The industry of substation automation, involving a multitude of devices, technologies, and business models requiring skilled product selection, implementation, interoperability, and engineering, is burgeoning. Committed Smart Grid nations are prioritizing their efforts to revitalize their decaying electric infrastructure by investing in critical upgrades to their substations and ensuring these structures can be seamlessly connected to the Smart Grid.
SBI Energy report “Global Smart Substation Products Market” examines the avid worldwide interest in smart substation development, including the market size, scope of the products and the uneven pace at which nations are adopting the different substation automation architectures.
A wide range of products and technologies are available to automate substation processes and controls. Through primary research findings, SBI Energy counts approximately 2,200 new conventional substations per year from 2006-2010 worldwide, disproportionately distributed across the globe. Growth is expected to sputter altogether as new conventional substation construction projects continue to wane in favor of upgrades to established substations. By 2015, expect the total number of conventional substations to increase by only 8,000 globally to a high in excess of 228,650.
“Because the substation industry has approached standardization of protocols, products, and processes in a highly fractionated manner, many nations have neither yet adopted standards for communication protocols nor implemented requirements for the manufacturing and installation of substation products and technologies,” explains Darren Bosik, SBI Energy analyst, referring to the disparate proliferation of smart substation upgrades globally.
Upgrades to established substations are accelerating in countries such as the U.S., U.K., France, Japan, and China as their smart substation initiatives begin to ramp up. This trend toward substation automation affects the growth in smart substation products sales based on three dominant design markets: Retrofit, New, and Future.
Retrofitting established substations architecture involves installation of modernized communication protocols, IEDs, and operating standards, to established substation designs. In the retrofit model, emphasis is placed on using wireless and fiber communication when adding new equipment.
New substation design approach involves the purchase and use of best-of-breed smart substation apparatus for monitoring and control of electricity and integration into the Smart Grid. It assumes a new layout of substation equipment that leverages innovative options for merging the established power grid to the infrastructure required for monitoring and control.
Future field automated substation design leverages next-generation tools, technologies and protocols for efficient integration to Smart Grid infrastructures. Two technologies gaining momentum in this approach are High Temperature Superconductors (HTS) and Solid State Transformers (SST).
The collective market for the three substation automation systems designs is expected to be $90 billion by 2015. Each substation upgrade selects products for the system utility. For this reason SBI Energy additionally presents market projections in four product sectors, Integrated Communications; Control and Protection Products; T&D Monitoring and Control Systems; and, Improved Interfaces and Decision Support. Each product sector breaks out specific tools and technologies markets to provide detailed analysis and sizing. The collective market for substation automation products segments is estimated to be $105 billion by 2015.
Other key findings in Global Smart Substation Products Market include:
• The global market size for substation automation products is forecast to reach nearly $106 billion by 2015. Many factors are driving the market growth but the most predominant forces are the aging grid infrastructure, the influence of product marketers to provide multifunctional solutions that comply with strict communication protocols, and advancing technologies required to keep pace with electricity demand.
• The average cost per substation automation initiative will grow at a much slower rate for the period 2011 to 2015 as regions lock in long-term contracts with suppliers and the cost of manufacturing goods sold also drops, especially in commodity product categories such as telecommunications.
• Asia maintains the greatest number of substations available for automation worldwide, with a 53% share in 2011. The bulk of Asia’s smart substation spending, however, is concentrated on control/protection products and monitoring/recording products.
• Much of Europe’s focus on substation upgrades will be in retrofit of communication networks and SBI Energy expects that sector to realize upwards of a 10% CAGR for the five year period ending 2015 when sales will reach $7.2 billion.
• The U.S. will ease its investment in nearly all of the substation product categories, most notably monitoring/recording products where the market value will drop to $6.8 billion by 2020 from $11.2 billion in 2016.
Darren Bosik is a veteran SBI Energy analyst and business journalist with more than 15 years of related experience. He has written a multitude of in-depth, data-intensive research reports that have impacted the business decisions of corporate leaders at Fortune500 companies in many industries, including energy and renewable resources,technology, manufacturing, financial services, and e-commerce.
Global Substation Automation Products Market features extended forecasts to 2020. For more information please see the website.