The size of the global substation automation market was worth USD 43 billion in 2023. The global market is anticipated to grow at a CAGR of 6.05% from 2024 to 2032 and be worth USD 73.69 billion by 2032 from USD 45.43 billion in 2024.
It uses advanced technology to save operating and maintenance costs while increasing plant output. Additionally, it guarantees the electrical power network's excellent performance, dependability, and safety when executing load-shedding and intelligent interlocking operations. Smart grids offer numerous benefits, including reduced energy losses, improved reliability, and cost-effective energy demand management, leading to significant global investments in their development.
The rising population and electricity demand are favorable for the expansion of the substation automation market size. Electricity has become important in daily living. Three-fourths of the power consumption is accounted for by residential, commercial, and industrial consumers. In the residential sector, lights, water heating, electronics, appliances, and space heating and cooling are the top single uses of electricity. The growth in air conditioners, fans, and coolers during the hot summer afternoons drives up demand for power in the residential sector. The commercial sector includes public and private organizations, facilities and equipment that provide services, and government agencies. The business sector typically consumes electricity primarily for lighting, heating, ventilation, and air conditioning.
The capital-intensive nature of the substation automation process in its first phase might potentially impede the growth of the worldwide substation automation market. The cost of purchasing these substations has grown due to the growing demand to implant several IEDs in them, as well as the growing usage of modern technology like microprocessors and service-oriented architecture (SOA). Furthermore, strict governance, substantial process change, and strong cooperation across traditional organizational boundaries are necessary for the successful implementation of smart substations. Exorbitant expenditures required for the successful implementation of smart substations may increase the fiscal load on governments. For utility companies, high post-deployment operating and maintenance expenses are another major challenge.
In smart cities, the smart electric substation plays a more important function than the conventional one. Substation automation has several advantages, including higher utilization of the infrastructure in smart cities, improved worker safety, early defect detection and fast diagnostics, and increased dependability.
Additionally, the businesses are working together to digitize and data-drivenly transform the grid to achieve carbon neutrality. For example, Enedis, Capgemini, and Minsait have joined the Edge for Smart Secondary Substations alliance. It was established to create a standardized, adaptable, controllable, and interoperable platform for the next generation of smart grids.
The substation automation market is facing challenges due to the absence of standard protocols and interoperability frameworks. This is across different manufacturers and systems. Moreover, it leads to compatibility issues and vendor lock-in, which restrict the scalability and flexibility of substation automation solutions.
Another factor hindering the market growth is the lack of cybersecurity operations. The increased digitization of power substations has led to a risk of cyber threats and attacks. Thus making these systems vulnerable to cybersecurity breaches. Additionally, utilities must comply with grid power quality and data reporting standards to meet regulatory compliance. This can be challenging and necessitates automation solutions to avoid penalties.
COVID-19 severely impacted the substation automation market. It has disrupted the supply chains, delayed project timelines, and affected investments in power infrastructure. This led to a slowdown in market growth. Moreover, the pandemic also highlighted the importance of digitalization and automation in the power sector. It caused an increased focus on substation automation solutions to improve grid efficiency and reliability. Furthermore, it accelerated the adoption of remote monitoring and control solutions. This enabled the utilities to manage their assets and operations remotely. Therefore, it resulted in a decline in the revenue of major products and solution providers such as Cisco and Schneider Electric.
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REPORT METRIC |
DETAILS |
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Market Size Available |
2023 to 2032 |
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Base Year |
2023 |
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Forecast Period |
2024 to 2032 |
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CAGR |
6.05% |
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Segments Covered |
By Offering, Type, Installation Type, End-user Industry, Component, Communication, and Region. |
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Various Analyses Covered |
Global, Regional, & Country Level Analysis; Segment-Level Analysis, DROC, PESTLE Analysis, Porter’s Five Forces Analysis, Competitive Landscape, Analyst Overview of Investment Opportunities |
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Regions Covered |
North America, Europe, APAC, Latin America, Middle East & Africa |
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Market Leaders Profiled |
Hitachi ABB Power Grids, Siemens Energy, General Electric, Cisco, Schneider Electric, Eaton Corporation, Giza Systems, Honeywell, Schweitzer Engineering Laboratories, NovaTech Automation, CG Power and Industrial Solutions, and Others. |
The hardware segment held the majority portion of the global substation automation market share. The market is expected to develop because of the release of the IEC 61850 standard for substations, which makes it easier for intelligent electronic devices (IEDs) to communicate with one another and allows for the integration of all control, measurement, and monitoring functions into a single protocol. The growing requirement to adapt traditional substations with contemporary monitoring and control features is another factor driving the demand for substation automation systems.
