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As many as 238 million smart meters will have been deployed across Europe over the next nine years and cumulative investment in smart grid technologies will total $80.3 billion by 2020, says cleantech market analyst firm Pike Research.

Unlike the other parts of the world, Europe appears to be more aggressive in increasing energy efficiency and reducing carbon emissions, according to the report.

Over the next five to 10 years, these deployments will be closely linked with the achievement of 2020 carbon reduction goals in the European Union.

"Smart grid development is really part of a unique transformation taking place across European energy networks, industry, and society over the next 40 years," says senior analyst Eric Woods. "The smart grid is at the heart of energy and environmental policies that cover 27 countries and 500 million people."

While Germany, the largest electricity market in the EU, supports a wide range of smart grid and smart meter pilots, little has happened in the way of a large-scale deployment. In Sweden, by contrast, an early commitment to smart metering has led to a prominent position in the overall European smart grid movement, according to the report.

Among the critical issues to be addressed, according to the researcher, is the development of European standards for smart meters and smart grid deployments, the demonstrated ability to address privacy and security concerns, the creation of a realistic roadmap for large-scale deployment, and the formulation of suitable investment and incentive models by regulators.

The report examines the developments in European energy policy, the similarities and differences across European countries, national strategies for smart grids and smart meters, and specific European projects and pilots for smart grids.

The report also analyzes the strategies of key players in the European market and the role of European standards bodies and other agencies promoting the adoption of smart grids.