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Mexico's smart grid market will move a cumulative US$8.3bn by 2020, trailing only Brazil in Latin America in terms of potential, according a study by Washington, DC-based research and consulting firm Northeast Group.
The smart metering market represents the biggest opportunity in Mexico, according to the consultancy, with more than 21mn devices expected to be deployed by the end of the decade.
That segment alone will contribute US$5.1bn to the country's overall smart grid market value by 2020. This includes meter hardware, communications, IT, installation costs and professional services. Combined with Northeast Group's forecast for South America, the overall Latin American smart metering market is expected to reach nearly 126mn units by 2020.
In addition to smart meter deployments, Mexico is seen investing heavily in distribution automation, wide area measurement and home energy management in the latter half of the decade. These segments are expected to make up an additional US$3.2bn in cumulative market opportunity by 2020.
"Mexico is well positioned to develop into a leading smart grid market, both in the Latin America region and globally. Like other Latin American and emerging market nations, the country faces high rates of electricity theft and power outages, both of which can be reduced through smart grid technologies," Northeast Group said. "Mexico is also uniquely situated to benefit from positive spillovers from the US market. These include smart grid standards, US vendors looking for new markets and a transfer of smart grid technical know-how."
"Mexico will also benefit from a single, state-owned utility that ensures a streamlined regulatory framework and efficient deployment.... CFE [Mexico's state power company] can ensure that smart grid deployments are quickly rolled out to all parts of the country."