Brazil's Smart Grid Market Will Reach $36.6 Billion by 2022

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Apr 05, 2012, 05:57 ET

WASHINGTON, April 5, 2012 /PRNewswire/ -- Smart grid investments in Brazil will reach $36.6 billion by 2022, according to a new study released today by Northeast Group, LLC. Utilities in Brazil will use the smart grid investments to help reduce electricity theft, improve the reliability of electric infrastructure, offer new pricing plans for customers and enable economic growth.

"Brazil's rapidly growing economy is straining the existing electric infrastructure and smart grid investments will be critical to address the many challenges facing the sector. Brazil, with the fifth largest population in the world, is eager to upgrade its infrastructure in the run-up to the 2014 World Cup and 2016 Summer Olympics when it will be on the world stage," according to Northeast Group.

"A very significant problem in Brazil is the high rate of electricity theft. This is both a public safety issue and also unfairly requires paying customers to subsidize those stealing power. Smart meters are very effective tools in helping reduce electricity theft," according to Northeast Group.

Smart metering - or advanced metering infrastructure (AMI) - will be the smart grid program leading the way in Brazil. The centerpiece of Brazil's smart grid plans is a target set by ANEEL, the Brazilian electricity regulator, to deploy 63 million AMI meters by 2021. Detailed regulations are expected within the next year and these will drive large-scale AMI deployments across the country. In addition, distribution automation, home energy management and other smart grid technologies are expected to grow in Brazil over the coming decade.

"Establishing the regulatory framework will be the catalyst for large-scale AMI deployments," according to Northeast Group. "But even in advance of these regulations, Brazilian utilities have been very active in piloting AMI. Almost all of the utilities have piloted AMI in some form and five of the largest utility groups with non-technical losses above 14% found that AMI deployments can bring immediate benefits by reducing theft. Several Brazilian utilities are even already experimenting with full-scale 'smart city' concepts that leverage a number of smart grid applications, such as distributed renewable generation and sophisticated home area networks."

The study - Brazil Smart Grid: Market Forecast (2012-2022) - forecasts 14 segments of the smart grid market in Brazil. These include market values for AMI segments (meter hardware, communications, IT, professional services and installation costs); distribution automation segments (substation automation; fault detection, isolation and restoration (FDIR); volt/VAR optimization (VVO); and grid monitoring and control); wide area measurement (synchrophasors), and home energy management segments (home area networks, electric vehicle supply equipment and smart solar inverters) through 2022. The study also provides a detailed overview of the electricity industry structure in Brazil. It profiles the 12 consortia controlling 33 of the largest distribution utilities that make up 90% of the market. A smart grid vendor analysis in the report profiles those firms positioning themselves to win large smart grid contracts, including domestic Brazilian firms poised to partner with international smart grid vendors.

The study is 128 pages long and includes over 65 charts, tables and graphics. Primary research was completed on the ground in Brazil and secondary research used English and Portuguese sources. To order a copy of the study, please visit www.northeast-group.com or email Ben Gardner at: [email protected]

ABOUT: Northeast Group, LLC is a Washington, DC-based smart grid market intelligence firm. Our research is focused on the smart grid opportunity in emerging market countries.

Key questions answered in this study:

How large will the smart grid market – including 14 segments - become over the next decade?
What will the smart metering regulatory framework look like and when will it be put in place?
Which international vendors are already active in Brazil? Which domestic vendors are poised to partner with international firms to exploit the growing smart grid market?
How will Brazilian utilities build their smart meter business cases?
Which utilities have already developed pilot projects and which technologies are they using?
Where in Brazil are distribution automation and home energy management likely to develop?

Table of Contents
i. Executive Summary	1
ii. Methodology	8
1. Introduction	11
2. Brazil smart grid snapshot	19
2.1 Current situation	19
2.2 Regional comparison	21
2.3 Electricity industry structure	25
2.4 Smart metering regulatory framework	30
2.5 Market drivers and barriers	35
3. Smart grid market forecast	47
3.1 Deployment start date and pace	47
3.2 Cost estimates	47
3.3 Alternative scenario	50
4. Detailed smart grid market forecast and technology outlook	51
4.1 AMI	51
4.1.1 Meter hardware	52
4.1.2 Communications options	53
4.1.3 IT: meter data management and customer information systems	56
4.1.4 Professional services	57
4.1.5 Installation costs	57
4.1.6 Prepaid metering	57
4.2 Wide area measurement	58
4.3 Distribution automation	59
4.3.1 Overview of DA in Brazil	59
4.3.2 Distribution automation components	61
4.3.2.1 Substation automation and monitoring	62
4.3.2.2 FDIR	63
4.3.2.3 Volt/VAR optimization	64
4.3.2.4 Grid monitoring and control	65
4.3.3 Distribution automation activity in Brazil	66
4.4 Home energy management	68
4.4.1 Home area networks	68
4.4.2 Distributed generation: solar inverters with communication capability	70
4.4.3 Electric vehicle supply equipment	71
5. Utilities	74
5.1 AES	74
5.2 Iberdrola	78
5.1 CPFL	79
5.2 Light	81
5.1 Cemig	85
5.2 Endesa	88
5.1 Copel	91
5.2 Rede Energia	92
5.1 EDP	93
5.2 Eletrobras	95
5.1 Celesc	96
5.2 Cemar	97
6. Vendor activity	100
6.1 Domestic vendors	100
6.2 International vendors	106
6.2.1 International vendors in AMI projects	106
6.2.2 International vendors in distribution automation projects	110
6.2.3 International vendors poised to expand in Brazil	112
7. Conclusion	114
8. Appendix	115
8.1 Domestic electricity sector vendors in Brazil	115
8.2 List of companies mentioned in this report	119
8.3 List of acronyms	120


