Two reports publicized in the past week put some big dollar figures on the growth potential of so-called smart grid technology, which allows utilities to more efficiently manage power distribution.

According to a new market research report published by the analysts at MarketsandMarkets, the smart grid technology industry is expected to expand at a 28.7% compounded annual growth rate and reach more than $80.6 billion by 2016.

A report by Pike Research — part of Navigant — announced in a press release last week says the market for smart grid technologies will total $494 billion in cumulative revenue from 2012 to 2020.

While an estimated 832 million smart meters have already been deployed, says Pike, this suggests many utilities have yet to sign onto the program.

While the ability of a utility and end users to communicate via a bidirectional network provides the smart grid with one of its major advantages, MarketsandMarkets says the technology is more than just installing smart meters. Utilities are also able to control the entire energy network thus generating an energy-efficient grid, it says.

Pike senior research analyst Bob Lockhart was quoted in the press release as saying, “The overlay of modern smart grid technologies onto existing grids promises numerous benefits to utilities, including increased reliability and capacity, reduced energy losses, and deferring or eliminating the need for new generation resources.”

MarketsandMarkets says countries like Australia, the United Kingdom, France, Italy, and the U.S. have the greatest potential for expanding the industry with communication networks having high growth possibilities. 

Pike Research believes vendors of smart grid technologies targeting transmission upgrades, automation of substations and distribution, smart grid IT, and smart meters will experience the strongest growth.

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The article Report: Smart Grid Market to Reach $80 Billion by 2016 originally appeared on Fool.com.

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