The global substation automation market is expected to be valued at USD 29.12 billion in 2023. With the increasing demand for electric and hybrid vehicles, coupled with the rising use of digital technology to improve grid efficiency in smart cities, the overall demand for substation automation is projected to grow at a CAGR of 6.7% between 2023 and 2033, totaling around USD 55.69 billion by 2033.
Substation automation is a method of using data from intelligent electronic devices. It refers to controlling and automating the capabilities within the substation and controlling power systems devices through commands from remote users. To automate the electricity substations, equipment such as specific software, special sensors, and equipment that facilitate two-way communication is entailed.
| Data Points | Key Statistics |
|---|---|
| Substation Automation Market Value 2023 | USD 29.12 billion |
| Substation Automation Market Projected Value (2033) | USD 55.69 billion |
| Substation Automation Market CAGR (2023 to 2033) | 6.7% |
In addition, intelligent electronic devices such as protective relays, programmable logical control, and a digital transducer are used. Such type of equipment helps in the monitoring and controlling of substation equipment. Also, with the help of such equipment, the incidences and duration of power outages are reduced.
The key market driver of this market is to reduce human intervention and improve the system's operating efficiency. Also, increasing developments in SCADA and communication technologies and rising demand for renewable energy projects drive the market growth.
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The global demand for substation automation is projected to increase at a CAGR of 6.7% during the forecast period between 2023 and 2033, reaching a total of USD 55.69 billion in 2033, according to a report from Future Market Insights (FMI). From 2018 to 2022, sales witnessed significant growth, registering a CAGR of 4.1%.
According to Future Market Insights, a market research and competitive intelligence provider, the substation automation market was valued at USD 27.29 billion in 2022.
The increasing demand for efficient electricity transmission, reduced operations and management costs for utilities, and, ultimately, lower power costs for consumers drive the growth of smart grids in the market. Also, 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, suppliers, and customers on how best to manage power. Moreover, smart grids are deployed 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 boosting the market growth.
Attributed to the need for the upgradation and replacement of 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, minimizes outages, and minimizes the effects. These Grid technologies are expected to further drive the market growth for substation automation.
Additionally, 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 a fully digitalized substation, the 220 kV Greenfield Chandigarh substation is currently under construction.
Increasing Investments in Smart Grid Infrastructure Development to Fuel the Market Growth
Substation automation assists with reducing operational as well as maintenance costs and increases plant productivity using enhanced technologies. It also ensures high performance, reliability, and safety of electrical power network performing interlocking and smart load shedding functions.
Smart grids can reduce energy losses during transmission and distribution, improve reliability and productivity, and manage energy demand smartly and cost-effectively.
Considering all these benefits, heavy investments are being made for the development of smart grids across the world. For instance, in May 2018, Natural Resource Canada announced an investment of USD 949,000 for a next-generation smart grid project.
The grid project focuses on promoting the adoption of renewable energy sources and the implementation of technology to integrate new sources of clean energy without compromising the stability and reliability of existing grids.
The Government of Germany is making multiple initiatives to completely digitalize various operations in the railway sector; for example, the automatic operation of trains on the mainline network using automated substations. According to the International Railway Journal, the Government of Germany has invested USD 80 million in developing digital applications to increase the network capacity.
Huge Prospects for Substation Automation to Augment the Market Growth
Solar and wind are currently the mainstream options in the power sector, with most countries generating more than 20% of their electricity using solar and wind energy sources. According to the International Energy Agency (IEA), the share of renewable sources in world electricity generation reached 25% in 2019.
By 2050, renewable power will be able to provide the bulk of global power demand, which would be approximately 86%. Companies across the world are focusing on investing in sustainable energy infrastructure than in fossil fuels.
According to the IEA's World Energy Investment 2020 report, total investment in renewable energy sources amounted to USD 259 billion and USD 226 billion in 2019 and 2020, respectively. The decline in 2020 was much because of the economic crisis due to the outbreak of the COVID-19 pandemic.
Countries worldwide are trying to develop new renewable electricity generation projects. They are also investing in solar and wind projects to meet the growing electricity demand and minimize the environmental impacts, along with investments in generating power using non-renewable sources at the same time.
