Middle-East Smart Grid Network Market - Growth, Trends, and Forecasts (2022 - 2027)

The Middle-East smart grid network market is expected to register a CAGR of 10.64% during the forecast period.

The market was negatively impacted by COVID-19 in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the long term, factors such as increasing renewable energy deployment and increasing installations of smart grid meters are expected to drive the market.
• On the other hand, Cyber security is a major concern in the smart grid network market and is expected to act as a restraint in the coming years as more and more data comes online.
• Nevertheless, the increasing investments in the EV charging infrastructure to reduce carbon emissions from the transportation sector and support the increasing adaption of EVs are likely to act as an opportunity for the smart grid market in the Middle East region during the forecast period.​
• Saudi Arabia is expected to dominate the growth of smart grids in the Middle-East region during the forecast period.

Key Market Trends

Software Component Expected to Dominate the Market

• Smart grid software solutions leverage digital solutions to facilitate the two-way transfer of energy and data between providers and consumers. Digitizing the power grid helps reduction in carbon emissions, reduces operational and management costs and outage downtime, and improves security and integrations with renewable energy systems and conventional energy sources. ​
• For instance, smart metering software provides metering programming is changing utility environment, where the software provider or the utility company can remotely program a smart-grid meter for two-way communication between provider and consumer. In addition, some companies provide smart meter programs, which include meter data management, automatic meter reading, and advanced metering infrastructure. ​
• As the smart grid sits on the digital platform, there are risks of cyberthreat associated with all aspects of smart grid domains, including smart grid devices and communication technologies that are the heart of the smart grid. In addition, digital services companies for grid technologies provide cybersecurity software, which offers safe communication and reduces the exposure to potential attackers and unintentional errors.​
• In a smart grid, substation plays a significant role in distributing quality power to customers, and the intelligence of substation equipment has been expanding to accommodate changes in the smart grid. The companies provide customized smart grid technology for substation automation system, which ensures the grid stay reliable under any operating condition and increases the operating life of crucial assets, and provide smart grid software for substation operation, which features such as protection relays, and monitoring solutions.​
• In 2020, Qatar Electricity and Water Corporation (KAHRAMAA) and Vodafone Corporation partnered to install about 600,000 smart meters in the country. The smart meters would be delivered on Vodafone's Internet of Things (IoT) SIM platform, providing real-time data to KAHRAMAA. The smart meter would be operated on the Vodafone Managed IoT Connectivity platform, a secure self-service platform that simplifies IoT management and gives the state-owned utility company complete visibility and control of the smart meter systems.
• Overall, the Middle Eastern software smart grid network market is expected to increase in the forecast period as the number of renewable energy systems increases, which directly aids the smart grid system, coupled with the upgradation of existing aging grids in the region. ​

Saudi Arabia Expected to Dominate the Market

• Fossil fuels dominate electricity generation in Saudi Arabia. The country has been focusing on reducing the dependency on oil for power generation by developing alternate energy infrastructure, including solar power sources.​
• The yearly increase in the electricity demand affects the country's oil export volume and earnings. To reduce the consumption of oil in power generation, Saudi Arabia is in the process of restructuring the power sector.​
• The electricity generation from renewable sources till 2016 was negligible. Still, it is expected to play a significant role in meeting the growing demand and diversification of electricity generation. In 2016, after the failure of its previous renewables program under the King Abdullah City for Atomic and Renewable Energy, the government established the Renewable Energy Project Development Office (REPDO) to deliver the 9.5 GW clean energy target set out in Vision 2030.​
• Further, Saudi Arabia has set a new renewable target of developing and installing 27.3 GW of clean energy by 2024 and 58.7 GW by 2030, of which Solar PV includes 40GW of the target. This is expected to increase the demand for integrating renewable sources with the country's transmission infrastructure and smart grid networks.​
• According to the International Renewable Energy Agency (IRENA), Saudi Arabia had a total installed solar PV capacity of 439 MW in 2021, up from 109 MW in 2020. Solar PV accounted for more than 87% of the installed renewable capacity in 2021, most of which came from large-scale solar power projects. The rapid growth is a part of the country's efforts toward its ambitious clean energy target and plans to generate 50% of its energy from renewables by 2030. ​
• Saudi Arabia has been witnessing a growth in adopting smart grid technologies. For instance, in 2021, the Saudi Electricity Company (SEC) announced installing 10 million smart electricity meters. SEC managed to replace 10 million analog meters across all its service regions. Of the 10 million units installed, the utility claims that 4 million were manufactured locally as part of efforts by Saudi Arabia to reduce its reliance on technology imports and create jobs locally. The Smart Metering Project (SMP) is the SEC's most important project for digital transformation in the country.​
• Moreover, with the stringent global emission standards coming into force, the automotive industry has been transitioning toward adopting EVs. The country has been partnering with EV manufacturers to diversify its automotive industry beyond the use of fossil fuels like oil. Most recently, Saudi Arabia signed a memorandum of understanding (MoU) with the United Kingdom to minimize carbon emissions and support Saudi Vision 2030. The MoU states both countries cooperate and share expertise to develop technologies, including smart grids and EVs. These developments are expected to pave the way for the development of EV charging infrastructure and the adoption of smart grid networks.​
• In May 2022, Electromin, a wholly-owned e-mobility turn-key solutions provider under Petromin, announced the rollout of electric vehicle charging points across Saudi Arabia. The network includes 100 locations across the country, powered by a customer-centric mobile application. Electromin's charging network will offer a complete spectrum of services from AC home/office chargers, DC fast chargers, all the way through to DC ultra-fast chargers, catering to all customer segments.​
• Thus, owing to the developments in renewable sources creating a need for upgrading the electricity grid networks, along with the government initiatives and the rising adoption of e-mobility infrastructure, the smart grid network is expected to grow in the Saudi Arabia market during the forecast period.​

Competitive Landscape

The Middle-East Smart Grid Network Market is moderately fragmented. Some of the major players in the market (in no particular order include Honeywell International Inc., Hitachi Energy Ltd., Siemens AG, Landis+Gyr, and General Electric Company.

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