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North American Transmission and Distribution Services Markets
Frost & Sullivan, Jan 2007, Pages: 96
This Frost & Sullivan research service titled North American Transmission and Distribution Services Market provides detailed growth forecasts and analyses of both trends as well as end users. In this research service, Frost & Sullivan's expert analysts thoroughly examine the following markets: transmission engineering and consulting services, distribution engineering services, construction services for T&D, and T&D operations and maintenance (O&M).
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Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Transmission Engineering and Consulting Services
- Distribution Engineering Services
- Construction Services Market for Transmission & Distribution (T&D)
- Operations and Maintenance (O&M)
The North American transmission and distribution (T&D) services market has entered a critical phase due to changing utility requirements and technologies and new federal regulations. Competition is becoming intense with the demand for T&D services increasing and many new companies entering the market. In such a scenario, pricing is likely to become a key competitive factor. 'Reasonably-priced services will help attract greater interest from the utilities, as they will find it easier to make a strong business case for affordable services,' says the analyst of this research service. 'This could result in huge contracts for T&D service companies.' Apart from lower costs, other important competitive factors include improved reliability, maintenance, and ease-of-use.
The T&D operation and maintenance services market has been experiencing particularly strong growth over the last few years, with maintenance services likely to account for much of the growth. The market for distribution engineering and construction services is also set to expand and is likely to benefit from opportunities in the transmission engineering and construction services market, since many utilities prefer to contract both these services to one company. Additionally, much of the existing T&D infrastructure requires a major overhaul and this is also likely to create new opportunities in construction services for new facilities along with the upgrade of existing infrastructure.
High Investment Required to Upgrade the Entire T&D Infrastructure is a Major Challenge
While upgrade-related opportunities for the T&D services market are significant, they will require utilities to raise huge amounts of capital. This is expected to pose a major challenge given that some utilities have yet to recover from the industry’s financial crisis of the early part of the decade. In such a situation, regulatory authorities will need to frame clear plans on the amounts required to invest in new equipment as well as upgrade existing equipment.
'While finding a solution to this challenge is likely to take some time, the T&D infrastructure requires an urgent solution,' says the analyst. 'Certain transmission infrastructure has been in use for as long as 30 years, which, technically speaking is much more than the actual life cycle and also leads to numerous reliability issues.' On the bright side, investment in T&D infrastructure upgrades has begun to show more positive trends following the disastrous power blackout in August 2003. The challenge for T&D companies will be to keep pace with these increasing investment trends and focus on constructing new T&D facilities.
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