Western Europe's energy sector is forecast to commit $133.7bn to smart grid infrastructure by 2027.
Western Europe "is in the process of massive power grid modernisation investments to underpin its position as one of the global leaders in promoting energy efficiency and renewable energy development", according to Northeast Group, the smart infrastructure market intelligence firm.
According to the group’s report, Western Europe Smart Grid: Market Forecast (2017-2027), these smart grid infrastructure investments are being led by large-scale smart metering projects that are already underway. Distribution automation, battery storage and information technology are also likely to receive increased investment.
Ben Gardner, president of Northeast Group, commented: "Western Europe has long been a global smart grid leader and is solidifying this position with large-scale smart meter deployments in countries such as France and the UK.
"The large German market has been slower to develop but is now getting a boost with new regulations. And early leaders Italy and Sweden are set to begin their first replacement cycle of smart meters. As a result, there will be billions of dollars of smart grid infrastructure investment in the region over the next decade."
Northeast Group's report notes that smart grid infrastructure deployments are driven primarily by EU regulations, which require most countries to deploy smart meters to 80% of residential customers by 2020.
Northeast Group projects that Western Europe as a whole will reach 67% penetration by 2020, with 12 countries meeting the 80% mandate.
The firm says: "The EU has recently increased its renewable energy and emissions reductions goals and will need to invest in a wide range of smart grid infrastructure to ensure that European grids can handle these challenges. Distribution automation and renewable energy integration will be of particular importance and will be the largest overall smart grid segment."
According to the European Commission's website, in 2015, 25 of the 28 EU countries met and exceeded their national indicative trajectories. Some countries have already surpassed their 2020 targets.
The Renewable Energy Directive has set individual renewable energy targets for all EU countries that take into account their positions and potential to use more renewable energy.
Meeting these individual targets will allow the EU as a whole to reach its 2020 target of 20% renewable energy, and the State of the Energy Union report now shows that Europe is on track to achieving this target. The EU 2030 Framework for Climate and Energy also sets a binding target that at least 27% of the energy used in the EU by 2030 should be renewable.