Semiconductor opportunities in power grid applications

USA: Given the current urgency of rising energy costs, increased energy consumption, and climate change, it comes as little surprise that both the private and government sectors are increasing activities with regard to the energy grid, the so called electricity network supporting energy generation, transmission, and distribution.

Add to that, digital control for the infrastructure that monitors usage, the market opportunity is growing significantly for system providers as well as the component suppliers.

Energy grids in their current state are considered particularly inefficient, especially in the US, because arguably there are a large number of regulations and cost prohibitive roadblocks that have stalled its development over the last 40 years.

It’s a fact that a whopping 40 percent of all energy produced in the US is lost as heat as it travels over the wires to its final destination, while at the same time ever increasing power outages are costing the US roughly $150 billion annually.

As the demand for energy increases by an estimated 40 percent in the next 20 years according to some sources, it will become increasingly imperative that we recognize these issues and seek to solve them and in economic terms, this spells “opportunity” for electronics suppliers.

The technology industry has already addressed the smart metering segment of the electric power market and it continues to see success as the industry transitions into digital control through meter upgrades and new installations.

Companies such as Texas Instruments, STMicroelectronics, Microchip, and Teridian Semiconductor have been providing SOCs, AFEs, power, and microcontrollers into this growing application area.

Some 120 million smart meters are expected to ship this year, which provides an opportunity of $1.1B for silicon suppliers annually as there is just under $10.00 worth of silicon in each unit. These new meters go a long way in creating a more efficient grid by providing power companies with better data which can be used to regulate pricing during peak usage. They also provide the consumer with energy consumption information on power hungry appliances.

In addition, there is considerable room to improve the grid structure itself. As the new infrastructure build out continues for alternative sources of fuel outside of coal (solar, wind, and water), the grid is being retrofitted with additional systems such as PV arrays, PV inverters, programmable grid controllers, and simulation systems.

In the field, there is significant opportunity for electronics that will retrofit current transformers and switching substations with intelligent control and communications to be used as the infrastructure is decentralized due to the additional power generation coming online from micro-grids.

While the volumes are much lower on these applications, the silicon content is high and the required devices are priced much higher than those found in the AMR application.

Worldwide Semiconductor Revenue Forecast for AMRdatabeans estimates

Source: Databeans