Increase in Population and the Subsequent Rise in Electricity Demand boding well for Substation Automation Expansion
Electricity has gained significant importance in daily life, similar to air and water. Residential, commercial, and industrial users each account for roughly one-third of the nation's electricity use.
On average, the biggest single uses of electricity in the residential sector are space heating and cooling (air conditioning), lighting, water heating, space heating, home appliances, and electronics. Demand for electricity in the residential sector increases on hot summer afternoons due to the rise in ACs, fans, and coolers.
The commercial sector comprises government organizations, service-providing facilities and equipment, and other public and private entities. Usually, the substantial single uses of electricity in the commercial sector are lighting, heating, ventilation, and air cooling & conditioning.
Electricity requirements in the commercial areas rise during operating business hours and may reduce substantially on nights and weekends. Electricity use in the industrial sector generally does not fluctuate through the day or year, as in the case of residential and commercial sectors, particularly at manufacturing facilities that operate round-the-clock.
For instance, in 2019, according to IEA, the world's total electricity final consumption reached 22 848 TWh, up 1.7% from 2018. In 2019 (OECD Organization for Economic Cooperation and Development), the total electricity final consumption stood at 9 672 TWh, 1.1% lower than in 2018, while final electricity consumption in non-OECD countries was 13 176 TWh, an increase of 3.8% from 2018.
High Installation Cost of IEDs in Substations to Act a Market Restraint
The initial phase of automating the substation is capital-intensive, which may restrain the growth of the global substation automation market. The increasing use of advanced technologies such as microprocessors and service-oriented architecture (SOA) and the rising requirement to embed several IEDs in substations have increased the purchase costs of these substations.
Moreover, effective deployment of smart substations requires strong coordination across customary organizational boundaries, significant process change, and rigorous governance. High investments in the fruitful deployment of smart substations could add to the government's economic burden. After the deployment, high operational and maintenance costs are also a big concern for utility providers.
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Increasing Investment in Energy Infrastructure in the Region
The North American substation automation market is expected to accumulate the highest market share of 36.0% in 2023. On a geographic basis, North America is anticipated to be the largest market for substation automation, owing to the increasing popularity and adoption of advanced intelligent electronic device & communication technologies.
This is helping the substation automation market growth along with the technology development in the electrical field in countries like the United States and Canada.
Factors such as increasing investment in energy infrastructure by different governments owing to increasing urbanization and higher energy demand are some of the major factors that are expected to boost the growth of the Substation Automation Market in the region over the analysis period.
In addition, increasing dependence on electricity, demand from the power system for advanced technology, requirements to reduce maintenance and operating costs, and implementation of government incentives are primarily driving North America's substation automation market size.
Government Initiatives to Improve Power & Energy Sector in the Region
The substation automation market in the Asia Pacific is expected to accumulate a market share of 32.5% in 2023 and is expected to continue to maintain the trend over the forecast period as well. Several initiatives have been taken by various governments in APAC countries to improve the power and energy sector, driving the growth of the substation automation market.
The Government of India has launched several schemes to revive power distribution utilities and electrify villages. The Indian government is following the smart infrastructure vision in its country.
The smart power infrastructure includes digitization of the grid, which helps distribute uninterrupted electricity to the industrial, residential, and commercial end users. Additionally, in 2020, the Government of China invested USD 31 billion to modernize its grid infrastructure by installing automated substations. Similarly, countries such as Indonesia and South Korea are also investing in grid modernization projects.
For instance, in November 2019, CG Power Systems Indonesia, a subsidiary of CG Power and Industrial Solutions (CG), was awarded a contract from the Indonesian state utility PT PLN (Persero) to manufacture and supply 25 units of power transformers valued at USD 24 million.
The order will support PLN's ambitious goal to enhance its transmission grid performance. All these factors are placing the substation automation market in APAC towards a positive growth trajectory.
Furthermore, Asia Pacific is projected to have healthy growth during the forecast period owing to the increasing demand for rural electrification and adoption of equipment facilitating safety and better operation of the substation. Also, the presence of companies bringing in advancements in electrical equipment will further add up to the regional growth.
