Substation Automation Market Worth $185.80 Billion By 2024

· Substation automation system comprises of hardware and software components used to control or monitor an electrical system, remotely as well as locally. This system helps in improving the overall efficiency and productivity by automating the repetitive, tedious and error-prone activities involved in the operation. Modern substations make use of intelligent electronic devices (IEDs) to collect and record different parameters on the system, as well as make decisions and act on abnormal situations. Additionally, the presence of SCADA and Human Machine Interface (HMI) have immensely helped in advancing substation automation systems across various industries.

· Major factors that are aiding the industry growth for substation automation systems are the growing requirement for operational efficiency, improvements in quality and increased production, as well as the ease of monitoring and controlling the industrial process. Adoption of smart grid technology has increased the scope for SCADA systems, with many utility companies undertaking partnerships with distribution management systems companies to improve their grid network operations. According to the IEA, global smart grid investments grew by 10% in 2018, and their high demand is expected to increase deployment of substation automation systems in the coming years.

· The substation automation industry comprises of various components such as recloser controller, PLC, capacitor bank controller, smart meter, load tap controller, communication channel and digital relays, among others. The PLC (programmable logic controller) segment is anticipated to account for a substantial market share in the coming years, on account of its various applications in the industry such as automatic switching, voltage regulation, protection and control, and automation system diagnostics. Another segment that is expected to show enhanced growth is communication channels, which is a critical component for passing on the data generated by IEDs and monitoring components of the substation to the utility data center that is located remotely.

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· In terms of module, the substation automation market is classified into SCADA, IEDs and communication network. The SCADA segment is anticipated to witness high growth in the next 4–5 years, as the smart grid technology continues to improve and advance the reliability, sustainability and efficiency of existing power systems. Modern SCADA systems have become highly adept at large amounts of data required to monitor every power line, cable and equipment. The IED segment has also contributed significantly to the market growth, and in the coming years, the high voltage requirements at commercial establishments for operating machines and equipment is anticipated to boost the segment further.

· Based on communication channel, the substation automation market is segmented into ethernet, power line communication, copper wire communication and optical fiber communication. Although the copper wire communication segment accounted for more than 40% of the market in 2015, it has ceded ground to other advanced communication platforms such as ethernet and optical fiber, with the latter offering advantages such as immunity to EMI/RFI, secure data communications, as well as higher bandwidth supporting high data rates over long distance. Huge investments in telecommunication and IT by regional governments are aiding the market growth.

· Europe and Asia Pacific are anticipated to account for the lion’s share of the global market in the coming years. Western European economies such as the UK, France and Germany, among others, have shown high demand for smart grid solutions, thus positively affecting the regional market. With respect to Asia Pacific, the demand for substation automation is anticipated to grow steadily, on account of favorable government initiatives in major economies such as India, China and Japan, as well as the continued growth in the manufacturing sector, with the region becoming a focal point for the utilities sector. The United States accounts for a significant share in the market revenue, with Energy.gov stating that smart grid investments in the country are expected to rise to USD 13.8 billion by 2024.

Recent Developments

· L&T Construction’s power transmission and distribution business recently received multiple orders in India, as well as certain Middle-eastern and African economies, in April 2020. The company received an order from Kuwait regarding the upgradation of substations and related power facilities in KNPC’s Mina Al Ahmadi oil refinery. Additionally, it received an order from Oman for a 400 kV Grid Station, an order from Egypt for the designing, supply, construction and commissioning of a 220 kV Gas Insulated Substation. With respect to India, the company has received order to strengthen the urban HT distribution network in Chennai, along with establishment of unmanned 33 kV Gas Insulated Substations at select locations.

· In February 2020, Eaton acquired Power Distribution, Inc., which is a leading supplier of mission critical power distribution, static switching, and power monitoring equipment and services for data centers, as well as industrial and commercial customers. This is expected to increase the company’s footprint in the region, while also expanding their customer base. Such mergers and acquisitions, along with advanced technological developments, are anticipated to expedite market growth for substation automation.

· In February 2020, ABB installed the first 500 kV digital substation at Brazil’s Enel Green Power, with the objective to deliver emission-free solar power to the country’s 500 kilovolt (kV) transmission network from the São Gonçalo solar photovoltaic (PV) plant, the largest solar PV in South America, which is located in north-east Brazil. This is expected to enable Enel Green Power to digitalize its assets operations and processes to improve energy efficiency, lower maintenance costs and increase use of sustainable solutions. This is another important aspect aiding growth of the substation automation industry.