The energy transition involves a profound transformation of power systems, including power generation, transmission, distribution, and consumer practices. This transformation is driven by increasing electricity demand and integrating renewable energy sources, introducing variability into power grids. Smart grid technologies are crucial for managing these challenges, enabling grids to become more efficient and resilient while containing operational costs.
Digital technologies, in particular, facilitate the integration of variable renewable energy sources, enhance end-user engagement, and improve energy efficiency. In this context, tracking innovation through patent data provides valuable insights into the technological advancements reshaping power grids. Patent data serve as a proxy for measuring innovation and can reveal competitive strategies in the race to digitalise power systems.
The European Patent Office (EPO) and its PATSTAT database offer a comprehensive resource for tracking patents in smart grid technologies. Recent trends suggest a growing openness to open-source solutions, which may explain a decline in patent applications in some areas. Nonetheless, patent data remains a key tool for understanding the landscape of smart grid innovation.
Trends in Smart Grid Innovation:
This chapter focuses on analysing International Patent Families (IPFs) in the Y04S category of the Cooperative Patent Classifications (CPC), which tracks smart grid-related patents. Between 2000 and 2023, approximately 16,000 IPFs were registered globally in smart grid technologies, accounting for 0.2% of total patents across all technologies and about 5% of patents in the power sector. The peak year for smart grid innovation was 2011 when smart grid patents represented 11% of total power sector patents. Since then, innovation has slowed, with smart grid patents representing 7% of power sector patents by 2021.
The report notes that investment in smart grid technologies needs to double by 2030, from USD 300 billion per year to nearly USD 600 billion annually, to meet the goals of the IEA’s Net Zero by 2050 Scenario. The decline in patent filings in recent years can partly be attributed to unstable grid investments, particularly in developing economies. Nevertheless, provisional data for 2022 suggests a potential recovery in smart grid innovation, which aligns with the broader push for renewable energy deployment.
Trends in IPF Groupings:
Smart grid patents are grouped into three primary categories:
- Systems supporting power generation, transmission, or distribution
- End-user applications
- Complementary innovations for digitalisation
Between 2005 and 2011, there was significant global growth in smart grid innovations across these three categories. End-user applications led in patent filings from 2008 to 2014, but from 2020 to 2021, systems supporting power generation, transmission, or distribution became the dominant category, accounting for 40% of smart grid patents. This shift is attributed to rising capital investments in power equipment during the mid-2010s. Notably, technologies such as “monitoring or controlling equipment for energy generation units” and “systems or methods supporting power network operation” became top contributors, with each accounting for 19% and 22% of smart grid patent registrations, respectively.
Technology Areas of Interest:
Comparing smart grid patents with overall patent trends highlights key areas of interest, such as:
Interoperability systems for electric vehicles: Peaked at 0.15% of all patents in 2011.
Demand-response systems: Peaked at 0.10% of all patents in 2011.
Smart metering and home appliances: Also peaked in 2011 at 0.05%.
Energy storage: This technology area has seen modest growth but still represents only 0.01% of total patents.
The report concludes that while some areas, like smart metering and demand response systems, have seen a decline since their 2011 peaks, other technologies like energy storage continue to grow incrementally.
Geographical Distribution of Smart Grid Innovation:
Innovation is heavily concentrated in East Asia, North America, and Western Europe, with East Asia (mainly Japan and China) accounting for over 50% of global smart grid patents. This trend has been consistent since 2007. North America (primarily the United States) and Western Europe (especially Germany) hold the remaining share. A major shift has occurred over the past two decades, with innovation moving away from Europe and the Americas towards Asia.
Moreover, smart grid innovation is concentrated in a few metropolitan hubs. Tokyo, Seoul, Beijing, and Nagoya are among the leading cities for smart grid patents, while the San Francisco Bay Area and Nuremberg are key hubs in the United States and Germany, respectively. More than 40% of smart grid innovations come from just ten cities globally. Tokyo, in particular, stands out due to the presence of leading companies such as Toshiba, Fujitsu, and Hitachi, while Nuremberg is home to Siemens and other key innovators.
Revealed Technology Advantage (RTA):
The RTA index measures a country’s specialisation in smart grid technologies relative to its overall innovation capacity. Countries with an RTA above 1 are considered specialised in smart grid innovation. Switzerland and Canada have consistently shown strong specialisation, with Switzerland maintaining an RTA of 2.3 since 2001. In recent years, Germany, Korea, and France have also demonstrated increasing specialisation. On the other hand, Japan, the United States, and China, despite being major contributors to smart grid innovation, show lower RTA scores, indicating that these countries do not focus specifically on smart grids within their overall innovation efforts.
Within specific technology categories, Korea has emerged as a key player in systems supporting power generation, transmission, and distribution, while Switzerland leads in complementary innovations supporting digitalisation.
Patent Quality Assessment:
The quality of smart grid patents is assessed using several metrics, including:
Family Size: Indicates the number of jurisdictions in which a patent is protected. In recent years, the average family size of smart grid patents has decreased, reflecting a trend towards protecting patents in fewer markets. However, this trend mirrors the overall power sector. The countries with the largest patent families in 2020 were Japan and China.
Patent Claims: The number of claims in a patent document serves as an indicator of the patent’s market value. Since 2009, there has been a notable increase in patent claims in the smart grid sector. Switzerland leads in this category, with the number of claims doubling from 2010 to 2020.
Originality: Refers to the diversity of knowledge sources cited in a patent. A higher originality score indicates that the patent draws on a wider range of technological fields. The United States has seen a significant rise in originality in recent years, while Austria, Japan, and Germany also score high.
Backward Citations: These measure how many previous patents a given patent references, providing insight into the patent’s depth of innovation. Japan and China led in backward citations in 2020, while “end-user applications” included the highest number of citations.
This article is based on the report “A Global Review of Patent Data for Smart Grid Technologies” produced by the International Energy Agency (IEA) with contributions from Konstantina Kalogianni, Ashley Acker, and several other experts from the Organisation for Economic Co-operation and Development (OECD).