Nordic countries lead in encouraging power grid modernization

2. Netherlands (3.87 percent market share)

European countries — led by Nordic countries and also Italy and the Netherlands — are at the top of a new index ranking regulatory frameworks that enable power grid modernization. Countries were scored based on ten indicators including smart meter targets, pilot projects, financing mechanisms, distributed generation incentives and other policy measures that encourage grid modernization.

Other OECD countries such as New Zealand, South Korea and Canada joined the European countries among the leaders, according to a new study published by Northeast Group.

"Globally, OECD countries are by and large the leaders for their smart grid regulatory frameworks," according to Ben Gardner, president of Northeast Group. "But there are also non-OECD countries that have progressive regulations in place, including Romania, Singapore and the United Arab Emirates. At the same time, surprisingly some developed countries are lagging behind. For example, Germany and Belgium have yet to agree to meet European Union smart meter targets."

Regulations have been critical for driving smart grid infrastructure investment across the world. In the European Union, regulations such as the mandate for 80 percent smart meter penetration by 2020, are laying the groundwork for major grid modernizations. In the United States, several years ago the Smart Grid Investment Grant (SGIG) program was a key catalyst for the smart grid market.

Northeast Group's study also includes indicators highlighting the benefits of smart grid investment in each country. These include demand response benefits and non-technical loss reduction benefits. For example, wealthy OECD countries are notable for their high electricity demand rates and can therefore achieve significant benefits through demand response programs enabled by smart grid infrastructure.

Also, lower income countries can still benefit by using smart meters to reduce high non-technical loss rates. In some low-income countries, such as Nigeria, smart grid deployments are still progressing for this reason even without well-developed regulations. Northeast Group analyzed these leading drivers for all 52 countries.

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