grid: Market Forecast (2020 – 2029) Volume V is available here.
