Global Substation Market to Power Up Revenue of $121.41 Billion by 2028 | Transformers Shortage to Remain a Key Concern

Global substation market was valued at USD 98.05 billion in 2021, and is projected to reach market size of USD 121.41 billion by 2028, at a CAGR of 3.10% over the forecast period (2022-2028).

Westford, USA, Dec. 07, 2022 (GLOBE NEWSWIRE) -- Substations are critical components in the delivery of electricity, and the increasing demand for electricity is driving the need for new substations as well as upgrades to existing ones. Growth in the substation market is being driven by a number of factors, including the increasing global demand for electricity, the growing use of renewable energy sources, and the need for new transmission and distribution infrastructure. In addition, government policies and regulations favor the construction of new substations as well as upgrades to existing ones.

As per SkyQuest’s study, most substation expansion in the next decade will be driven by population and economic growth, retirements of aging infrastructure, and the need to accommodate distributed energy resources (DERs), such as solar photovoltaic (PV) systems and wind farms.

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There are four key trends that are driving change in the global substation market.

  • The rise of renewables is putting pressure on grid operators to invest in new technologies and upgrade existing infrastructure.
  • 2. The increasing deployment of electric vehicles is changing the way power is used and stored, requiring new solutions for managing demand and distribution. 3. The growth of distributed generation is challenging traditional models of electricity generation and transmission.
  • 4. The rise of digital technologies is transforming the way power is managed, monitored, and controlled.

The global substation market is forecast to grow at a compound annual growth rate (CAGR) of 3.10% between 2022 and 2028, driven by the increasing demand for electricity and the need for infrastructure upgrade and expansion in emerging economies. The Asia-Pacific region is expected to be the fastest-growing market, followed by Latin America and the Middle East & Africa.

Substation Market is Highly Fragmented Top 10 Players are Holding Less than 20% Market Share

SkyQuest's analysis shows that the substation market is highly fragmented, with the top 10 companies accounting for less than 20% of the market. The remaining 80% of the market is divided among a large number of small and medium-sized companies. The major players in the market are ABB, Siemens, GE, and Schneider Electric. These companies have a strong presence in developed markets such as North America and Europe, where the demand for substations is high. However, they are also expanding their operations in developing markets such as Asia Pacific and Latin America, where the demand for substations is growing rapidly. Our analysis shows that the substation industry is highly competitive, with companies competing on price, quality, technology, and service. The competition is intensifying as more companies enter the market and new technologies are developed.

In a recent report, research firm SkyQuest analyzed the competitive landscape of the substation market, with a focus on Siemens. Siemens is one of the leading suppliers of substation equipment and automation systems, and has a strong foothold in both developed and emerging markets. According to our study, Siemens' main strengths lie in its "extensive product portfolio, global scale, financial strength and long history in the sector." The company's products are used in a variety of applications, from high-voltage transmission to medium-voltage distribution. In addition, Siemens offers a range of services for substation maintenance and operations.

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SkyQuest notes that Siemens' main weakness is its "somewhat inflexible organization structure," which can make decision-making slow and cumbersome. However, the company is working to improve its agility through initiatives such as simplifying its product portfolio and increasing its focus on digitalization. Overall, it is believed that Siemens is "well positioned" in the substation market and gives it a positive rating in our report.

Substation Market is Grappled with Shortage of Shortage of Transformers

According to SkyQuest's analysis, substations are facing a shortage of transformers. The main reasons for this shortage are the increased demand for electricity, the aging of existing infrastructure, and the lack of investment in new transformer capacity. As the demand for electricity increases, the need for more substations also increases. However, the problem is that there are not enough transformers to meet this demand. The aging of existing infrastructure is another contributing factor to the transformer shortage. As substations age, they require more maintenance and repairs, which can lead to transformer shortages.

The lack of investment in new transformer capacity is also a major factor in the current transformer shortage across global substation market. With the rising cost of materials and labor, many companies are reluctant to invest in new transformer capacity. As a result, the existing capacity is not being replaced as it ages and fails. This is leading to a serious shortfall in transformer capacity that is expected to last for several years.

This has placed unprecedented strain on the existing power infrastructure, in the global substation market leading to a rise in transformer failures. Secondly, the number of new transformer installations has not kept pace with demand, owing to a number of factors, including the global financial crisis and delays in approvals for new projects.

As a result, there is now a significant gap between transformer supply and demand. The impact of the transformer shortage has been widespread, with blackouts and brownouts occurring across the country. In some cases, power companies have been forced to ration electricity supply, leading to economic losses for businesses and households. SkyQuest's analysis of the substation market shows that the substation transformer shortage is set to continue in the short to medium term.

However, it is possible to mitigate the impacts of the shortage through proactive management of electricity demand and effective utilization of existing assets. In the longer term, new investment in transformer capacity will be required to meet growing demand.

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Major Players in the Global Substation Market

  • GE (US)
  • NR Electric Co., Ltd. (China)
  • Siemens (Germany)
  • Hitachi ABB Power Grids (Switzerland)
  • Schneider Electric (France)
  • Eaton (Ireland)
  • Efacec (Portugal)
  • Rockwell Automation (US)
  • L&T Electrical & Automation (India)
  • Texas Instruments Incorporated (US)

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