Substation Market Size, Share and COVID-19 Impact Analysis, By Voltage (Low, Medium, and High), By Application (Transmission and Distribution), By End-user (Utilities and Industrial), and Regional Forecast, 2021-2028

The substation market size was USD 124.52 billion in 2020. The market is expected to grow from USD 128.25 billion in 2021 to USD 173.64 billion by 2028 at a growth rate of 4.4% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative impact on demand shock across all regions amid the pandemic. Based on our analysis, the global market will exhibit a decline of -4.0% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.

Substation is an electrical set-up having a high-voltage capacity and this set-up can be used to control the generators, circuits, and systems. The set-up is majorly used to convert AC to DC and is available in different sizes & voltage and also consists of an inbuilt transformer along with related switches. Some of the huge substations are built with different types of transformers, circuit breakers, switches, and other equipment.   

COVID-19 IMPACT

COVID-19 Pandemic Heavily Affects Power Projects

The COVID-19 pandemic has been spread across nearly every country around the world. Almost every industry vertical, from power generation and oil & gas to manufacturing, mining, railway, and construction. Governments across many countries imposed strict containment measures to control the spread of the COVID-19 pandemic. The power generation, transmission, and distribution segments have faced adverse impacts due to unprecedented situations.

The supply chain got disrupted and the governments also imposed travel bans, which disrupted raw material supply for the manufacturing industry. Various power transmission and distribution projects were halted due to nationwide lockdown and declining power demand from industrial and commercial sectors. Several upcoming projects were also halted and the industry also suffered from investment issues due to COVID-19.

LATEST TRENDS

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Growing Demand for Uninterrupted Power Supply Provides Growth Opportunity 

Power consumption in the majority part of the world has surged significantly in recent years. Robust economic development, increasing population, and rising establishment of industries have resulted in increased power consumption. The penetration of electrically powered equipment is also increasing worldwide. Several economies are witnessing increased power demand due to the development of new and expansion or existing energy infrastructure. Rapid urbanization, along with the rising living standard of people, increases the demand for uninterrupted electricity supply generation. To overcome the surging power demand, several countries are increasing their power generating capacity and grid investment for efficient transmission and distribution.

DRIVING FACTORS

Expansion of Micro-Grids Network to Propel Growth in Market

Micro-grids are expanding across the world as the investment in power grids networks is widely increasing. Governments are also keenly interested and constantly working for the grid expansion in several countries. The investment in cross-border grid networks is also increasing globally. The increasing power consumption increases the demand for network infrastructure for the transmission and distribution of electricity across the world. The investment in smart grids networks is also rapidly increasing across the world. The above factors are responsible for substation market growth during the forecast period.

Rising Retrofit and Refurbishment of Existing Grid Infrastructure Augmented Growth in Market

Several developing and developed countries across the world have started investing in refurbishment or replacement work in the existing power grid infrastructure. The aging infrastructure is increasing, which somehow disrupts the smooth and efficient operation of electrical systems. This increases the demand for electrical infrastructure retrofitting across various countries of the world. The refurbishment and retrofit of the existing infrastructure help extend the life of the infrastructure as well as help in achieving maximum efficiency.

RESTRAINING FACTORS

Higher Dependency on Import May Hinder the Growth of the Market

The transmission & distribution lines and towers include the use of raw materials such as cables, steel and alloys. These alloys are majorly imported by several nations across the world. The substations also involve high use of components, which are majorly imported by the majority of countries across the world. The high dependency on imports hinders the market growth as the import and export regulations fluctuate and this impacts the overall costing of such equipment.

SEGMENTATION

By Voltage Analysis

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Low Voltage Segment Dominated the Market in 2020

Based on voltage, the market is segmented into low, medium, and high. The low voltage segment dominated the market in 2020. The demand for low voltage systems is high due to rising electricity supply-demand from the residential or commercial sector. The population around the world is increasing along with the increasing penetration of electronics across the globe. This increases the demand for an uninterrupted power supply. Thus, it could drive the growth of the low voltage segment during the forecast period. In 2020, as per Central Electricity Authority, India added around 21.3 MVA capacity of 220 kV AC substations throughout the country. 

The medium segment is anticipated to record robust gains over 2021-2028. With urbanization and industrialization, the demand for higher voltage supply will increase across the industrial and commercial sectors. The number of data centers is also widely rising across the world. The prevailing trend could trigger the need for the medium voltage segment over the projected timeframe.

By Application Analysis

Distribution Segment Likely to Record Highest CAGR During 2021-2028

Based on application, the market share is broken down into transmission and distribution. The distribution segment is expected to hold a dominant market share through 2028. The electricity demand is soaring rapidly across the world and this could trigger the demand for smooth distribution networks across the globe. The expansion of existing energy infrastructure along with increasing demand for efficient electricity grids across several developing countries drives the growth of the distribution segment of this market during the forecast period.

