The substation automation market size was valued at USD 114.0 billion in 2015 and is expected to witness a significant growth over the forecast period, owing to the rising penetration in the industry to automate and efficiently analyze the substation data. There is an increased focus on distribution and transmission investments to address the distressed and aging infrastructure. Moreover, utilities are employing a greater emphasis on real-time, enterprise extensive information to secure accurate information, boost reliability, and to better manage assets and information, driving the industry growth.
Asia Pacific Substation Automation Market Revenue by Component, 2014 - 2024 (USD Billion)
Increasing developments, such as advanced SCADA and communication technologies, are driving the substation automation market. The communication channel is an integral part of the substation automation as all the IEDs and monitoring devices which are located at the substation and on the field generate data that has to be passed on to the utility data center, which is remotely located.
However, the lack of interoperability and global standards are restricting the industry growth. Manufacturers in the industry are increasingly focusing on building common standards to eliminate the issue. For instance, companies such as ABB Ltd. are playing a significant role in the standardization of IEC 61850.
The communication channel component dominated the industry in 2015, accounting for over 27.1% of the overall market share. Communication schemes have been increasingly rectified and designed into the substation by the utilities to integrate IDEs and capitalize on control, protection, metering, and fault recording functions are available in digital devices.
Programmable Logic Controllers (PLCs) accounted for a revenue share of over 14% in 2015 and are anticipated to witness a significant growth in future. The manufacturers of PLCs are increasingly developing new products to meet the requirements of SCADA and substation automation applications. Furthermore, they are cost competitive with the traditional RTUs and have benefits in the substation automation and its applications. Applications of PLCs, such as protection and control, automatic switching, voltage regulation, automation system diagnostics, and remote control, are expected to increase the industry demand.
The SCADA segment is expected to witness a significant growth at a CAGR of nearly 9% over the forecast period. Technological advancements in the sensor technology, MCUs, and alarm management systems are anticipated to improve the overall communication system, thereby increasing the demand across the industry.
The energy and power sector has become incompetent owing to increased dependability and regulations. However, escalating adoption of SCADA systems is anticipated to drive demand for flexibility in investigating the infrastructure. Moreover, these systems supervise and control the power generation & transmission and improve the overall efficiency.
Furthermore, IEDs contributed significantly to the overall industry and dominated the market with the revenue share of over 75% in 2015, owing to the upcoming deployment across the power sector. The increasing demand for a high voltage across commercial buildings and industries to operate machines is rapidly boosting the requirement for IEDs to reduce losses during distribution and optimizing efficiency.
The copper wire communication segment is anticipated to grow at significant CAGR of over 12% from 2016 to 2024. The optical fiber communication is gaining popularity owing to several advantages such as lower attenuation and interference. Moreover, investments in the telecommunications and information technology are contributing to the segment growth.
The Asia Pacific market accounted for over 22% of the global industry share in 2015 and is expected to increase steadily over the next decade. Increasing investments aimed to boost the manufacturing activities across developing economies worldwide are expected to favorably impact the industry growth. Moreover, favorable initiatives from governments in countries such as India, China, and Japan have led to rising in demand across the entire region.
The key industry players include Eaton Corporation Plc., General Electric Company, ABB Ltd., Crompton Greaves Ltd., Cisco Systems, Inc., Larsen & Toubro Limited, Verson Electric Pvt. Ltd., Schneider Electric SE, Siemens AG, and Trilliant Holdings, Inc. In order to expand the global presence, manufacturers such as CG Global are increasing the substation automation businesses in Western Europe and Asia Pacific.
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In contrast to its related industries like consumer electronics and semiconductors, the data center and communications infrastructure industry is expected to be more buoyant with continued strategic investments made to support the increased network traffic and data usage for remote working during the lockdown phase. From school closures necessitating students to use virtual offerings (Google Classroom ) to the governments using business analytics services (Power BI) for communicating virus updates, the demand for communication services and related infrastructure has witnessed an unprecedented rise amidst the global pandemic. Digital services including telemedicine are expected to remain popular even after the pandemic is contained, thereby ensuring strong growth in the communication infrastructure industry. The report will account for Covid19 as a key market contributor.