The smartgrid market - France (2024)

1.2 The global smartgrid market: overview and main characteristics

The global Smart Grid market is booming, with average growth estimated at nearly **% per year, according to [***].

In ****, the market is valued at $** billion, and is likely to exceed $*** billion by ****, driven by growing demand from governments seeking solutions to optimize their power grids.

Sales forecast for the Smart Grid sector

World, ****-****

Source: ****

1.3 The European market: uneven deployment of smart meters

Source: ****

In its **** report on smart grid projects (***), the Joint Research Centre showed the highly heterogeneous nature of smart meter deployment in member states. at that time, onlyItaly and Sweden had already finalized the installation of new-generation meters on their territories. The other Member States were in a particularly heterogeneous state of progress: some, such asGermany, Slovakia and Latvia, had only decided on partial deployment of smart meters due to a negative cost/benefit analysis. Others had still not made their official position on smart meters public - this was the case of Poland or Hungary despite a positive cost/benefit analysis. But the majority of member states have accepted the widespread deployment of new-generation meters on their territories - a rollout that is gradually taking place in France, the UK, Austria and the Netherlands...

With regard to the deployment of smart meters for natural gas, only five member states had decided to introduce smart meters by ****, or even earlier:Ireland,Italy, Luxembourg, the Netherlands and the United Kingdom. They have since been joined by France, which has just begun the trial phase for Gazpar, the new-generation meter for natural gas. In ** member states, the cost/benefit analysis was negative.

Source: ...

1.4 Domestic market

Smartgrid market size France, ****, € million Source: ****

The smartgrid market was worth €*.* billion in ****. In its **** study, EY estimates that the smart grids market will be worth around €* billion by ****, at a CAGR of +**%. This significant growth would result from a major shift in the energy landscape, from centralized generation and unidirectional distribution to a more flexible, intelligent system. This new paradigm would include a mix of centralized and local generation, smart grids capable of integrating renewable energies, two-way energy distribution and the emergence of active consumers involved in practices such as self-consumption and electric vehicles.

Prospective scenario for smart grid use cases France, ****, in Source: ****

Electric mobility represents the most dominant use case, with **% of applications, closely followed by theintegration of renewable energies (***) at **% and storage at **%. These three areas account for around **% of the estimated investment of nearly * billion euros by ****. More specifically, electric mobility should receive around *.* billion euros of investment, attributable to the expected expansion of the electric vehicle fleet and the high penetration of smart charging stations.

Theintegration and control of renewable energies will benefit from an investment of *.* billion euros, due in particular to the increase in wind and photovoltaic production capacity.

Finally, storage, essential for ...

2.1 The popularity of electric mobility

Smartgrids and electric vehicles

The V*G (***) concept is in line with the development of smart grids. Its principle is based on the optimal use of the electricity stored in the batteries of electric vehicles, thanks to bi-directional terminals capable of both recharging these batteries and recovering their energy when necessary to supply the local grid. since electric vehicles are generally stationary around **% of the time, V*G uses them as a potential energy source during these extended periods of inactivity. Installing a V*G charging station not only recharges the electric vehicle, but also uses the energy stored in its battery to meet the energy needs of the company or the local power grid. This represents a resolutely smart-grid approach. Therefore, to understand part of the demand for smart grids, it is crucial to consider the demand for electric vehicles[***].

Demand trends

trend in the number of electric cars sold in France France, **** - ****, in thousands of vehicles Source: ****

Despite a slow start due to factors such as high cost, lack of recharging infrastructure and limited public understanding, the number of electric véhicles registered in France rose sharply in the course of ****, despite the pandemic, the economic crisis and ...

2.2 Demand for smart cities: urban infrastructure needs

Demand trends for smart buildings

As in many other areas of use, changes in European and French environmental legislation and various CSR reporting obligations are "forcing the hand" of players involved in the real estate market.s in the real estate market, making the option of smartgrids a viable means of complying with them while ensuring better optimization of processes, given the high initial investment.

