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Canada’s smart grid landscape picks up as the US loses dominance

29 November 2012 – Smart grids are becoming normality in the US, supported by government policies and grants, and neighbouring Canada is also beginning to embrace smart grid technology, according topower expert GlobalData. The US market’s early adoption of smart grid technology contrasts dramatically to Canada’s more cautious approach, but stronger environmental worries are driving Canada to gear up and introduce more electric vehicles.

Smart grids have been growing gradually in the US and Canada over the course of the past few years, but have picked up speed more recently following the introduction of funds provided by the US and Canadian governments. The US introduced the American Reinvestment and Recovery Act (ARRA) in 2009, which allocated US$3.4 billion of federal investments to smart grids. Similarly, the Canadian budget for Research, Development and Demonstration (RD&D) projects in 2009 gave funding of US$795 million under the Clean Energy Fund (CEF) to promote clean energy advancement.

This included various large-scale carbon capture and other medium-sized projects that utilize biomass, geothermal, and renewable technologies, and a smart grid is an essential part of infrastructure supporting this.

In contrast to the US, which will be reaching saturation of smart meter systems by 2014, smart meter deployment in Canada doesn’t follow any set pattern, and is primarily driven by projects initiated by utilities. However, an increasing demand for energy efficiency and grid reliability is leading to development of the demand response market as Canada is poised for its annual demand response capacity to be multiplied nearly 20 times by 2020 compared to 2011 levels. Over the past few years, a number of demand response programs have been introduced to encourage peak load reduction in the country, and these, alongside an extended use of microgrids, will drive the market for demand response in Canada.

Secondly, the growing market for battery electric vehicles (BEVs) is expected to help Canada adapt to smart grid technology. Currently, the BEV market in North America is at the introductory stage, growing at a compound annual growth rate (CAGR) of 29% between 2011 and 2020, but the electric vehicle market in Canada is already very competitive, with a number of vendors fighting for market shares in a market expected to grow at a CAGR of 81% during the same period. Canadian enthusiasm for electric vehicles follows concerns for the environment, and the need to reduce dependency on oil as an energy source.