SAUDI ARABIA SMART GRID MARKET

Saudi Arabia smart grid market size reached USD 810.0 billion in 2024 and is estimated to reach USD 2,019.9 billion in 2032 and the market is estimated to grow at a very high CAGR of 12.1% from 2025-2032 fueled by rapid modernization and industrialization along with rising environmental concerns and government initiatives to support renewable energy.

Major Market Drivers and Emerging Trends

A smart grid is an advanced electrical system which monitors power flow from generation to usage which integrates communication and IT technologies. Smart grids can be achieved by installing operational systems and consumer integration along with efficient transmission and distribution networks. This provides technicians and managers with the ability to measure power flows in real time which enables them to take appropriate actions to adjust or minimize the load during any losses.

Electricity consumption is steadily growing with rapid population growth. In Saudi Arabia electricity consumption reached 10.459 MWh per capita in 2022. Electrification of major sectors particularly transportation and decarbonizing electricity generation are essential for achieving transition to clean energy. Smart grid technologies are deployed to manage growing demand which reduces energy losses and optimizes power distribution. By 2025 the Saudi Electricity Company plans to install ten million smart meters to improve billing precision and energy monitoring which ultimately empowers consumers to participate more actively in energy efficiency efforts.

Other factors driving the Saudi Arabia smart grid market size are rapid modernization and increasing environmental concerns. With a focus on renewable energy to minimize carbon emissions and improve energy efficiency the government is accelerating the smart grid industry growth. Rapid industrialization is driving the need to upgrade the current grid network to accommodate the rising demand. The smart grid offers technology to track power consumption which helps improve revenue collection by making it easier to detect electricity theft. The smart grid market is also growing with these technologies which improve power stations along with the entire energy infrastructure.

The government has also introduced extensive regulations to support the smart grid deployment. These regulations focus on modernizing the power infrastructure and improving efficiency while incorporating renewable energy sources. The government has established clear policies to accelerate smart grid adoption which focuses on advance metering infrastructure along with demand response programs. Saudi Vision also highlights the smart grid adoption with NEOM contributing USD 100 billion to expand the power output capacity to reach 3.45 GW.

Smart grids make it easier to incorporate renewable energy sources including wind and solar into the power system. With Saudi Arabia aiming to produce 50% of electricity from renewable energy smart grids are vital to handle their variability and maintain grid stability. The government is undertaking several initiatives to integrate renewable energy resources and make significant investments in enhancing grid networks. Launched by the SANEDI the smart grid initiative focuses on upgrading and expanding the grid network to meet increasing energy demand. Improving outdated grid networks through these initiatives is significantly contributing to the rising demand for smart grids in Saudi Arabia.

The government regulations also prioritize grid stability and maintaining interoperability standards. Supportive regulatory measures and proactive approach have been instrumental in advancing smart grid deployment in Saudi Arabia. CESI partnered with the ECRA to develop smart grid strategy which analyzes technical factors while addressing the unique challenges faced by the electricity industry. The combined effort resulted in pinpointing the best approaches and strategies for integrating smart meters while improving the grid infrastructure.

The shift towards automation and digitalization is also transforming the Saudi Arabia smart grid market. Digitalization includes adopting technologies like smart meters and sensors to improve the power grid functionality. Automation improves grid performance by allowing real time data gathering and responsive actions. The need for more effective grid operations and the increasing complexity within the energy systems are further driving digitalization growth. Energy providers are making greater investments in these technologies to upgrade their infrastructure and integrate new energy sources.

Even though the shift to smart grids brings many advantages but there are also challenges to overcome. Significant implementation costs along with a demand for skilled labor and concerns about cybersecurity are major challenges. Installing smart grid infrastructure demands considerable capital investment in software and hardware. High initial costs associated with the transition to smart networks could prevent small utilities from fully adopting the technology.

Smart grid networks are also vulnerable to cyber threats driven by their dependence on digital communication along with data transmission. Cyberattacks like jamming or injection attacks are prevalent and pose major threats to system security. Tackling these challenges needs a greater emphasis on adopting strong cybersecurity strategies like threat detection. Energy companies are prioritizing investments in cybersecurity to secure their infrastructure while maintaining grid operational integrity.

Based on component, the smart grid distribution management segment which is a software category subsegment is gaining popularity due to the increasing need for reliable and uninterrupted electricity supply. The system incorporates SCADA which facilitates power flow monitoring at any given point. This also enables real time management and energy distribution optimization. These factors are helping to accelerate the software segment growth in the market.

By end user, the commercial segment is growing. Owing to the large electricity usage in the commercial sector it is vital to constantly monitor and manage power flow to prevent hazardous incidents. The growing demand for complete electrification and a dependable power supply is driving the segment growth.

Top Market Players

Prominent companies in the market are ABB, General Electric, Saudi Electricity Company SJSC, Honeywell International along with others.

Key Developments: 

• • In 2023, the energy utility firm headquartered in Saudi Arabia ENOWA announced a high voltage smart grid project for NEOM.
  • In 2023 the Indian government and Saudi Arabia have formalized an MoU to create an undersea link connecting their national grids.
  • In 2020 Hitachi acquired ABB Power Grids to address the renewable and distributed energy challenges in the power sector. This decision was made to prioritize electric transportation and digital solutions along with industrial automation.
  • In 2020, ABB Power Grids was acquired by Hitachi to tackle distributed and renewable energy frontiers in the power industry. This done to mainly focus on electric transportation, digital solutions, and industrial automation.
  • In 2019, Schneider Electric announced their new product EcoStruxure DERMS, which introduces its distribution energy resource management system (DERMS) for grid power management. It will help to monitor and control grid systems.
  • In 2018, General Electric announced their plans for Smart Grid Bed Test to merge smart grid technology on a scale that is never attempted before. This project focuses on decarbonizing the grid by partnering with customer for a clean energy future.

Segments covered in the Report:

The Saudi Arabia Smart Grid Market has been segmented on the basis of Component and End-User. Based on Component, the market is segmented into Software, Hardware, and Service. The Software segment is further segmented into Advanced Metering Infrastructure, Smart Grid Distribution Management, Smart Grid Network Management, Grid Asset Management, Substation Automation, Smart Grid Security, and Billing and Customer Information System. The Service segment is further segmented into Consulting, Deployment and Integration and Support and Maintenance. Based on End-User, the market is segmented into Residential, Commercial, and Industrial.

Market Segmentation

Saudi Arabia Smart Grid Market by Component

• • Software
    • Advanced Metering Infrastructure
    • Smart Grid Distribution Management
    • Smart Grid Network Management
    • Grid Asset Management
    • Substation Automation
    • Smart Grid Security
    • Billing and Customer Information System
  • Hardware
  • Service
    • Consulting
    • Deployment and Integration
    • Support and Maintenance

Saudi Arabia Smart Grid Market by End-User

• • Residential
  • Commercial
  • Industrial

Saudi Arabia Smart Grid Market Leading players

• • ABB
  • General Electric
  • Saudi Electricity Company SJSC
  • Honeywell International