With the rising prices of energy and need to correct inefficient water grids, smart water metering presents a solution and long-term spending reduction strategy. If this market is fully embraced by utilities, it will be worth $13.2 billion by 2020 in Europe for meter manufacturers, installers and network and data management companies.
Frost & Sullivan's Research Analyst Seth Cutler explains: “The smart water metering market presents a significant industry convergence opportunity to participate in the global drive for carbon footprint reduction, increased efficiencies and strategic decision making. The European market is no exception as water utilities look to run smarter and smoother distribution systems”.
UK, France and Germany will have 57.2% of the market in 2020. This figure is impacted by the speed of smart water metering adoption in these countries, but very importantly also the fact they have a large share of the European population, and so a larger market. Government regulation is not expected to be a large driver in the smart water metering market (unlike electricity/energy). Growth will instead largely come from utilities looking to take advantage of the level of network/operational efficiencies and savings that can be made.
There are a number of factors affecting the market attractiveness of each region:
In the UK, a strong emphasis on business case development in relation to water scarcity is restricting faster roll outs in the country. Once initial pilots reveal the indirect benefits of smart water metering, this market is expected to grow quickly. The UK, with a current 'traditional' metering rate of 30%, is expected to largely jump straight to smart metering.
France is heavily impacted by the decision of two major water distributors in the country: Veolia and Suez/Lyonnaise des Eaux. The high market share of these companies has afforded them the ability to roll out smart metering at a faster rate than smaller utilities. Their dominance has also lead to partnerships with and acquisitions of complimentary companies in smart water metering industries, such as telemetry and communications. Partnerships and M&A activity is expected to continue and provide a key source of growth in the market.
The German market is among the most advanced markets for smart water metering in Europe. This is due to multiple factors. The country is host to numerous smart meter manufacturers, there is a strong tradition of water metering and a healthy investment environment. Germany is also host to the Open Metering System Group, which seeks to establish universal standards in smart metering for all energy types: electricity, water, gas and heat. If this group was to make headway in its goals, it could have a significant impact on the market in terms of investor confidence.
The Iberian Peninsula is located in one of the most water stressed regions in Europe and this circumstance is exacerbated each year through seasonal tourism. This impacts the immediate perspective taken on smart water metering as it is positioned as a solution for these issues, rather than for the entire market. In a drive to create more equitable charging, smart water metering pilots have been deployed in coastal areas. For this region, smart water metering also presents an alternative to high-cost desalination projects. This will likely save money in the long-term as well as adjust consumption behaviour. While this region is currently in the midst of a debt crisis, impacts on smart water metering are expected to be low. In fact, smart water metering should be seen as a solution and an investment that will help reduce long-term spending.
Italy, Greece and Malta
Italy, Greece and Malta are the only European countries to see a full smart water metering roll-out occurring. While geographically small, Malta's full-scale smart water metering roll-out may have implications on the rest of Europe as its successes and challenges are made known. A diverse utility base may slow down initial deployment in Italy and Greece, but it is expected to be temporary and this market should develop quickly with the rest of Europe, especially as a few leading utilities emerge.
Frost & Sullivan has recently organised an on-demand web conference titled Smart Water Metering Market – Roadmap to Spending and Carbon Footprint Reduction. The webinar - which is open to everyone interested in this sector - summarises Mr Cutler's market findings by giving an analysis of market forces, tier and market share analysis, current and emerging trends, and future opportunities. To receive the presentation and a link to the recording please email Chiara Carella, Corporate Communications, at chiara.carella[.]frost.com with your full contact details.
Moreover, a research service on the Smart Water Metering Market will be published soon. This study breaks down the market to uncover its drivers and restraints by region and Europe-wide, trends and variations in deployment, impacts of the current debt crisis and future growth for the industry. Please contact Chiara Carella at the email address above for further information on the study.
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