In ****, France adopted an innovative extra-financial reporting scheme, provided for in Article ***-VI of the French law on energy transition for green growth. This law aims to increase investor transparency regarding the integration of ESG (***) criteria into their investment strategies, particularly with regard to climate risks and contribution to the energy transition. In June ****, the Ministries of Ecological Transition and Economy, along with the AMF and ACPR, announced the publication of a review of the application of these provisions [***]. Directive ****/**/EU, also known as the Non-Financial Reporting Directive (***), was adopted on October **, **** with the aim of"enhancing the transparency of social and environmental information" provided by companies in all sectors within the European Union. This directive amends Directive ****/**/EU on the publication of non-financial and diversity information by certain large companies and groups. It was transposed ...

2.3 The smart grid in production facilities and housing: the rise of the smart house and smart factory

Demand trends in home automation

While not representing the entire home automation sector, smart grids play a major role in the smart home model, particularly with connected home automation devices that enable users to control the energy consumption of their appliances.

Poll: Do you own any home automation-related connected objects? France, ****, in Source: ****

In ****, **% of those surveyed will own at least one connected object in their home, compared to **% in ****. Ownership of, and interest in, connected objects is higher among men, with **% already owning one and **% planning to use one, compared to women, where the figures are **% and **% respectively. This disparity reflects a wider issue of gender disparity in the adoption of new technologies, where access to and use of digital tools is often encouraged differently by gender from childhood onwards. The most significant gaps in ownership of connected objects are found among young people, where **% of teenage girls aged ** to ** own one, while this figure rises to **% among teenagers in the same age group.

Trend in the number of housing construction sites France, ****, in units Source: ****

On the other hand, the popularity of home automation and the potential for demand in this segment are in stark contrast to the current ...

2.4 The evolution of electricity networks: price and consumption requirements

Smart grids also aim to optimize the operation of power grids by deploying intelligent infrastructures such as substations, advanced meters, sensors and even actuators. These technologies provide grid operators with real-time data on the status of networks, enabling them to monitor and control them remotely. This translates into improved quality of service for end-users[***].

Meeting energy consumption needs

Evolution of France's energy independence France, ****, in Source: ****

At the end of ****, the Service des Données et Études Statistiques (***) of the French Ministry of Energy Transition published its report on the energy balance for ****. That year, the energy trade balance showed a deficit of *** billion euros, mainly due to massive imports of fossil fuels such as oil, essential in the high-carbon transport sector. In addition, for the first time since ****, France became a net importer of electricity in ****, as analyzed in anAMORCE article published in January ****[***].

In addition, technological advances are creating more and more new connected devices, and in recent years we have seen the emergence of new uses. As a result, the power grid must be able to support and transport enough energy to meet these new needs. Smart Grids help to reduce energy losses and optimize settings for smart ...

2.5 Growing needs in terms of storage and integration of renewable energies

Smartgrids and their role in the storage and integration of renewable energies

The storage issue

Electricity storage, while crucial to the deployment of renewable energies, remains a major challenge. Current solutions, such as pumped storage stations and domestic batteries, are limited and have significant shortcomings. Pumped-storage power stations(***) store electricity in the form of water in hydraulic dams, but their future development is limited. Domestic water heaters can also store hot water produced at night for later use, but their operation needs to evolve with the development of renewable energies, such as photovoltaics. In addition, batteries are available on the market for electricity storage, but improving them remains a major industrial challenge, particularly in terms of energy density[***].

Smart grids offer greater flexibility to the power system, thanks to technologies such as FACTS, static compensators and capacitors. These innovations enable energy to be transferred more efficiently over existing lines, improving grid stability and resilience to fluctuations. The development of storage offers considerable potential for mitigating the intermittency of renewable energies by regulating their production through buffer storage systems, thus enabling more regular injection into the grid. Renewable energy storage can also avoid the need for CO*-emitting power plants at times ...

