Global Digital Substation Market - 2022-2029

Global Digital Substation Market - 2022-2029

Market Overview

The global digital substation market size was worth US$ XX million in 2021 and is estimated to show significant growth by reaching up to US$ XX million by 2029, growing at a CAGR of XX% during the forecast period (2022-2029).

A digital substation is an electrical substation that converts analog measurement data and binary status information into digital data. The process makes it easier to transmit between different devices and substations in real-time intervals, making the data better utilized and processed. The introduction of communication standard IC 61850 protocol in 2019 and the advancement of automation technology increased the need for a stable and efficient transmission network, which has led to the rise in the adoption of digital substations.

The power generations in modern times are becoming increasingly dynamic as there are increasingly diverse power sources, which makes the grid react to the unpredictable generation of power. It can be avoided by using digital substations, which utilize the digital for energy conversion.

Market Dynamics

The low cost of ownership majorly drives the global digital substation market through asset monitoring and optimized grid operation, with increased system awareness and proactive monitoring of demand, thereby making the system more resilient. Moreover, other factors such as reduced engineering work improved the safety of the workforce and easier & faster testing and commissioning are some driving factors for the market in the upcoming years.

Reduction in operational cost and initial investment

Commissioning a digital substation reduces operational costs, which aids in the market’s growth during the forecast period. For instance, a digital substation reduces the use of copper signal cable, which directly impacts the investment needed to set up a digital substation. It is fitted with fiber optic cables instead of copper wires, reducing the carbon footprint by 50% resulting in a lower impact on the environment.

The room size is 30% less than the conventional substation, positively impacting the digital substation's operational costs. Additionally, the prevalence of IIoT (Industrial Internet of Things), specifically in energy sectors, leads to the adoption of smart grid components, enhancing operational ability as they are more reliable and sustainable. Thus, it helps obtain a longer system life cycle and optimal use of resources coupled with higher efficiency.

Increased safety and cybersecurity during the implementation of digital substation

The growing need to implement a high-security transmission network is a major driving factor for the market in the upcoming years. The implementation of a digital substation protects the workforce from the high voltage equipment and wires as they are now digitalized, and the use of the optic fibers eliminates the electrical connection between high voltage equipment and protection and control equipment which thereby reduces the risk of electrocution and increasing the safety of the personnel. Furthermore, cybersecurity issues such as cyber-attack from external systems are a major threat in many countries across the globe, a fully optimized digital substation integration of systems without having any devastating effect on security issues across its communication network.

Lack of skilled labor hampers the growth of the market

Due to the paradigm shift from the traditional substations to digital substations, the technology requires a skilled labor force that might go beyond IEC 61850 standard. It also requires strong domain knowledge of network infrastructure, cyber security, and other technologies involved in using the digital substation. Furthermore, a digital substation requires frequent maintenance to maintain the substation working for a long period.

COVID-19 Impact Analysis

Various industries have witnessed a decline in revenue generation, whether transportation, mining, or oil & gas. All the industries were closed during the lockdown prevailing due to COVID-19. Thus, it negatively impacts the market's growth in that particular period. Mining workers were also unavailable. The mining industry was closed during the lockdown period, retarded the market's growth. The restrictions around the world regarding travel have forced many industries to adapt to their daily operations to manage the personnel's safety, including hygiene, testing, face coverings, and physical separation.

Emerging economies such as China and India have also witnessed lockdown, which has impacted many small and medium enterprises as they were closed during the lockdown period. Furthermore, workers were not available, which has declined the market's growth during the forecast period.

Segment Analysis

The global digital substation market is segmented on module, usage, voltage, end-user and region.

Need to replace the old aging system of the conventional energy distributions system to augment the growth of the market during the forecast period

The global digital substation market is bifurcated into hardware, fiber optic communications network, and SCADA (Supervisory Control and Data Acquisition). Out of the mentioned list, the hardware is the largest segment in terms of revenue. However, the fiber optic communications network is expected to witness the highest growth rate during the forecast period.

