In the next 10-15 years, the development prospect of China's smart meter industry is bright

China's instrumentation industry has rapidly expanded its market size

In 2011-2016, the scale of the instrumentation industry in China has rapidly expanded. In 2014, the industry's sales revenue exceeded 800 billion yuan, reaching 818.6 billion yuan, a year-on-year increase of 6.6%. In 2016, China's instrumentation industry sales revenue reached 935.5 billion yuan, an increase of 7.5% year-on-year.

Chart 1: Sales revenue and growth of China's instrumentation industry from 2011 to 2017 (Unit: 100 million yuan, %)

Smart meters are the combination of computer science, electronics, digital signal processing, artificial intelligence and other emerging technologies and traditional instrumentation technologies. It can be measured accurately and completely through the fully automated operation process to achieve energy conservation and data reduction. Storage logic determines that energy suppliers can help optimize energy configurations. Taking electricity and natural gas as an example, for every 0.1% increase in accuracy of natural gas metering, it can reduce the loss of 180 million cubic meters of natural gas and bring huge economic benefits. After using a smart meter, the electricity consumption information of each household will be connected in real time. Transmitted to the power company for analysis, the computer system can accurately allocate electricity to each household as needed to avoid wasting energy.

Sensor technology is critical to the quality of smart meters

Sensor technology is critical to the quality of smart meters. Smart meter sensors generally use pulse technology, direct reading technology and other technical routes. Among them, the photoelectric direct-reading sensor is a passive sensor, which can not only directly display relevant energy consumption measurement data but also output signals or data. Compared with traditional pulse technology smart sensors, it has accurate measurement, long service life, valve control function, and installation. Easy, easy to debug, no need to initialize, easy to maintain, short circuit protection and other advantages. Due to historical reasons, pulse sensors are widely used in smart meter sensors in China. With the popularity of direct reading technology, more and more smart meters will use photoelectric direct reading sensors.

In recent years, the domestic sensor market has continued to grow rapidly, with an average annual growth rate of more than 20%. In 2011, the size of China's sensor market was 48 billion yuan; by 2016, the market size of sensors will reach 112.6 billion yuan.

Chart 2: China's sensor market size in 2011-2017 (Unit: 100 million yuan)

From 2011 to 2015, the number of patent applications for sensors in China has been increasing year by year; in 2015, the number of sensor patent applications reached the peak in recent years, being 11883 pieces. In 2016, there were 11653 patent-related patent applications in China; in 2017, there were 6001 sensor-related patent applications in China.

Chart 3: China's sensor-related patent applications for 2011-2017 (Unit: pieces)

Internet of Things is an important technical support for the development of smart meters

The Internet of Things is an important technical support for the development of smart meters, and the Internet of Things itself focuses on expanding its application areas. This can create new markets for the instrumentation industry and create more value, such as energy-saving emission reduction, urban planning, and environmental monitoring. In other fields, smart meters can be used as a source for further improvement.

The domestic Internet of Things industry chain and industrial system have basically taken shape, and the scale of the industry has grown rapidly. At present, technologies and industries such as automatic control, information sensing, and radio frequency identification required for China's development of the Internet of Things have matured or matured. Communication operators and system equipment providers have reached world-class levels, and downstream applications continue to expand. At present, the Internet of Things has been more maturely used in security monitoring, intelligent transportation, smart grid, and smart logistics.

At present, the scale of China's Internet of Things market continues to expand. In 2016, the scale of China's Internet of Things industry reached 930 billion yuan, an increase of 24% year-on-year. It is expected that by 2020, the overall size of China's Internet of Things industry will exceed 1.8 trillion yuan.

Chart 4: Scale and Growth of China's Internet of Things Market, 2011-2017 (Unit: 100 million yuan)

China's smart meter industry has a bright future

The "Accelerating the Development of Sensors and Intelligent Instrumentation Industry Development Action Plan" issued by the Ministry of Industry and Information Technology pointed out that by 2025, the overall level of sensors and intelligent instrumentation industry will enter the world's advanced ranks. The transformation of the domestic industrial pattern from "production-based manufacturing" to "service-based manufacturing" involves sensors and intelligent instrumentation required for national defense and key industry safety, major projects, autonomous manufacturing and autonomous control, and high-end products and service markets. The share increased to more than 50%. It can be seen that in the next 10-15 years, China's smart instrumentation industry will have enormous room for development.

Exhibit 5: Market Forecast of Chinese Smart Meter Industry in 2018-2023 (Unit: 100 million yuan)

It is estimated that the total market size of smart meters, water meters and gas meters in the smart meter industry is expected to exceed 40 billion yuan in 2023. Under the guidance of technology and policies, the smart meter industry has entered the fast lane. What follows will be the release of a huge market space.

(Original title: China's smart instrument industry prospects forecast smart instrument development prospects are broad)