2.6 The growing popularity of self-consumption, which, facilitated by smart grids, provides an answer to the problems of RE storage

Self-consumption means generating electricity locally, generally from renewable sources such as solar photovoltaics, and consuming it on site without necessarily feeding it back into the grid.

The link with smart grids lies in the fact that smart grids facilitate and maximizeself-consumption. By integrating advanced metering, real-time monitoring and remote control functionalities, smart grids can help users to better manage their energy production and consumption.their local electricity production and consumption, in particular by automatically adjusting the load of appliances according to energy availability and needs.

In this way, smart grids promote the growth ofself-consumption by making the process more efficient, flexible and cost-effective, contributing to a more sustainable and responsible use of energy.

Number of self-consumption photovoltaic installations France, ****, in units Source: ****

at the end of the fourth quarter, France counted ***,*** individual photovoltaic self-consumers, marking a significant growth of **% compared to December ****, according to data from the Observatoire français de la Transition Écologique published by Enedis. This trend is clearly accelerating.

In terms of installed capacity, individual self-consumption installations rose by **% year-on-year, reaching *,*** MW at the end of December, compared with *,*** MW at December **, ****, and *** MW at June **, ****. **% of photovoltaic installations are dedicated to individual self-consumption, of which *% are coupled ...

3.1 Value chain

The value chain below represents a simplified version of the smartgrid flowchart. Only the main installations/projects employing smartgrids are shown, given the broad scope of the technology's application

TSO: Transmission System Operator (***)

DSO: Distribution network operator (***)

Smartgrid market value by segment France, ****/****, in millions of euros Source: ****

Between **** and ****, the smart grids market in France is expected to grow significantly, with an estimated value of *,*** million euros in ****. Power generation would emerge as the most dynamic segment, rising from *** million euros in **** to *,*** million euros in ****. Distribution (***) and consumption are also expected to show significant growth, illustrating the growing importance of smart grids in the power grid as a whole. By contrast, the transmission segment is expected to remain relatively stable.

Number of jobs in the smartgrid market France, ****/**** Source: ****

There would be **,*** employees across the entire smartgrid value chain in France in ****. In ****, in France, Think Smartgrids, identified around *** demonstrators deploying smart grids on an industrial scale[***].

3.2 Production

The smart grids market in the generation segment is experiencing significant growth, mainly due to the national energy policy favoring the development of renewable energies (***). The challenges associated with the intermittency and predictability of renewable energy production are increasing demand for flexibility solutions, particularly storage. The industry estimates that around * GW of flexibility is required for every * GW of installed RE. As a result, demand for intelligent solutions such as predictive tools, energy management systems and smart connection offers is set to grow considerably. The generation segment is thus expected to reach around *.* billion euros in ****, compared to around *** million euros in ****, with a CAGR of around +**% per year [***].

Breakdown of generation segment (***) France, ****, in Source: ****

Prospective scenario for the breakdown of the generation segment (***) France, ****, in Source: ****

Integration and control of renewable energies

Smart grids guarantee the security and reliability of electricity networks, while integrating renewable energies (***). They enable reactive management of energy flows, thanks to technologies such as smart meters and sensors. In the event of overload, automatic controllers redistribute loads. Solutions such as demand-side management and energy storage are also being explored to balance supply and demand. In addition, smart grids promote theinterconnection of cross-border networks, smoothing out ...

3.3 Transport

As France's sole transmission system operator,RTE's transmission segment projections are based on future investments. These investments are aimed at the ongoing digitization, development and standardization of **-hour control rooms, local PLCs, advanced IT and analytical technologies (***) and telecommunications networks. These investments are expected to reach nearly *** million euros by ****, compared with around *** million euros today, with an average annual growth rate of around +*% per year [***].

