The Substation Automation Market (henceforth, referred to as the market studied) is expected to reach USD 51 Billion by 2026, registering a CAGR of 5.8% over the forecast period, 2021 - 2026. With the widening of the supply and demand gap, power management has become one of the most critical areas of concern worldwide. Energy consumption is increasing at one of the fastest rates globally; hence, the requirement of substation automation systems in the present-day substations to efficiently control and deliver power is highly sought out.
- Substation automation provides protection, control, automation, monitoring, and communication capabilities as a part of comprehensive substation control and monitoring solution. Today, substation layout is much cleaner where one can probably eliminate entire writing racks, and cabinets or make it much smaller depending on how users are handling their I/Os to the IEDs (intelligent electronic devices). High-speed microprocessor-based remote terminal units or intelligent electronic devices are used for substation automation and protection.
- The migration toward the future transmission and distribution substation is taking place because of the desire to bring more automation and intelligence to the power grid network to address a myriad of utility concerns such as how to reduce operational expenses to ways to meet new regulatory requirements, such as NERC-CIP (North American Electric Reliability Corporation-Critical Infrastructure Protection).
- According to Smart Energy International, it is estimated that Europe will spend USD 23.9 billion to automate or monitor secondary substations over the next decade. Utilities in countries including France, Italy, and Spain are expected to be the highest investors in equipment and services, enabling automation of substations.
- The smart electric substation role in smart cities has become more important than the traditional one. The key benefits derived out of substation automation are increased reliability, early detection of faults and quick diagnosis, improved worker safety, and enhanced utilization in the smart city infrastructure.
- Further, there are a total of 731 smart city projects in India, worth INR 46,366 crore, which have been approved, and implementation has been initiated in 49 (6.7%) projects, with only a meager completion of 24 (3.3%) projects. This significantly drives the demand and growth of substation automation in the coming period.
- Furthermore, COVID-19 impacted the electric grid usage patterns in the first and second quarter of 2020. According to IEA (International Energy Agency), the COVID-19 lockdowns cut overall energy consumption by about 25%.
- For instance, on the electrical grid, residential energy consumption has increased slightly, but due to reduced power use at industrial and commercial locations resulted in an overall reduction of electric power use by approximately 20% in areas. Whereas, partial lockdowns areas had proportionally less impact. Further, IEA estimated that energy consumption in 2020 would stay at least 5% below 2019 levels.
Key Market Trends
High Demands Of Smart Grid to Drive the Market Growth
- The increasing demand for efficient transmission of electricity, reduced operations and management costs for utilities, and ultimately lower power costs for consumers drive the growth of smart grids in the market. Additionally, the increasing integration of large-scale renewable energy systems and improved security among others are fueling the growth of smart grids in substation automation.
- Smart grid communication technology provides predictive data and recommendations to the utilities, their suppliers, and their customers on how best to manage power. Moreover, smart grids are deploying by applying modern technologies in substations and power networks.
- To reach the smart grid, one needs complete information from substations in the transmission network to analyze and manage it. The trends towards upgrading and retrofitting the old conventional substations besides new modern substations are driving the market.
- Owing to the need for upgradation and replacing an aging energy infrastructure, the smart grid is one of the best solutions used in substation automation as it allows for automatic rerouting when equipment fails or outages occur and minimize outages and minimize the effects. These Grid technologies are expected to drive the market growth for substation automation further.
- Further, digitization and automation have been the focus areas for the Indian power grid over the last decade. During this period, the Power Grid Corp. of India Ltd (POWERGRID), the central transmission utility for India, deployed IEC 61850-based grid substation automation in more than 100 substations. For fully digitalized substation, the 220 kV Greenfield Chandigarh substation, is currently under construction.
North America To Hold Significant Market Share
- According to the US Department of Energy, automation in switchgears (circuit breakers) and reclosers is categorized under the concept of distribution automation. It is estimated that with more than 60,000 distribution substations, 205,000 distribution circuits, and six million miles of distribution lines in operation, the United States has enormous potential for automation in its distribution network.
- The California Public Utilities Commission (CPUC) has recently approved Pacific Gas and Electric Co.'s (PG&E) comprehensive and cost-effective microgrid proposals. These are designed to reduce the number of customers affected by Public Safety Power Shutoff (PSPS) events and mitigate the impacts on those who remain affected.
- For 2020, the PG&E's microgrid solutions focus primarily on building grid resilience and keeping the power on for customers in communities that have a high likelihood of experiencing a future PSPS event.
- Additionally, the PG&E will use temporary generation at safe-to-energize substations to support safe-to-energize customers and communities affected by transmission line outages during PSPS events. It is preparing 63 substations to connect temporary generators as the need arises during PSPS events, subject to operational logistics and generator availability.
- Furthermore, various industrial companies are expanding their substation with new development and partnership ecosystems, which leverages the market's growth. In May 2020, BASF Agriculture Products North America and its herbicide plant in Beaumont, Texas, revamped and expanded its onsite electrical supply and distribution system and controls.
The global substation automation market appears to be extremely competitive. Market leaders are investing in research and development for innovating their products continuously and increasingly seeking market expansion through various strategic mergers and acquisitions, innovation, and cost-effective product portfolio. Some of the key developments in the market are:
- In July 2020 - Siemens launched a new platform to create customer-specific apps for distribution grids. The distribution grid applications are the new Siapp, a software license for the Sicam A8000 automation, and remote terminal unit. The Siapp application is based on the Sicam A8000 with the powerful CP-8050 processor module. Siapp allows up to three separate custom applications to be developed, parameterized, and loaded onto the remote terminal unit.
- In March 2020 - ABB and TRANSCO pioneered a unique substation-to-substation solution that will better utilize the existing digital technology while improving availability and reliability of the mission-critical application across the UAE and the Middle East.
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Table of Contents
1.2 Scope of the Study
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Market Drivers
4.3.1 Need to Upgrade the Existing Networks
4.4 Market Restraints
4.4.1 High cost of installation
4.5 Assessment of Impact of Covid-19 on the Industry
5.2 By Module
5.3 By Communication
5.4 By Stage
5.5 End user
5.6.1 North America
5.6.3 Asia Pacific
5.6.4 Rest of the World
6.1.1 ABB Limited
6.1.2 Siemens AG
6.1.3 Schneider Electric SE
6.1.4 General Electric Co
6.1.5 Cisco Systems Inc.
6.1.6 Eaton Corporation
6.1.7 Corporacion SA
6.1.8 Schweitzer Engg Lab
6.1.9 Alstom SA
6.1.10 Amperion Inc
A selection of companies mentioned in this report includes:
- ABB Limited
- Siemens AG
- Schneider Electric SE
- General Electric Co
- Cisco Systems Inc.
- Eaton Corporation
- Corporacion SA
- Schweitzer Engg Lab
- Alstom SA
- Amperion Inc