Automation and Instrumentation
North America Digital Substation Market estimated to grow at a CAGR of 6.33% during 2020-2025
North America Digital Substation Market size was valued at $1.56 billion in 2019, and it is estimated to grow at a CAGR of 6.33% during 2020-2025. The growth is mainly attributed to the increasing research and development activities to enhance system portfolios as well as to incorporate a versatile technological platform will positively influence the North America Digital substation industry. Replacement of conventional substations with digital technology act as digital substation automation system which set to propel the North America Digital Substation market.
Key Takeaways
- The U.S. dominated the North America Digital Substation market in term of revenue in 2019 owing to early adoption and high investments on advanced technologies
- Adoption of IoT technology has been pushing the North America Digital Substation industry as digital substation act as human machine interface system for IoT devices.
- Integration of Programmable logic controller with digital substation is set to drive the market growth.
- High initial investment compared to conventional substations becomes a major challenge and hampers the growth of the market.
Voltage - Segment Analysis
220kV-550Kv is the key voltage segment and grow at a CAGR of 6.87% during forecast period 2020-2025. This voltage range digital substation is used in various industries such as Power, utilities, mining and others. There has been development of advanced digital substations which can sustain at high power monitoring application. For instance, in 2020, ABB had installed 500 Kv digital substation. This substation enables Enel Green Power to deliver carbon electricity. This set to drive the market growth.
Industry - Segment Analysis
Utilities Industry is the fastest growing segment in North America Digital Substation market and estimated to grow at a CAGR of 7.12% during forecast period 2020-2025. Increase in adoption of IoT technology has been providing opportunities to install digital substations in this industry. Digital substation can be used to collect valuable data from the entire power grid. Increasing investments on smart grids is further propelling the market growth as there is significant advancements in grid automation technology.
Geography- Segment Analysis
The U.S. dominated the North America Digital Substation market in 2019 with a market share of 67.70%, followed by Canada and Mexico. Early adoption of advanced technologies and presence of large number of players such as General Electric, Siemens, Emerson Electric and others upsurge digital substation market in this region. In 2018, General Electric (GE) Power had launched new power equipment innovations at CIGRE including power transformers, intelligent digital substations, and others. High investments and introduction of its products at various international councils, exhibition centers, and seminars is poised to drive the market in this region.
Drivers –North America Digital Substation Market
- Replacement of conventional electrical substation with digital substations set to drive the market
With the adoption of advanced technologies, there has been increase in replacement of conventional electrical equipment with advanced equipment. Growing energy demand with rising expenditure towards development of high voltage electric networks and restoration of existing infrastructure have reinforced the North America digital substation market size. Additionally, increasing focus towards the replacement of prevailing electrical infrastructure and its subparts with upgraded high-quality systems will enhance the industry growth.
- Advancements in Technology
Adoption of Internet of Things (IoT) Technology in industries have been driving the digital substation market in North America. In power and utilities industry, there has been increase in adoption of digital substation which set to push the market. In 2019, Siemens had developed a digital substation to pilot IoT analytics and applications for power grids. This solution complies with the cybersecurity requirements, allowing end-to-end authentication and encryption based on certificates. Adoption of digital substation assists in increasing reliability, optimizing the efficiency and improving the security of the power grid which set to push the market growth. As digital technology is being integrated into the IoT, there has been high adoption of digital substations in industries, thereby driving the market.
Challenges – North America Digital Substation Market
- High initial investment
The initial investment for the digital substation is higher than that for a traditional substation setup owing to the use of advanced technologies such as intelligent electronic devices and high equipment purchase costs. Higher costs of hardware and software modules restrict the market growth. Additionally, cybersecurity is the major challenge in digital substation that hampers the growth of the market. However companies are focusing on developing digital substations with cyber security offerings which provide opportunities for the market during forecast period.
Market Landscape
Product Launches, Acquisitions, Collaboration and R&D activities are key strategies adopted by players in the North America Digital Substation market. North America Digital Substation major 10 companies include Schneider Electric, Emerson Electric, Cisco, Siemens AG, Igrid T&D (Thytronic Group), Tekvel, Honeywell International Inc, Eaton Corporation, General Electric, Fuji Electric and others.
Acquisitions/Technology Launches
- In February 2019, ABB and Intel had signed an agreement to collaborate on the marketing and selling of generation distribution automation systems and products for protection including digital substations for strengthening its position, thereby driving the market.
- In August 2018, Siemens had presented its digital substations at CIGRE (International Council on Large Electric Systems) 2018. Exhibiting its products in various international seminar and councils provide opportunities for the company, thereby increasing North America digital substation market share.