The distribution substations segment is expected to lead under this category. The rise of smart grids is being driven by the need for more efficient distribution of energy, a reduction in operating and management expenses of energy, and, eventually, a reduction in consumer energy bills. Furthermore, advances in substation automation and increased integration are propelling the development of smart grids in the sphere of renewable energy sources.
The new installations segment is anticipated to increase at the fastest pace in the substation automation market. The demand for new power plants and smart grids across various industries is expected to grow at a high compound annual growth rate (CAGR) in the substation automation market for new installations. Additionally, the need for automation, intelligent energy devices (IEDs), advanced communication technologies, HMIs, and SCADA systems is expected to grow steadily. In addition, new systems need less maintenance and provide increased operating safety and dependability. To increase power flow, improve electric reliability, improve the quality of energy supply, and modernize the power infrastructure, leading corporations have launched a number of new installation projects into the market.
The utilities segment is the biggest category of the substation automation market. The rise in the market may be ascribed to the expanding efforts by the government to modernize power infrastructure and the growing investments in the production of electricity from renewable sources. The wind sector is currently seeing a greater need for substation automation solutions; government agencies and electricity providers are collaborating to use automation in wind farm projects.
The SCADA systems segment is predicted to witness considerable progress during the forecast period. This is due to enhanced utilization, higher customer satisfaction, and increased dependability observed upon its installation across various sectors. The use of SCADA systems is growing in key industries, including manufacturing, energy, oil and gas, recycling, transportation, water and wastewater, and food and beverage.
The biggest market share of substation automation was held by the copper wire communication category for a number of reasons. The dependable and secure data transfer provided by copper wire connection is essential for the efficient functioning of substation automation systems. In addition, the power industry has long relied on copper wire communication due to its resilience to electromagnetic interference. For substation automation, this has made it the go-to option, particularly in locations where wireless connectivity could be less dependable.
Asia Pacific is anticipated to register a higher CAGR during the forecast period. The APAC market is expanding as a result of several measures implemented by various governments to enhance the power and energy sector. Numerous initiatives have been introduced by the Indian government to electrify communities and revitalize electricity distribution companies. The Indian government is implementing the nation's smart infrastructure strategy. The digitalization of the grid is a component of the smart power infrastructure that aids in the continuous distribution of electricity to end users in the commercial, residential, and industrial sectors. Likewise, nations like South Korea and Indonesia are funding grid upgrading initiatives.
North America is anticipated to grow at the fastest rate. The rapid acceptance and popularity of sophisticated, intelligent electronic devices and communication technologies are expected to make it the biggest market. Also, countries like the United States and Canada are benefiting from this as the industry grows and technology in the electrical area advances. Moreover, due to rising urbanization and energy demand, regional governments will spend more on energy infrastructure. Thus, it is one of the key factors predicted to propel the expansion of the Substation Automation Market in the region.
Europe is estimated to propel at a significant pace in the substation automation market. The growing use of renewable energy sources is driving up demand for substation automation (SA) technology. This can be attributed to the energy system becoming more decentralized and less carbon-intensive. In addition, it is gaining importance due to European Union policy pressure, decentralization, and reduced carbon emissions as a method for managing the complexity of the energy system. Moreover, the rising use of renewable energy sources such as wind and solar power has raised the need for substation automation technology by creating a greater requirement for effective grid integration and administration. Furthermore, the demand for substation automation solutions is driven by the massive change in the European power industry from centralized generation to a more dynamic and flexible grid.
Latin America's substation automation market is expected to increase considerably due to the rising demand for hybrid and electric cars. Also, the growing usage of digital technologies in smart cities to improve grid efficiency is driving the regional market. Moreover, the energy system is becoming more decentralized and decarbonized, which is driving up demand for substation automation technology. This is because of the rising renewable energy sources in LA.
Middle East and Africa are anticipated to have significant growth potential in the substation automation market. The rise could be due to the growing popularity of electric cars and continuous developments in gearbox technology. However, there are up-front costs associated with the deployment of these systems. It includes integration, hardware, software, and communication infrastructure expenses. This might be a problem for small and medium-sized utilities with tight budgets.
Companies playing a prominent role in the global substation automation market include Hitachi ABB Power Grids, Siemens Energy, General Electric, Cisco, Schneider Electric, Eaton Corporation, Giza Systems, Honeywell, Schweitzer Engineering Laboratories, NovaTech Automation, CG Power and Industrial Solutions, and Others.
By Offering
By Type
By Installation Type
By End-user Industry
By Component
By Communication
By Region
Frequently Asked Questions
The Global Substation Automation Market is expected to grow with a CAGR of 6.05% between 2024-2032.
The Global Substation Automation Market size is expected to reach a revised size of US$ 72.69 billion by 2032.
Cisco, Schneider Electric, and Eaton Corporation are the three Power Plant Control System Market key players.
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