Increasing Demand for Smart Grids in the Region
The European substation automation market is expected to accumulate a market share value of 30% in 2023. The European renewable target for 2030 (32% of total energy consumed) means that more than 50% of electricity would be generated from RES, most of which would be connected to the MV and LV grids.
Furthermore, policies formulated by the EU have encouraged the development of decentralized electricity generation, electric vehicles, and energy storage to cater to flexible demand.
Moreover, the European countries are emerging as major revenue-generating countries for substation automation markets, owing to the increasing demand for smart grids and an increase in the adoption of renewable energy. These factors are anticipated to accelerate the European Substation Automation Market during the forecast period.
Substation Automation Hardware to beat Competition in Untiring Markets
Hardware is estimated to account for the largest market share of the substation automation market in 2023, accumulating 65% revenue. The market growth can be attributed to the introduction of the IEC 61850 standard for substations, which enables the incorporation of all control, measurement, and monitoring functions in one protocol and facilitates interoperability between intelligent electronic devices (IEDs).
The demand for substation automation systems is also driven by the increasing need to retrofit conventional substations to incorporate modern-day monitoring and control capabilities.
Various government bodies and companies worldwide plan to install SCADA systems in their substations. Utilities and heavy industries are increasingly adopting SCADA systems to achieve improved control and complete view of substations, increasing operational efficiency.
SCADA Segment to Drive the Substation Automation Market
Based on the control system, the SCADA segment is expected to witness significant growth over the forecast period, at a CAGR of 6.3%, owing to increased reliability, greater customer satisfaction, and improved utilization witnessed over its installation across various industries.
Moreover, rising implementations and demand for SCADA systems, especially from pharmaceutical and food & beverage sectors, drive the market growth. Besides, the increasing adoption of SCADA technology in energy & power and the oil & gas industries worldwide creates substantial market demand.
SCADA systems are witnessing increasing adoption in major industries, such as energy, oil & gas, recycling, transportation, water & wastewater, food & beverage, and manufacturing. Also, SCADA adoption among industrial organizations and private companies is growing to control & maintain the efficiency of communication systems across facilities, make data-driven smarter decisions, and help mitigate downtime issues.
Over recent years, SCADA systems have emerged as crucial solutions for simple configurations and large, complex installations for many different types of enterprises in many modern industries. Also, developments in the Industrial Internet of Things (IIoT) and burgeoning sectors worldwide boost market demand.
Commercial and Civic Power Utilities Segment to Dominate the Substation Automation Market
Commercial and civic power utilities are expected to be the primary end user of the substation automation market at present, likely to flourish at a CAGR of 6.5% until 2033. The market growth can be attributed to the increasing government initiatives towards modernization of power grids and growing investments towards power generation through renewable sources.
According to the World Energy Investment 2020 report published by the International Energy Agency (IEA), total investment in renewable sources of power amounted to USD 259 billion and USD 226 billion for 2019 and 2020, respectively.
In the current scenario, the demand for substation automation solutions is more in the wind industry; government organizations and power generation companies join hands to bring automation to wind farm projects.
In June 2019, General Electric (GE) signed a contract with DTEK to supply high-voltage equipment for the 150 kV central power distribution station and two 150/35/10 kV substations, which would ensure the transmission of electricity from the first stage of Prymorska wind farm (Zaporizhia region) to the Ukrainian power grid. The digital substation will be installed at the wind farm.
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How are Key Players Opening Frontiers for Future Growth?
Substation Automation Market such as BluWava-ai, Envelio, Novogrid, Grid4C, Solarify, Stem, Octopus Energy, Arcadia, Uplight, BBOXX, Autogrid, Origami Energy, Leap, Enervee, SparkMeter, Power Ledger, Electrify, Innowatts, SALT Energy - Micro-CHP Plants, Synthica Energy - Renewable Natural Gas, Gaia Wind - Small Wind Turbines, and VOLTA - Battery Backup Generators, among others, are adopting various marketing strategies such as new product launches, geographical expansion, merger and acquisitions, partnerships and collaboration to identify the interest of potential buyers and create a larger customer base. For instance,
Prominent players in the substation automation market are General Electric, SIEMENS AG, Eaton, Mitsubishi Electric Automation, CISCO, Emerson Electric Co., ABB, Schneider Electric, Rockwell Automation, Fuji Electric Co., Ltd., and Nari Group, among others.
