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The substation automation market size is estimated to grow by USD 15.17 billion at a CAGR of 6.47% between 2022 and 2027. The need for efficient power transmission and distribution, driven by the increasing demand for electricity and the need to reduce energy losses, is driving market growth by increasing the adoption of advanced transmission and distribution technologies. Advancements in communication and connectivity technologies, driven by the growing need for real-time monitoring and control of power grids, are also boosting market expansion by enabling smarter and more efficient grid operations. Additionally, the growing demand for grid resilience and security, driven by the increasing frequency and severity of grid disruptions, is driving the adoption of technologies and solutions that enhance grid resilience and security. Overall, these factors are driving the growth of the power transmission and distribution market and driving innovations in grid technologies and solutions. Our market research and growth report examines historic data from 2017 to 2021, besides analyzing the current market scenario.
Market Forecast 2023-2027
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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.
The market share growth by the utilities segment will be significant during the forecast period. The utilities sector plays a critical role in the 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 companies 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, favorable 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.
The market is experiencing rapid growth driven by the adoption of digital technology in conventional substations to support smart cities and the increasing use of electric and hybrid vehicles. As data centers and renewable energy projects expand, the need for efficient power management is critical. Automation systems in substations enhance energy consumption efficiency, with a focus on substation automation systems for protection, control, and monitoring. These systems leverage communication capabilities, including remote terminal units and smart electronic devices, to enable real-time monitoring and control. Digital technologies are revolutionizing electrical power transmission and distribution systems, integrating control systems with communication networks and sensors for enhanced operation and maintenance of substation equipment. 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.
The market is experiencing a growing demand for grid resilience and security, driven by concerns over power outages and the need to enhance grid performance. Utilities and grid operators are increasingly adopting substation automation solutions to improve the reliability and security of their power systems. These solutions enable utilities to enhance their communication capabilities, utilize remote terminal units, and integrate smart electronic devices.
Additionally, by leveraging digital technologies and communication networks, utilities can implement sensors for real-time monitoring, leading to more efficient grid management. These solutions enable utilities to monitor and control various grid components, such as transformers and circuit breakers, in real-time. Further, efficient management of grid assets can help utilities prevent equipment failures, reduce maintenance costs, and enhance overall grid reliability. Therefore, these factors are expected to drive the demand for substation automation and contribute to the market's growth in the forecast period.
The 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 increase 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 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.
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 market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments
The market is witnessing rapid growth driven by advanced technologies and the need to modernize aging energy infrastructure. Key players like Equinor are investing in digital substation products and intelligent grid solutions to enhance energy transition and achieve carbon neutrality. Utilities are embracing distribution automation and deploying smart secondary substations to optimize electric grid usage patterns and ensure reliable electricity supply. With predictive data and remote monitoring, fault detection and automatic rerouting are enhancing system performance and worker safety. Renewable power generation and highly efficient energy solutions are driving the adoption of smart grid programs and large-scale renewable energy systems, propelling the market towards a low-carbon future.
Additionally, the market is experiencing significant advancements with the introduction of technologies such as capacitor bank controllers and load tap controllers. Copper wire and optical fiber communication channels are revolutionizing data transmission, ensuring seamless communication between distribution circuits and substations. Utilities are prioritizing digital systems factories to enhance equipment and services and streamline modernization efforts. Investments in smart grid programs and smart meters are driving electrification initiatives and optimizing electricity transmission. Innovations like smart city infrastructure and intelligent electronic devices are reshaping the utility industry, while low-carbon initiatives and solar and wind energy integration are fostering sustainability. Strategic mergers and acquisitions among suppliers are fueling growth, ensuring a robust future for substation automation.
Furthermore, the market is witnessing rapid growth driven by advancements in technologies such as capacitor bank controllers and load tap controllers. Copper wire and power line communication channels are optimizing data transmission, ensuring efficient communication between distribution lines and substations. Utilities are investing in digital systems factories to enhance diagnosis capabilities and streamline manual inspection processes. Innovations like smart electric substations and smart meters are digitizing the grid, while smart grid programs and recommendations from smart secondary substations alliances are driving investment in the industry. Ethernet and grid communication technology are enabling seamless connectivity, addressing utility concerns and paving the way for upgrading and retrofitting initiatives in distribution systems.
Industry 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 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. |
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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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