Led by Brazil, Colombia and Chile, countries in South America will invest $18.1 billion in smart grid infrastructure over the next decade, according to smart infrastructure market intelligence firm Northeast Group.

After several false starts, the South American smart grid infrastructure market will finally be an investment destination in the 2020s, states the firm’s 5th edition of the South America Smart Grid: Market Forecast study

Investment hinges on the global recovery from the COVID-19 pandemic and its economic fallout—a recovery not yet in sight.

Prior to Covid-19, promising signs were emerging throughout the region. Chile and Colombia have been finalising regulations for large-scale smart metering rollouts and several of the largest Brazilian utilities have begun trials in advance of larger deployments in the early 2020s.

These efforts have been in part driven by new entrants to the market. The Italian multinational utility Enel has expanded its already strong presence in the region and recently certified its own smart meter in Brazil.

Local content requirements mean that most international vendors will need local partners in Brazil, but overall the market remains open and competitive.

Multiple Chinese players have also entered the market, buying utilities and local vendors. This should lead to lower-cost metering infrastructure and an improved business case, while also placing greater importance and scrutiny on vendor selection for communications and software.

Chris Testa, research director at Northeast Group, said: “Obviously the global pandemic raises questions about all investments, but the key characteristics of the South American market should remain in place.

“After years of unrealistic promises, South American utilities and regulators have begun to set pragmatic timelines and develop the regulations needed for larger investments. As the market is poised for medium-term growth, the near-term effects of Covid-19 should be limited. At the same time, economic challenges have stalled smart grid progress in South America in the past, so the ongoing response to the pandemic will help determine if large-scale investments move forward.”