Recent Developments:
| Report Attribute | Details |
|---|---|
| Growth Rate | CAGR of 6.7% from 2023 to 2033 |
| Market Value in 2023 | USD 29.12 billion |
| Market Value in 2033 | USD 55.69 billion |
| Base Year for Estimation | 2021 |
| Historical Data | 2018 to 2022 |
| Forecast Period | 2023 to 2033 |
| Quantitative Units | Revenue in USD Million and CAGR from 2023 to 2033 |
| Report Coverage | Revenue Forecast, Company Ranking, Competitive Landscape, Growth Factors, Trends, and Pricing Analysis |
| Segments Covered | Component, Site, Rated Voltage, Control System, Application, End-Use Industry, Region |
| Regions Covered | North America; Latin America; Europe; East Asia; South Asia & Pacific; Middle East and Africa (MEA) |
| Key Countries Profiled | USA, Canada, Brazil, Mexico, Germany, UK, France, Spain, Italy, China, Japan, South Korea, Malaysia, Singapore, Australia, New Zealand, GCC, South Africa, Israel |
| Key Companies Profiled | General Electric; SIEMENS AG; Eaton; Mitsubishi Electric Automation; CISCO; Emerson Electric Co.; ABB Group; Schneider Electric; Rockwell Automation; Fuji Electric Co., Ltd.; Nari Group; Toshiba Energy Systems & Solutions Corporation; Ingeteam; SAE-IT Systems GmbH & Co. KG; OHB System AG; ARTECHE; ZIV; Korenix Technology; TRC Companies Inc.; Aixotek Co. Ltd.; ENTEC Electric & Electronic |
| Report Customization & Pricing | Available upon Request |
The market is slated to attain USD 29.12 billion in 2023.
The market is expected to expand at a CAGR of 6.7% through 2033.
Surging investments in smart grid infrastructure and budding substation automation.
North America holds a notable market share.
Hardware is expected to ace the marketplace in future.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Component 5.1. Hardware 5.1.1. IEDs 5.1.2. Bay Controller 5.1.3. Feeder and Motor 5.1.4. Protection Relay 5.1.5. Tele controller / IECs 5.1.6. Circuit Breaker Control & Management 5.1.7. Line Differential 5.1.8. Others 5.2. Software 5.2.1. Data Visualization and Monitoring 5.2.2. Data Analysis 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Site 6.1. Process Level/ Electric Control Value (USD Million) 6.2. Bay Level 6.3. Substation Level 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Rated Voltage 7.1. Low Voltage 7.2. Medium Voltage 7.3. High Voltage 8. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Control System 8.1. SCADA Based 8.2. HMI Based 8.3. RI/O (Remote Input-Output) Based 9. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Application 9.1. Transmission Substation 9.2. Distribution Substation 10. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By End User 10.1. Commercial and Civic Power Utilities 10.2. Oil & Gas Terminals 10.3. Mining & Metallurgy 10.4. Manufacturing Unit 10.5. Railways 11. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 11.1. North America 11.2. Latin America 11.3. Western Europe 11.4. Eastern Europe 11.5. South Asia and Pacific 11.6. East Asia 11.7. Middle East and Africa 12. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14. Western Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 15. Eastern Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 16. South Asia and Pacific Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 17. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 18. Middle East and Africa Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 19. Key Countries Market Analysis 20. Market Structure Analysis 21. Competition Analysis 21.1. General Electric 21.2. SIEMENS AG 21.3. Eaton 21.4. Mitsubishi Electric Automation 21.5. CISCO 21.6. Emerson Electric Co. 21.7. ABB Group 21.8. Schneider Electric 21.9. Rockwell Automation 21.10. Fuji Electric Co., Ltd. 21.11. Nari Group 21.12. Toshiba Energy Systems & Solutions Corporation 21.13. Ingeteam 21.14. SAE-IT Systems GmbH & Co. KG 21.15. OHB System AG 21.16. ARTECHE 21.17. ZIV 21.18. Korenix Technology 21.19. TRC Companies Inc. 21.20. Aixotek Co. Ltd. 22. Assumptions & Acronyms Used 23. Research Methodology
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Substation Automation Market
