‘Smart grid’ has been in the talks for almost a decade in the Asia-Pacific region starting with the Jeju island test bed project in South Korea, where a comprehensive trial bed covering various technologies of the smart grid was addressed. Japan followed suit with the four smart community test bed projects bringing together different technologies in the palette; however, this failed to replicate in the rest of the region. In Southeast Asia, which is in the early stages of smart meter and demand response trials funding limitations, aged grid infrastructure, and varied grid operators’ priorities detain projects incorporating smart technologies into the grid.

Southeast Asia: The Smart Grid Umbrella Opens

During the past few years several projects started mushrooming around the Southeast Asia as well. Currently, the utilities are testing and installing smart-meters, demand response (DR), and battery storage in the region

Singapore started the Smart meter projects and has completed 1.2 million meters by 2016. Electricity Market Authority (EMA) has started the ‘Optiwatt’ project to test the feasibility of demand response in the country. Singapore has a significant reserve capacity and electricity price fluctuations are not significant, which is stalling pace of DR growth in the nation. The current DR of 7.2 MW is expected to remain stagnant till 2020. The Smart Grid City Project specializes in distribution grid analytics and condition monitoring and tests opportunities for and effectiveness of dynamic optimization and energy management for smart grid. Singapore aims for widespread adoption of this model by 2020.

Metropolitan Electricity Authority (Thailand) is developing a Smart grid plan incorporating all relevant technologies under the ‘umbrella’, while Provincial Electricity Authority has started the smart meter trials and substation automation in Pattaya city. The smart-meter installation in the country is projected to grow to 1.3 million by 2024.

Meralco, the largest distribution utility in the Philippines, has embarked on a smart meter installation and Advanced Distribution Management Systems project as part of its long-term smart grid plan. Meralco aims to complete 3.3 million meters by 2024.Through this mission, Meralco aims to integrate ‘smart intelligence’ into its distribution network to better manage the electricity consumption.

Highest Investments in Smart-meter projects

The past year witnessed installation of 17.5 million smart electricity meters in the Asia-Pacific region (excluding China). Japan, South Korea, and India were the hotspots. Japan and South Korea have rigorous plans for smart-meter installations; 4 utilities in Japan aim to complete 27 million meters by 2024, and KEPCO in South Korea aims for 26 million smart meters by 2020.

The ‘smartness’ of meters varies across the region; for instance in India low specification meters with mobile-read communications are referred as ‘smart’. In Southeast Asia, 360,000 meters were installed during 2017, and are likely to double by 2020. Singapore, Thailand, and Malaysia will be the key investment areas during this period.

In Australia, post Victoria rollout of 3 million smart meters, other states have not been enthusiastic to follow course. Australia and New Zealand (ANZ) is expected to average half a million meter installations every year during 2018-2025.

DR: Strives with Regulatory Support & Incentives

DR is still in testing stages in Japan, Singapore, and ANZ. DR enables improvement of system efficiency, renewable energy integration, and achievement of national emission targets. South Korea conceived the idea 20 years back and has been practicing it for reducing peak demand in summer and winter. Since 2014, commercial and industrial customers have been selling DR in the electricity market. South Korea achieved 3 GW of demand response in 2017, highest in the region. The South Korean utilities KEPCO and Korea Power Exchange have DR plans supported by time of use and variable tariff structures. Besides, the Korean grids have already signed Open ADR Standards to help manage demand and supply gap.

Last year, Asia-Pacific region recorded 4.9 GW (excluding India & China) of DR, majority of which was emergency DR through capacity bidding. The utilities in Australia and Japan are in the process of integrating DR in ancillary services market. With such developments and regulatory push, the DR market is likely to grow four-fold to become 20 GW by 2021.

The Australian Electricity Market Operator (AEMO) and Australian renewable Energy Agency (ARENA) came together for a DR research program covering C&I and residential customers to study the feasibility of the technology for the country. Currently Australia does not allow private companies to participate as aggregators. Meanwhile in Japan, Comverge and Enernoc have acquired a small share of DR as aggregators, where 90% of the share is taken up by the four electric companies who have initiated the DR programs. Rollout of smart meters in Commercial & Industrial sector and favorable government regulations are driving the growth in the nation. While the benefits of DR are encouraging, lack of investment funds, data privacy & security issues and inadequate policy support hinder the growth of DR in the region.

Battery Storage: Attractive but an Expensive Option to Improve Grid Resilience

Most countries in Asia-Pacific are prone to natural disasters such as cyclones and tropical storms. As a result, the central grid has undergone several damages. It has therefore become necessary to improve the resilience of the grid. To overcome the challenges posed by an aging grid, many communities have started deploying microgrids backed by battery storage support. Besides, national RE targets and intermittency of RE power are the key demand factor for grid-level battery storage in APAC. China, Japan, South Korea, and Australia have eagerly embraced the technology and currently accounts for 0.5 GW installed capacity.

Pushed by regulations and falling battery prices, the installation capacity is expected to cross 1.8 GW by 2020. Lithium-ion and sodium sulphur chemistries are most suited for grid applications, and lithium-ion‘s market share was 73% in 2017. The Japanese Government has been providing subsidies to two leading battery manufacturers of Sodium Sulphur and flow batteries to enable them to lower the cost of their battery products to attain cost parity with hydroelectric plants at the rate of $230–$240/kW.

In China, the Energy Technology Revolution Action Plan (2016–2030) focuses on battery storage, and set targets to demonstrate and extend the 100 MW level each for redox battery, sodium-sulfur cell, and lithium-ion battery storage systems by 2020.

South Korea has over 13 operational battery storage plants and the Government promotes battery integrated RE projects in the nation, which has an RE target of 7% in the energy mix by 2020. While in Australia, strong financial backing by ARENA and the Clean Energy Finance Corporation (CEFC), utility scale battery storage projects have received a major push since 2011.

Some of these leading nations have extended support to countries such as India and Vietnam to promote the battery storage technology in the developing markets. A Japan-India task-force has been created to deploy battery storage systems in power systems in India and formulate policies for large scale deployment in the country. Recently, Vietnam announced collaboration with the Republic of Korea to receive technological support in battery storage and RE related projects in the country.

Despite such supports extended, the high CAPEX, lack of awareness, and the absence of strong policies in the developing nations will continue to delay the onset of battery storage projects in the Southeast Asia region.

Several battery manufacturing giants emerge from the region- namely Samsung SDI, BYD, NGK Insulators, and Redfow. The battery storage market is expected to become highly competitive, resulting in partnerships between system integrators and battery OEMs. System integrators are expected to have a strong command in utility-scale projects. Besides, utility customers vision of a battery with life up to 10 years have to be met by the OEMs, which is a major challenge for them


Rising demand for electricity has been the major challenge faced by utilities in the Asia-Pacific region. This has brought in the smart grid technologies to the spotlight. The smart grid market has had an encouraging start with the deregulation of the Japan electricity market, deployment of smart meters in South Korea, Japan, and Australia, introduction of demand response in the region and battery storage projects across the region. In the next five years, the shortfalls hindering market growth are expected to be actively addressed by the utilities and regulatory bodies, which could have a massive impact in the smart grid market’s growth in the region.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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