The hardware segment includes various components such as transformers, earth devices, isolators, bus bars, protection devices and interfacing units. Transformers are the most crucial part of the hardware segment. They are primarily deployed in the substation to lower voltage from high to low to be delivered in either overhead or underground line to the customer. Various new technologies are used in the transformer to evolve the distribution system process, and the latest technology is an optical transformer. The optical transformers use optical sensors to realize the current and voltage in the high voltage substation line. Thus, the ongoing development in the transformer to make it technologically advanced and developed is having a positive impact on the segment's growth during the forecast period.

Geographical Analysis

The high adoption of digital substations in developed nations is a major driving for the market in the region.

North America is expected to hold the highest market share due to the increased adoption of digital substations, coupled with the well-established infrastructure for the development of the digital substation. Furthermore, rising industrial and commercial development in the region, coupled with the replacement of the old aging infrastructure of the digital substation, would augment the growth of the market in the region. Furthermore, new product launches and initiatives are also prevalent in the US, crucial for the market's growth.

For instance, LF Energy, a Linux Foundation with the collaboration GE Renewable Energy, Schneider Electric, RTE, Alliander June 2020, has launched a project to accelerate the creation of the electrical grid for future use. Thus, this kind of future project attracts investment, creating an opportunity for the investor to gain the advantage of future projects by investing and expanding its product portfolio.

The Asia-Pacific is expected to witness the highest growth rate during the forecast period due to the rising energy demand in commercial sectors in India and China. Furthermore, many companies are looking to increase their business operation in the emerging nations of the Asia-Pacific, which is also a prominent factor that is augmenting the market's growth. For instance, ABB April 2022 has inaugurated digital substation products and digital systems factory in Vadodara, Gujarat. The company's purpose is to expand its product portfolio in the digital substation market in India, which complements the growth of the market.

Competitive Landscape

The digital substation market is highly competitive with the presence of local and global companies. Some of the key players contributing to the market's growth include ABB, General Electric Company, Siemens AG, Eaton Corporation Inc., Schneider Electric SE, Honeywell International Inc., Cisco System, NR Electric Co. Ltd., Emerson Electric Co., Larsen & Toubro Limited, Hitachi Energy Ltd. and among others.

The major players adopt several growth strategies such as product launches, acquisitions, and collaborations, contributing to the global digital substation market. However, the key players follow collaboration and acquisition as the growth strategy.

For instance, in November 2021, GE and ISA CTEEP have recently commissioned a new digital substation in Sao Paulo, Brazil. It is built using fiber optic cables and uses 30% smaller space than the conventional substations.

In September 2021, GE commissioned a fully digital high voltage substation in Dakar, Senegal. It is a 225 VK substation used for the transmission and distribution of electricity. The company is expanding its operations of digital substations in Africa.

ABB

Overview: ABB is a multinational company headquartered in Zurich, Switzerland and operates in the segment such as power, heavy electrical equipment, robotics and automation technology areas. It caters to several industrial sectors such as aluminum, automotive, buildings, infrastructure, and cement. Channel partners. Chemical, data centers. Food and beverage. Process automation marine, railway, metals, mining, oil and gas, etc. It is also listed on the SIX Swiss Exchange in Zürich, Nasdaq Stockholm and the New York Stock Exchange.

Product Portfolio: Configurable Product includes various variants such as REX640, T5N 630, REF620, 615, 611 and SSC600. Protection relays, Relion, Software product, Communication devices, Arc fault protection and Test switch and accessories

Key Development: In May 2021, ABB and UK Power Networks (UKPN) agreed to form a new digital substation protection and control project that enables more renewables to be integrated into the grid. It will enable substations to analyze millions of data points and automatically reconfigure the network.

Why Purchase the Report?

Visualize the digital substation market segmentation by module, usage, voltage, end-user and region to highlight key commercial assets and players.

Identify commercial opportunities in the digital substation market by analyzing trends and co-development deals.

Excel data sheet with thousands of digital substation market-level 4/5 segmentation points.

PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.

Product mapping in excel for the key product of all major market players

The global digital substation market report would provide approximately 76 market data tables, 80 figures and 244 pages.

Target Audience 2022

Service Providers/ Buyers

Industry Investors/Investment Bankers

Education & Research Institutes

Research Professionals

Emerging Companies

Manufacturers