Power Grid Presents Great Market Opportunity

Nov. 21, 2008
The bad news is that today’s power grid is wasteful, costly, inefficient, and dumb, according to Lux Research. In other words, it’s ill-equipped to address many pressing energy issues, from the need to focus on climate change and carbon cost, to the deman

The bad news is that today’s power grid is wasteful, costly, inefficient, and dumb, according to Lux Research. In other words, it’s ill-equipped to address many pressing energy issues, from the need to focus on climate change and carbon cost, to the demand for high reliability.

But, according to Lux’s research found in “Alternative Power and Energy Storage State of the Market Q4 2008: Weaving the $65 Billion Power Web,” the good news is that the advent of distributed generation, distributed storage, and distributed intelligence will change power infrastructure into an intelligent and more nimble power web.

Building that $65 billion web will create excellent market opportunities. Highlights of the report include:

  • The market for metering hardware and software plus networking technologies for the smart grid is already $2.7 billion in 2008 and will grow to $4.7 billion in 2013.
  • Light electric vehicles will be dominated by hybrid electric vehicles (HEV) in the next two years. Plug-in HEVs (PHEVs) and full electric vehicles (EVs) will only enter the market after 2010. In total, the light electric vehicle market will grow from $551 million in 2008 to $3.1 billion in 2013.
  • Lithium raw materials will not be a constraint in the near term for growth in lithium-ion batteries for transportation use, although prices will be volatile, and investors will jump in to fund mining activities.
  • Investment in alternative power and energy storage is shifting from batteries and fuel cells to smart grid technologies that venture capitalists hope will have a faster payback time. Smart grid technologies garnered $262 million in investment from 2007 through mid-2008.
“In the next five years, transportation and utility markets will see higher rates of growth for energy-storage technologies like Li-ion and other large-format batteries,” said Ying Wu, senior analyst at Lux Research. “After down time for investments in 2009 and 2010, with stagnant VC investments and decreased IPOs, financing in alternative power and energy storage will see a resurgence in 2011 and beyond.”

Lux Research
www.luxresearchinc.com

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