Digital Substation Market

Global Industry Analysis (2018 - 2021) - Growth Trends and Market Forecast (2022 - 2029)

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Industry: Energy & Natural Resources

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The global digital substation market is poised to chart a stellar growth trajectory in the coming years. Over the recent past, the demand for digital substations has witnessed an exponential increase owing to their importance in renewable energy projects and building smart grid infrastructures. Digital substations help to create a more efficient, secure, and intelligent electricity system by collecting valuable data from the entire power grid infrastructure. Essentially, a digital substation converts binary status and analog measured data into digital data, simplifying real-time data transmission between devices and substations. It also aids in ensuring greater safety and self-reliance within modern energy systems, while reducing the risks, costs, and environmental hazards associated with conventional substations.

Today, digital substations are indispensable to meet sustainable development goals. Consequently, the global digital substation market is set to garner novel business opportunities in the near future. Favorable government regulations, rising power demand, high investments in developing smart cities, and huge demand to replace traditional substations have emerged as the foremost growth drivers in the digital substation market. Moreover, strong global commitments to decarbonize, digitalize, and distribute energy systems have magnified international interests in renewable energy, and subsequently, opened fresh revenue streams in the digital substation market.

Robust Deployment of Smart Energy Solutions Creates High Demand for Digital Substations

The essence of smart cities lies in reimagining the citizen experience through an intelligent lens. Since energy generation, distribution, and transmission in smart cities is carried out through advanced technology, digital substations have become an integral element of the smart city infrastructure. In the past, utilities depended on workers to examine, operate, and manage electrical grids, however, the adoption of smart meters and smart grids has transformed the power industry. The smart electricity system requires every device in the substation to communicate in real-time through digital signals – the foremost factor necessitating the shift to digital substations.

A digital substation is connected with fiber-optic communication networks, facilitating easier data transmission and system monitoring, while improving system reliability and workforce safety. Given the benefits of modern energy systems, countries are rapidly progressing towards smart energy solutions. By 2030, smart grids and digital investments are expected to account for nearly 40% of the total electricity grid investments. These developments bode extremely well for the global digital substation market. During the forecast period, the fast-paced adoption of smart grids, smart meters, and novel energy transmission technologies is poised to significantly increase the demand for digital substations.

Strong Commitments Towards Renewable Energy Opens Fresh Growth Opportunities

Globally, renewable energy has emerged as an essential force to build sustainable and self-reliant cities. Environmental concerns and depleting fossil fuels have accelerated the drive towards renewable energy projects. By the end of 2026, renewable energy capacity is expected to exponentially rise, accounting for around 95% of the increase in the global power capacity. Strategic collaborations, cost competitiveness, green innovation, and change in consumer behavior are the primary growth drivers of the renewable energy industry. Owing to these factors, the global renewable electricity capacity is projected to rise by over 60% in the next four years. This fast-maturing interest in renewable energy is predicted to create favorable outcomes for the digital substation market. Digital substations can operate with smaller control rooms, thus helping to reduce substation footprint. Over the assessment period, the adoption of digital substations to better develop and implement renewable energy schemes is set to foster lucrative business opportunities, public-private partnerships, and rigorous innovation within the digital substation market.

Digital Substations Set to Generate Sound Commercial Value; Utilities Segment to Hold Largest Market Share

Nations from both developed and emerging economies consistently roll out promising policies to transform their energy ecosystems along the digital curve. In 2015, India launched the National Smart Grid Mission, mobilizing investments worth USD 300 million to advance its smart grid deployment. In 2020, the State Grid Corporation of China shared plans to invest USD 3.5 billion to digitalize its infrastructure. Whereas, by 2035, the United States envisions building a more resilient electricity transmission system to realize its goal of carbon-free electricity generation. As more and more countries advance towards smart energy technologies, the need to shift away from conventional substations will intensify in the upcoming years.

In these contexts, the global digital substation market is expected to witness intense expansion throughout the study period. Notably, based on end-use, the utilities segment will maintain its dominance by accounting for the largest market share over the forecast period. Further, as per type, the digital substation market is set to record considerable growth in the transmission segment. Despite this sound market scenario, the digital substation market is anticipated to face challenges owing to high initial set-up costs. However, key players in the market are poised to capitalize on the transition to digital substations, and subsequently over market restrictions, by engaging in competitive quotations and high-value mergers and acquisitions.

Product Innovation, Strategic Partnerships Create a Fierce Competitive Landscape

Leading market players in the global digital substation market are aggressively pursuing joint partnerships and open innovation to create headways for phenomenal growth. In February 2020, renewable energy generator Enel Green Power along with ABB set to install the world’s first digital substation for 500 kV alternating current rating in Brazil. In February 2021, Hitachi ABB Power Grids launched its Smart Digital Substation, a digital substation embedded with advanced analytics capabilities. Moreover, in November 2021, General Electric commissioned the first digital substation in the public power grid connected to Brazil’s National Interconnected System.

North America, particularly the U.S. and Canada, is projected to dominate the global digital substation market. Presence of well-established market players, promising outlook towards renewable energy, rigorous R&D initiatives, and government support are expected to expand the digital substation market of North America. Interestingly, the digital substation market of Asia Pacific is predicted to garner the highest growth rate over the forecast period. Market growth is expected to be more pronounced in India, China, and Singapore as they are rapidly revolutionizing their smart city infrastructures to create more efficient and sustainable energy systems. Asia Pacific is also in a phase of robust privatization which works in favor of its digital substation market.

Major players in the global digital substation market include General Electric, ABB, Honeywell International Inc., Siemens AG, Schneider Electric SE, Eaton Corporation Inc., NR Electric, Larsen & Toubro Limited, and Emerson Electric Co. among others.

Global Digital Substation Market is Segmented as Below:

By Module

  • Hardware
  • Fiber-optic Communication Networks
  • SCADA Systems

By Type

  • Transmission Substation
  • Distribution Substation

By Installation Type

  • New Installations
  • Retrofit Installations

By Voltage

  • Up to 220kV
  • 220-500kV
  • Above 500kV

By Industry

  • Utility
  • Heavy Industries
  • Transportation
  • Others

By Region

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • U.K.
    • Germany
    • Italy
    • France
  • APAC
    • China
    • India
    • Singapore
    • Japan
    • South Korea

Key Elements Included In The Study: Global Digital Substation Market

  • Digital Substation Market by Product/Technology/Grade, Application/End-user, and Region
  • Executive Summary (Opportunity Analysis and Key Trends)
  • Historical Market Size and Estimates, Value, 2018 - 2021
  • Market Value at Regional and Country Level, 2022 - 2029
  • Market Dynamics and Economic Overview
  • Market Size in Value, Growth Rates, and Forecast Figures, 2022 - 2029
  • Competitive Intelligence with Financials, Key Developments, and Portfolio of Leading Companies 
  • Regional and Product/Grade/Application/End-user Price Trends Analysis
  • Value Chain and Five Force’s Analysis
  • Regional/Sub-region/Country Market Size and Trend Analysis
  • Company Market Share Analysis and Key Player Profiles

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