Substation Automation Market revenue to reach USD 62 Billion by 2035, says Research Nester

Major substation automation market players include AMETEK, Inc., Axiomtek Co. Ltd., Toshiba Corporation, Texas Instruments Incorporated, Larsen & Toubro Ltd., Cisco Systems, Inc., Eaton Corporation PLC, and General Electric Company.

New York, March 06, 2024 (GLOBE NEWSWIRE) -- The global substation automation market size is predicted to expand at ~6% CAGR between 2023 and 2035. The market is projected to garner a revenue of USD 62 billion by the end of 2035, up from a revenue of ~USD 28 billion in the year 2022.The growth of this market is driven by the increasing investment in renewable energy sources to meet energy demands. Currently, solar and wind are the epicenter of power generation with most economies at least generating 20% of their electricity with these two sources. As per a report by International Energy Agency, in 2019 the global share of renewable resources in power generation reached 25%. By 2050, it is anticipated to offer a share of approximately 86% in global power generation. Moreover, the increasing global population and higher electricity demand are estimated to boost the market expansion in the projected period. Electricity is becoming as crucial in people's daily lives as water and air.

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As per the research industrial, residential, and commercial domains each account for one-third of total electricity use. Rapid urbanization and industrialization in emerging economies have led to an increased demand for electricity. Substation automation helps utilities in these regions manage and optimize power distribution efficiently to meet the growing demand and address the challenges associated with expanding power infrastructure. The growing emphasis on renewable energy sources, such as solar and wind, has led to the need for more sophisticated and adaptable power infrastructure.

Increasing Investments in Smart Grids across the Globe to Boost Market Growth

Substation automation aids in reducing maintenance and operational cost along with this it enhances plant productivity with advanced technologies. It performs smart load-shedding functions and interlocking to make sure the reliability, enhanced performance, and security of electrical power networks. Smart grids help to reduce energy losses, increase productivity and dependability, and manage energy demand more cost-effectively and wisely during transmission and distribution. Owing to these benefits major authorities are offering investment in the development of smart grids. In 2018, an investment of USD 949,000 was offered to smart grid projects by Natural Resource Canada. To address a variety of utility concerns, including how to reduce operational costs and how to comply with new regulatory requirements, such as NERC-CIP (North American Electric Reliability Corporation - Critical Infrastructure Protection), the migration towards the future transmission and distribution substation is taking place. Over the next ten years, it is predicted by Smart Energy International that Europe will invest USD 23.9 billion in automating or monitoring secondary substations.

Substation Automation Market: Regional Overview

The market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.

Expanding Grid Modernization Initiatives to Drive the Market Growth in North America Region

The substation automation market in North America region is estimated to garner the largest revenue by the end of 2035. Grid modernization initiatives, backed by substantial government investments, are key drivers for the adoption of substation automation in North America. These initiatives aim to enhance grid efficiency, reliability, and resilience, making them more adaptable to the evolving energy landscape. The U.S. Department of Energy (DOE) invested over USD 4.5 billion in the Smart Grid Investment Grant (SGIG) program, which included funding for substation automation projects. The increasing integration of renewable energy sources, such as wind and solar, requires advanced substation automation to manage the intermittent nature of these energy inputs. Substation automation supports the efficient integration of renewable energy into the grid, contributing to a more sustainable and diversified energy mix. Advancements in communication technologies, including the expansion of broadband infrastructure, are instrumental in supporting the connectivity requirements of substation automation. Robust communication networks enable real-time data exchange, enhancing the efficiency of automated substation systems.

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Rapid Urbanization and Industrialization to Propel the Growth in the Asia Pacific Region

The Asia Pacific substation automation market is estimated to garner the highest CAGR by the end of 2035. Rapid urbanization and industrialization in the Asia Pacific region are driving the demand for electricity. Substation automation becomes crucial to efficiently manage and distribute power in urban areas experiencing significant growth, ensuring reliability and stability in the power supply. The Asian Development Outlook 2021 by the Asian Development Bank (ADB) indicates that Asia's urban population is expected to grow from 2.6 billion in 2019 to nearly 3.5 billion by 2050. Government support and investments in smart grid technologies, including substation automation, are key drivers for substation automation market growth. These initiatives aim to enhance grid efficiency, reduce losses, and integrate renewable energy sources into the power network. The increasing integration of renewable energy sources, such as solar and wind, requires advanced substation automation for effective management. Automated systems help balance the intermittent nature of renewables, ensuring a stable and reliable power supply.

Substation Automation, Segmentation by Stage

  • Retrofit
  • New

Amongst these segments, the new segment in the substation automation market is anticipated to hold the largest share over the forecast period. The integration of AI and ML technologies in new substation automation systems is a significant growth driver. These technologies enhance the predictive capabilities of the system, enabling better fault detection, predictive maintenance, and optimization of power distribution processes. With the rise in cyber threats targeting critical infrastructure, the new substation automation segment is driven by the need for robust cybersecurity measures. Advanced cybersecurity solutions are crucial to safeguard the automation systems, ensuring the resilience and reliability of the power grid. As per a report by the U.S. Department of Energy (DOE), the number of cybersecurity incidents in the energy sector increased by 60% from 2015 to 2020. The adoption of edge computing in new substation automation systems facilitates real-time data processing at the edge of the network. This reduces latency, enhances system responsiveness, and allows for faster decision-making, contributing to the efficiency of the overall automation process. Utilities are prioritizing energy efficiency initiatives to reduce overall energy consumption. By promoting energy-efficient technologies and practices, utilities contribute to sustainability goals, lower operational costs, and enhance the long-term reliability of the power grid.

Substation Automation, Segmentation by End User

  • Utility
  • Electronics

Amongst these segments, the utility segment in the substation automation market is anticipated to hold a significant share over the forecast period. Grid modernization is a key driver for the utility segment. Investments in smart grid technologies, including advanced metering infrastructure and substation automation, enhance the efficiency, reliability, and resilience of power grids, ensuring utilities can meet evolving energy demands. Utilities are actively integrating renewable energy sources into their portfolios. This shift is driven by global commitments to reduce carbon emissions and increase the share of renewable energy. Utility companies are investing in technologies to manage the variability of renewable sources and optimize their integration into the grid. The International Renewable Energy Agency (IRENA) reports that the global share of renewable energy in power generation reached 29.7% in 2021. Demand response programs enable utilities to manage electricity demand during peak periods. By incentivizing consumers to reduce or shift their energy usage, utilities enhance grid stability and reduce the need for additional infrastructure. This contributes to overall efficiency and cost-effectiveness. The rise of electric vehicles (EVs) is impacting utilities. As the demand for electric charging infrastructure grows, utilities are investing in grid enhancements to accommodate the increased load. This includes deploying smart charging solutions and optimizing grid capacity to support widespread EV adoption.

Few of the well-known industry leaders in the substation automation market that are profiled by Research Nester are AMETEK, Inc., Axiomtek Co. Ltd., Toshiba Corporation, Texas Instruments Incorporated, Larsen & Toubro Ltd., Cisco Systems, Inc., Eaton Corporation PLC, General Electric Company, and other key market players.

Recent Development in The Substation Automation Market

  • January 18, 2022: Eaton Corporation PLC launched advanced intelligent power management UPS in the North American market for power protection in IT environments.
  • July 20, 2021: ABB Ltd. announced the acquisition of ASTI Group, with the insight to drive the next generation of flexible automation.

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