3.4 Distribution

As France's main electricity distribution network operator,Enedis covers **% of the country. Growth projections for the Distribution segment are therefore based on data provided by Enedis. In ****, distribution will represent the main segment of the smart grids market (***), as well as investments in information systems linked to smart grids, should stimulate growth in the segment at a rate of around +*% per year between now and **** [***].

Distribution segment breakdown (***) France, ****, in Source: ****

Prospective scenario for distribution segment breakdown (***) France, ****, in Source: ****

Demand management - Linky

The Linky advanced electricity meter is the communication interface between the electricity grid and the consumer's installation. A concentrator, installed in an electrical distribution substation, collects all the information from the advanced meters via power line carrier current (***) and communicates them to the distribution network operator. The network operator's IT system can be accessed by energy suppliers, who regularly receive their customers' metering data for energy billing purposes. The benefits of Linky for consumers and network operators are numerous, including remote meter reading, fewer power cuts, remote fault detection, and billing based on actual consumption[***].

Communication system models

Smart grids can be considered in two complementary ways: centralized and decentralized. In the centralized approach, smart grids are ...

3.5 Consumption

Growth in the Consumption segment from **** to **** is mainly driven by the development of the"Electric Mobility" use case, which is expected to reach *.* billion euros in ****, compared with around ** million euros in ****. This increase is due to the expected strong growth in electric vehicle fleets and the penetration of smart charging stations. With a projected * million electric vehicles by ****, it is essential to develop recharging infrastructures, including smart charging stations such as V*G or V*X (***), which serve as a means of storing and supplying electricity at residential or local level. The inflection point for V*G charging stations is scheduled for ****, with French and German manufacturers developing the European charging standard. It is estimated that **% of charging stations will be intelligent by **** .

At the same time, regulatory obligations to reduce energy consumption in the commercial and residential sectors are expected to accelerate the adoption of smart technologies, such as sensors, PLCs and meters, in Smart Home, Smart Building and Smart Factory use cases. Average annual growth is expected to exceed **% to **% over the **** decade, with an estimated value of around *** million euros in ****, up from *** million euros in ****[***].

Breakdown of consumption segment (***) France, ****, in Source: ****

Prospective scenario for ...

4.1 Typology of smartgrid offerings in France

Also present on the market are innovative smartgrid consulting and solutions companies such as Atos WorldGrid and SmartGrid Energy (***), some of which are actively investing in smartgrid projects.some are actively investing in smartgrid equipment construction projects, such as the JBox project led by NW Joules in collaboration with Enedis, RTE and SmartGrid Energy, which has seen the construction of *** smart substations across France[***].

Generally speaking, RTE, the transmission operator, and Enedis, the distribution operator, are very often involved in smartgrid-related projects, since they use their networks. It is not uncommon to see private-sector players, from start-ups to large corporations, investing in and participating in various local projects to install smart grid structures, such as the project to install an RTE terminal in Picardie, supported by General Electric, Schneider Electric, Alstom, Neelogy (***) and Enedis, and financed by the French government and Ademe[***].

4.2 The installation of smart gas & electricity meters: an important step in the smart meter offering

Linky meter installation schedule

Linky meter installation schedule France, ****-****, in millions of units Source: ****

In the case of Linky meters, the customer is not the homeowner, but the municipality, which pays for their installation (***).

Electricity meter operators such as Enedis (***) are mandated by the authorities to manage, maintain and replace electricity meters. Enedis is thus legally responsible for the deployment of electricity meters, such as the Linky meter, following a legislative decision making its installation mandatory. Theoretically, refusing to install the Linky meter is out of the question because of this legal obligation.

However, as of December ****, Enedis had not yet installed the Linky meter in around *.* million households (***). Installation of the Linky meter continues free of charge. Since ****, when the installation campaign ended, the demand has been transformed into a pure demand for replacement, which, given the estimated lifespan of the meters, will not take place for another fifteen years[***].

