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South American smart grid expenditure will cumulatively reach $49.8 billion by 2023, according to a new study by Northeast Group LLC.

The report says this spending will be allocated across five segments, including advanced metering infrastructure (i.e., smart meters), distribution automation, wide area measurement, home energy management and information technology. The bulk of the spending will be in distribution automation ($23.2 billion), followed closely by smart metering ($19 billion with 80.7 million meters).

Two-thirds of electricity generation in South America comes from renewable hydropower, giving it one of the cleanest power sectors in the world, the report notes. However, there are major problems with electric transmission and distribution infrastructure.

Northeast Group says South America has a distribution loss rate of 15.5% is the highest in the world due to pervasive electricity theft, and power outages are a continuing problem. As a result, an increasing share of electricity infrastructure spending is being allocated to smart grid investments that can help solve the numerous problems plaguing the region.

"South America stands to achieve some of the largest benefits from smart grid infrastructure among all emerging markets," according to Ben Gardner, president of Northeast Group. "When we released our first South America study two years ago, there was a lot of potential but limited activity. Since then, several countries have drafted smart grid roadmaps, launched numerous pilot projects and vendor activity has accelerated across the region.   

"Brazil is the leader, but other countries also have made large strides,” Gardner continues. “Ecuador is aiming for full smart meter deployment by 2017, Colombia and Peru are finalizing roadmaps and Chile is developing smart city pilots. Established smart grid vendors are positioning themselves for this huge potential market, and new players are entering the sector, such as telecom operators eager to expand their machine-to-machine market offerings."



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