The transmission segment is likely to witness growth at a significant pace during the forecast period. The demand for efficient transmission networks is increasing widely across several countries due to increasing power consumption from end-users and increasing installation of power grids across the world. The prevailing trends are likely to boost the demand for transmission systems during the forecast period. 

By End-user Analysis

Utilities Segment to Dominate the Market

Based on end-user, the market is segmented into utilities and industrial. The utilities segment dominated the market in 2020. The utilities segment is experiencing high demand with surging uninterrupted power supply and increasing installation of efficient power grids.

The industrial segment is likely to witness significant growth during the forecast period. The demand for uninterrupted electricity supply is widely increasing across the industrial sector due to rapid industrialization across developing countries. The paradigm shift from conventional vehicles to electric vehicles is also increasing the demand for smooth and efficient grids from transportation industries. This is likely to drive growth in the industrial segment in the coming years.

REGIONAL INSIGHTS

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Geographically, the worldwide substation market share is split into North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa.

In 2020, Asia Pacific region dominated the global market share and will continue to hold a notable share through 2028. The electricity demand is rapidly increasing in this region due to increasing population. Rapid urbanization and industrialization also increase the demand for an uninterrupted power supply. The investment in infrastructure development effective transmission and distribution systems is increasing across China, India, and Australia. Governments are increasing electricity generation within the region, which increases the demand for the installation of such systems. The surging capacity of renewable energy also increases the installation of such lines. In 2020, the region installed more than 55 GW of wind capacity.

North America is expected to contribute significantly during the forecast period. This region is experiencing high power consumption and high penetration of electronic equipment. This increases the demand for effective power grids along with transmission and distribution networks across the region. The replacement work for aging infrastructure is also going on in this region that drives the market growth during the forecast period.

Europe is likely to grow at a significant pace during the forecast period. This region is constantly expanding its electricity generation capacity due to increasing demand for uninterrupted power supply. The investment in power grid infrastructure is also increasing. The abovementioned factors lead to the expansion of market in Europe during the forecast period. 

The Middle East & Africa is expected to witness a significant CAGR during the forecast period. The governments in this region are highly focused on expanding the transmission and distribution infrastructure across the region. Industrialization is also increasing across this region, which further increases the product demand. The rising demand for such system drives growth in the Middle East & Africa during the forecast period.

The Latin America region is estimated to foresee growth during the forecast period. The demand for uninterrupted power supply is widely increasing within the region. The penetration of electronics is increasing rapidly within the region. Governments are highly investing in the expansion of power grids and such systems, which increases the establishment of a transmission network and drives growth in the region.   

KEY INDUSTRY PLAYERS

Key Players Increasing their Contracts and Updating their End-user and Products to Tap Markets

The global market is highly fragmented with the presence of leading market players across developed and emerging economies. Currently, Siemens, Hitachi ABB Power Grids, GE, Schneider Electric, Eaton, and L&T Electrical Automation dominate the market share. These market players are focusing on expanding their reach and focusing on securing new contracts. For instance,

• In 2020, GE announced it won a contract for a project in Benin. The contract is worth USD 47 million and the company will supply four substations, including gas-insulated switchgear (GIS) and seven substation extensions for the project.


• In 2021, L&T announced that the company has been awarded a contract to design and build a 132/11 kV electrical substation in Dubai. The company will also provide the associated cabling and infrastructure works.

LIST OF KEY COMPANIES PROFILED:

• GE (U.S.)


• NR Electric Co., Ltd. (China)


• Siemens (Germany)


• Hitachi ABB Power Grids (Switzerland)


• Schneider Electric (France)


• Eaton (Ireland)


• Efacec (Portugal)


• Rockwell Automation (U.S.)


• Emerson (U.S.)


• Belden (U.S.)


• L&T Electrical & Automation (India)


• Texas Instruments Incorporated (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• In December 2021 – Iberdrola, via its subsidiary Neoenergia, has been selected by the ANEEL to build a 500 kV substation in the Brazilian state of Minas Gerais. The company will construct and commission the 500 kV substation to be located in Ibiraci with an investment of over USD 113.15 million (Euro 100 million).  


• In November 2021– Burns & McDonnell has been awarded USD 15.84 million (Euro 14 million) by the National Grid for Engineering, Procurement, and Construction contract for the design, installation, supply, and commissioning of a 400 kV GIS substation in Suffolk.

REPORT COVERAGE

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The substation market research report includes a detailed industry analysis and focuses on key aspects such as leading companies, end-user, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several drivers that have contributed to the growth of the market in recent years.

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