Market Insight

Gas meter growth moves from EMEA to APAC in long term

January 29, 2019

Leena Tawate Deshpande Leena Tawate Deshpande Senior Analyst, Smart Utilities Infrastructure
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Global gas meter shipments topped 50 million units for the first time in 2017, with revenues of over $2.6 billion.  Communicating meters accounted for more than 1 in 4 meters shipped as the market increasingly moves toward smart technology, driven most by rollouts in Asia Pacific and Europe, Middle East and Africa (EMEA).

More than 420 million gas meters will ship across 2018-2024 worldwide with an increasing proportion of communicating meters, according to the new IHS Markit Gas Meters Report.  Whilst there is significant fluctuation in market size year-to-year, this is due to the project-driven nature of the market and the long-term trends are typically much more stable.

For communicating meters, the growth is driven by a number of national rollouts which are expected to peak in the period 2020-2022.  For example, shipments in Benelux, France, Italy and the UK will all peak in the medium-term future, meaning a global peak as EMEA hits full speed for smart rollouts before long-term replacement cycles start to drive the market.

Meanwhile, growth in Asia Pacific continues to ramp up and shipments across China, Japan and South Korea start to drive global growth just as the EMEA peak occurs.

Vendor Strategies for Growth

Vendors operating in mature markets such as North America will increasingly start to diversify their offerings ‘beyond the meter’ with the development of managed software and services, in order to assist utilities digitalize their gas networks as part of their technology roadmap.  Whilst adoption is slower here than for electricity or water meters, the move from hardware to solutions is a universal trend.

For unit shipment growth, vendors are now looking to new countries for both communicating and basic meter opportunities.  The market for basic gas meters will remain strong and grow at a small but steady pace across the forecast period. Prepay meters will gain favor in some regions as they try to combat the issues of revenue collection, for example in sub-regions such as Russia, Africa and Central and Eastern Europe.

Meanwhile, Chinese vendors continue to benefit from the coal-to-gas national policy and the 13th five year plan within China. As part of a new initiative to increase export business, many Chinese manufacturers are now gaining some traction outside of China, for example within Asia Pacific and Latin America.

Cellular IoT communication will overtake Traditional Cellular by 2022

As the utilities worldwide invest to upgrade their networks and infrastructure, decisions will increasingly be driven by the Total Cost of Ownership (read more here). Historically, traditional cellular technology has been used most often for communicating gas meters, in particular suiting rural/low meter-density areas. The network complexity is low, but the GPRS modem transmitting meter readings at high power levels reduces battery lifetime for the meter, thus adding to the solution cost.

Many emerging technologies such as Cellular IoT (including NB-IoT) and LPWA (including Lora WAN) largely remain in pilot projects for gas meters, and most major rollouts will be delayed until at least 2020. However, the Ministry of Industry and Information Technology in China and has made moves to promote NB-IoT (4G LPWA) technologies in the short and long term, which will drive growth at a global level.

In EMEA and North America, multiple technologies will continue to co-exist to match differing demands from gas utilities.  For example, Fixed Network – Point to Multipoint gains increasing market share of the communicating meter market across the forecast.

 

This insight is from the IHS Markit Smart Utilities team, with data citations from the latest publication on the global gas meters market. IHS Markit produces global data for the entire smart metering market in our Smart Utility Meter Intelligence Service.

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Power & Energy Technology
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