Current status of Gazpar meter installation

Gazpar meter installation schedule France, ****-****, in millions of units Source: ****

The Gazpar meter rollout project was initiated in ****, starting with a pilot phase in ** towns and * French regions, during which ***,*** meters were installed. Official rollout began in May ****, with over ***,*** new meters ...

4.3 The current V2G offering

The Vehicle-To-Grid, or V*G, makes it possible to use electric vehicles as a means of storing energy and re-injecting electricity into the site for various services when they are not in use.

Electricity is stored in the vehicles' batteries when it is cheap and low in carbon, for example when there is too much wind generation at night. It is then re-injected into the building during peak consumption periods, when electricity is expensive and carbon-intensive, thus avoiding the use of CO₂-emitting thermal power plants.

Comparison of V*G-compatible electric car offers (***)

Source: ****

V*G electric charging stations

Dreev, a joint venture subsidiary of EDF and the Nuvve Group, is the only manufacturer of self-service V*G electric car charging stations in France. In ****, DREEV launched bidirectional charging (***) and now offers a smart charging solution. This solution, which aims to reduce electricity bills by optimizing vehicle charging when electricity is abundant and inexpensive, has a capacity of almost *** MW as of January *, ****. This makes DREEV a key player in smart charging in France, aiming to manage over* GW of flexibility by ****. This solution adjusts vehicle charging according to electricity market prices and drivers' mobility needs, while respecting their operational constraints ...

4.4 Microgrid and smart substation solutions

Microgrid equipment

A microgrid is an autonomous electrical system that enables electricity to be generated and used on site, offering sustainability and resilience. It integrates energy resources such as renewable energies and diesel generators, with the possibility of storing electricity in batteries. These microgrids benefit a variety of entities, from municipalities to military bases, by offering energy cost management, increased sustainability and enhanced reliability. The Energy as a Service(***) model eliminates upfront costs, providing easier access to this technology[***].

Intelligent substations

The JBox® represents a unique French innovation manufactured by NW Joules resulting from multidisciplinary expertise, opening up new perspectives for battery storage and contributing to the growth of renewable energies in the energy mix.

Thanks to its compact size, the JBox® can be easily integrated into the landscape without requiring large areas of land.

The JBox® is a prefabricated substation comprising three main elements:

A device for direct connection to the public electricity grid. An aggregation of lithium-ion batteries. An intelligent system that constantly monitors the needs of the primary reserve, enabling intelligent management of electricity injection and withdrawal according to demand[***].

5.1 Regulatory framework

The Commission de Régulation de l'Énergie (***), in partnership with RTE, quickly put in place a regulatory framework conducive to the integration of load shedding into the power grid. As early as ****, the balancing mechanism, essential for balancing the power system, was opened up to load shedding.

Recognition of load shedding

Law n°****-*** of August *, **** on the public electricity and gas service and on electricity and gas companies gave legal recognition to industrial load shedding, which was mainly designed to formalize offers from large industrial consumers directly connected to the transmission network.

Law n°****-**** of December *, ****, also known as the "NOME" law, recognized the importance of diffuse load shedding for balancing the transmission network and ensuring security of electricity supply. This law authorized RTE to enter into "power reservation contracts" with certain consumers through load shedding operators, when their load shedding capacities help to reinforce the reliability of the power system, particularly during periods of high demand. In addition, Article * of the NOME law temporarily introduced a specific call for tenders for load shedding, managed by RTE.

Subsequently, this regulatory framework was consolidated and enriched by the adoption of Law n°****-*** of April **, ****, known as the "Brottes" ...

6.1 Positioning the players

• ABB Robotics
• Enedis
• Schneider Electric
• Stellantis (Groupe PSA et Fiat)
• Renault Groupe
• Nissan
• NW Joules
• Nidec ASI
• TE Connectivity
• TDK Electronics
• Le Comptoir du Visage