List of Figures, Boxes, and Tables
Brazil smart grid: key takeaways	4
Brazil smart grid: leading indicators	5
Smart grid development in Brazilian utilities	6
Combined smart grid forecast	7
Brazil smart grid forecast data	7
Figure 1.1: Smart grid value chain	11
Figure 1.2: Projected wind generation in Brazil	12
Figure 1.3: Smart grid model highlighting focus in Brazil	13
Table 1.1: Benefits of AMI in Brazil	14
Table 1.2: Demand response options	17
Figure 1.4: Solar and wind resources in Brazil	18
Table 2.1: Classification of meters by type	19
Table 2.2: Functionalities of electronic meters	20
Figure 2.1: Emerging markets smart meter potential	21
Figure 2.2: Current smart meter penetration rates in Latin America	22
Figure 2.3: Per-capita electricity consumption in emerging markets	23
Figure 2.4: Average residential consumption in Brazil	23
Figure 2.5: Global per-capita CO2 emissions	24
Figure 2.6: Actual and forecasted GDP growth in Latin America	24
Box 2.1: Smart grid throughout Latin America	25
Figure 2.7: Global residential electricity prices	26
Figure 2.8: Electricity generation mix in Brazil	26
Figure 2.9: Contracted and forecasted new generation	27
Figure 2.10: Utility ownership in Brazil	28
Box 2.2: Brazil political situation – the Dilma effect	29
Figure 2.11: Electricity regulatory structure in Brazil	30
Figure 2.12: Conventional and "white" tariffs	32
Table 2.3: Smart grid-related government action in Brazil	33
Figure 2.13: Global distribution losses	36
Box 2.3: Smart meter business case in Brazil – an analysis of loss reduction alone	36
Figure 2.14: Payback on AMI meter from loss reduction in average Brazilian home	37
Figure 2.15: Payback on average res/comm. AMI meter from loss reduction in two utilities	37
Figure 2.16: Aggregate cost savings from res/comm. non-technical loss reduction	38
Figure 2.17: Percent manufacturing sales lost to power outages	39
Figure 2.18: Electricity consumption growth in Brazil	40
Table 2.4: Percentage of customers who would alter habits if peak prices were to double	41
Table 2.5: Appliance ownership in Brazil	42
Table 2.6: Smart grid drivers and barriers in Brazil	43
Figure 2.19: Percentage renewable energy consumption in Latin America	45
Figure 3.1: Timeline of smart grid development in Brazil	47
Figure 3.2: Combined smart grid forecast	48
Table 3.1: Brazil smart grid forecast data	48
Figure 3.3: Annual AMI deployments	49
Figure 3.4: Brazil smart meter penetration rate	49
Figure 3.5: Delayed deployment scenario	50
Figure 4.1: AMI cost breakdown	51
Figure 4.2: Combined AMI forecast	52
Table 4.1: AMI forecast data	52
Table 4.2: Communications technologies	54
Figure 4.3: Phasor measurement unit (PMU) forecast	59
Figure 4.4: Distribution automation forecast	60
Figure 4.5: Substation and distribution automation in Brazil	62
Table 4.4: Home energy management forecast data	69
Figure 4.6: Home energy management forecast	69
Figure 4.7: Electric vehicle forecast	72
Figure 4.8: EV incentives in Brazil	73
Figure 5.1: Smart grid development in Brazilian utilities	74
Table 5.1: Brazilian distribution utilities	75
Box 5.1: Light's Optimus program	82
Figure 5.2: Non-technical losses as a percentage of total sales in Brazilian utilities	83
Figure 5.3: "Smart city" projects in Brazil	86
Figure 6.1: Leading smart grid vendors in Brazil	100
Table 6.1: Leading smart metering vendors in Brazil	101
Table 7.1: The next steps and necessary actions	114
Table 8.1: Domestic electricity sector vendors in Brazil	115