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The substation automation market size is estimated to grow at a CAGR of 6.47% between 2022 and 2027. The market size is forecast to increase by USD 15.17 billion. The growth of the market depends on several factors including the need for efficient power transmission and distribution, advancements in communication and connectivity technologies, and growing demand for grid resilience and security. Our report examines historic data from 2017 to 2021, besides analyzing the current market scenario.
This report extensively covers market segmentation by end-user (utilities, steel, mining, transportation, and oil and gas), type (transmission and distribution), and geography (North America, APAC, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges.
Substation Automation Market Forecast 2023-2027
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Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.
For grid resilience and security, the global substation automation market is witnessing an increasing demand which is being driven by several factors, including rising concerns about power outages and the need to optimize grid performance. Utilities and grid operators are able to enhance the reliability and security of their power systems by adopting substation automation solutions. Substation automation solutions allow utilities to scrutinize and control various components of the grid, such as transformers, circuit breakers, and voltage regulators. Such real-time monitoring and control capability enables operators to identify potential issues and take required actions, ensuring optimal performance of the grid.
In addition, utilities can prevent equipment failures, reduce maintenance costs, and improve overall grid reliability by efficiently managing grid assets. Therefore, such factors are anticipated to augment the demand for substation automation, which will drive the growth of the market during the forecast period.
The global substation automation market is experiencing a substantial rise in demand for EVs and HEVs. Increasing adoption of sustainable transportation solutions and the growing concern over environmental issues are the major attributes that result in an increase in demand. EVs and HEVs are more environmentally friendly alternatives to traditional gasoline-powered vehicles as they produce zero or significantly lower emissions. The automotive industry is shifting toward producing more electric and hybrid vehicles as governments worldwide enforce more stringent regulations to combat climate change. The trust in EVs and HEVs increases, further boosting their sales as technology continues to improve. Thus, the need for efficient and reliable charging infrastructure provided by substation automation has become paramount.
Moreover, the declining prices of EVs, along with government incentives and subsidies, have made them a possible option for consumers. This led to an increase in the demand for substation automation as more individuals and businesses invested in EVs and HEVs, necessitating the development of robust charging infrastructure. Therefore, these factors are anticipated to expand the demand for substation automation, which will drive the growth of the market during the forecast period.
The rise in the shortage of skilled workforce is a significant challenge that is posing a concern for businesses operating in the electronics industry and hinders market growth. The rapid growth of the electronics industry is one of the primary reasons for the skilled workforce shortage in the global substation automation market. Substation automation systems are experiencing increased adoption owing to their capacity to improve operational efficiency and reduce costs. The rising demand for these systems is outpacing the supply of skilled professionals who can effectively design, install, and maintain them.
Also, advancements in technology have also contributed to the shortage. Substation automation systems now integrate with advanced components such as AI, IoT, and cloud computing. The shortage of professionals with the necessary skills to operate and troubleshoot these advanced systems is adding to the workforce gap. Therefore, these factors are anticipated to restrict the growth of the market during the forecast period.
The market share growth by the utilities segment will be significant during the forecast period. The utilities sector plays a critical role in the global substation automation market. Utility companies are increasingly adopting substation automation solutions to optimize their operations with the rising demand for electricity and the need to modernize power grids.
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The utilities segment was the largest and was valued at USD 18.74 billion in 2017. To enhance asset management strategies, utility companies are leveraging substation automation. Utilities can monitor and analyze the performance and health of substation equipment by implementing advanced software solutions that help in optimizing maintenance schedules, minimizing downtime, and extending the lifespan of critical assets. For instance, predictive maintenance algorithms can detect early signs of equipment failure and schedule repairs before a major disruption occurs. Therefore, such benefits are anticipated to augment the adoption of substation automation in the utility sector, which will drive the growth of the utility segment in the global substation automation market during the forecast period.
Based on type, the market has been segmented into transmission and distribution. The transmission segment will account for the largest share of this segment.? Substations need to effectively manage the transmission of power from these decentralized sources with the increasing adoption of renewable energy, such as solar and wind power. This needs the integration of intelligent devices and communication systems that can seamlessly interface with renewable energy sources and the existing grid infrastructure. For instance, by utilizing advanced communication and control systems, utilities can dynamically manage the transmission of renewable energy based on availability and demand, balancing the generation and consumption of power effectively. Therefore, such advantages are anticipated to advance the adoption of transmission technology, which will drive the growth of the transmission segment in the global substation automation market during the forecast period.
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APAC is estimated to contribute 35% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Another region offering significant growth opportunities to vendors is North America. The substation automation market in North America is being driven by the advanced technological infrastructure and the quick adoption of automation across various sectors, particularly power distribution, in countries such as the US and Canada. These two countries are highly developed when it comes to electrical infrastructure. Because of this, most of the demand in these regions will come from upgrading the existing infrastructure and transitioning to smart grids. These countries have also invested a significant amount in promoting the use of EVs, which has increased the demand for EV charging infrastructure.
Consequently, the adoption of substation automation solutions in the region is predicted to increase in 2022. Furthermore, favourable government policies and incentives are propelling the growth of the market in this region. For instance, the US federal government offers incentives to renewable energy facilities under the Renewable Electricity Production Tax Credit (PTC), which provides a PTC amount of USD 0.0184 per kWh for all wind energy generation technologies. Moreover, the region's increasing focus on setting up offshore wind farms is expected to strengthen the demand for substation automation during the forecast period.
In 2020, the outbreak of the COVID-19 pandemic negatively influenced the growth of the industrial sector in North America. However, with the help of rapid vaccination programs across the region, the lockdown restrictions were lifted in the second half of 2020. This led to a surge in the manufacturing activities in the oil and gas, automotive, and other end-user industries of substation automation. Therefore, the increasing penetration of cutting-edge technologies such as AI, automated solutions, and the IoT is expected to drive the growth substation automation market in the region during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ABB Ltd.- The company offers substation automation solutions such as Smart substation control and protection SSC600.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
ABB Ltd., Arteche Lantegi Elkartea SA, Beijer Electronics Group AB, Cisco Systems Inc., Eaton Corp. Plc, General Electric Co., Hitachi Ltd., Mitsubishi Electric Corp., OHB SE, Renewable Energy Systems Ltd., Schneider Electric SE, Schweitzer Engineering Laboratories Inc., Siemens AG, Texas Instruments Inc., The Weir Group Plc, Toshiba Corp., TRC Companies Inc., Trilliant Holdings Inc., ZIV Automation, and SHENZHEN GUOWANG NARI TECHNOLOGY CO. LTD.
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The substation automation market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Substation Automation Market Scope |
|
Report Coverage |
Details |
Page number |
186 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.47% |
Market growth 2023-2027 |
USD 15.17 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
5.47 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 35% |
Key countries |
US, China, India, Germany, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Arteche Lantegi Elkartea SA, Beijer Electronics Group AB, Cisco Systems Inc., Eaton Corp. Plc, General Electric Co., Hitachi Ltd., Mitsubishi Electric Corp., OHB SE, Renewable Energy Systems Ltd., Schneider Electric SE, Schweitzer Engineering Laboratories Inc., Siemens AG, Texas Instruments Inc., The Weir Group Plc, Toshiba Corp., TRC Companies Inc., Trilliant Holdings Inc., ZIV Automation, and SHENZHEN GUOWANG NARI TECHNOLOGY CO. LTD. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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