Substation Automation Market - Size, Share, Industry Trends, and Forecasts (2024 - 2031)

By Offering:

Based on the offering, the market is segmented into Hardware, Software, and Service.

Trends in the offering:

• The rising complexity of power systems and the need for real-time data analysis have led to a higher demand for advanced substation solutions.

The hardware accounted for the largest revenue share of 53.18% in the year 2023.

• The critical function of substations is linked to the hardware segment containing components such as Intelligent Electronic Devices (IEDs), Sensors, Transducers, Remote Terminal Units (RTUs), and Redundancy Devices.
• Several factors are driving the hardware components, including the continuous upgrading of old hardware with more advanced devices, higher investments in updating electrical infrastructure, and other reasons.
• In September 2023, East Japan Railway Company (JR East) and Hitachi are working together to create a fully digital substation system by the year 2025. The objective of this system is to guarantee consistent railway transportation by providing a dependable power source. It includes both transmission lines and substation protection and control functions in a dual configuration. Furthermore, it seeks to improve construction productivity by reducing the size of the facility.
• Thus, the aforementioned factors in the hardware segment are driving the substation automation market trends.

The software is anticipated to register the fastest CAGR during the forecast period.

• The sector of software, which encompasses features such as Supervisory Control and Data Acquisition (SCADA), Advanced Distribution Management, Human Machine Interface (HMI), SCADA, and more.
• The increase is fueled by various reasons such as the rising need for grid enhancement, real-time data for prompt decision-making during power grid issues, and software solutions that easily integrate with current systems.
• The advantages following the introduction of the factor mentioned above consist of risk reduction, decreased maintenance expenses, inexpensive flexibility, and more.
• In July 2023, ABB introduced a new smart solution for distribution substations, the ABB Ability Smart Substation Control and Protection for Electrical Systems SS600, in Vietnam. This innovative technology assists Vietnamese utility and industrial operators in navigating the complexity of power networks. It offers centralized protection and control solutions that enhance asset utilization and flexibility while reducing costs.
• Therefore, the software solution is anticipated to boost the market during the forecast period.

By Type :

Based on the type, the market is bifurcated into Transmission Substations and Distribution Substations.

Trends in the type:

• Distribution substations are incorporating smart grid technologies to improve real-time monitoring, fault detection, and automated response systems.

The transmission substation segment accounted for the largest revenue share in 2023 and is anticipated to register the fastest CAGR during the forecast period.

• Transmission substation refers to the connection of two or more transmission lines that contain high-voltage electric flow. It is utilized majorly in grid systems.
• The growing power need, significant investments in power infrastructure development, and advancements in technologies such as digital substations are promoting power infrastructure modernization.
• In December 2023, Linxon got a contract from Svenska Kraftnät (SvK) to provide a new 10-bay 400 kV Air Insulated Switchgear (AIS) substation. This is part of a broader project in collaboration with the Swedish energy company, Vattenfall, which also includes an additional 130 kV substation. These substations supply power to the H2 Green Steel (H2GS) mill in Degerträsk near Boden. This project aligns with Sweden's strategy to green its steel industry.
• Thus, the growing power need and advancement in digital transmission substations are driving the market trends.

By Installation:

Based on the installation, the market is bifurcated into New Installations and Retrofit Installations.

Trends in the installation:

• There is a rising trend towards avoiding the need for total replacement of substations which enhance reliability and efficiency in the industrial sector.

The new installations accounted for the largest revenue share in the year 2023 and are anticipated to register the fastest CAGR during the forecast period.

• The new installation of substation automation include the necessity to improve infrastructure, incorporate renewable energy sources into the power grid, adhere to regulatory requirements, and more is the driving factor.
• Moreover, the benefits include cost savings associated with new installation and the ability to minimize disruption to the existing power supply.
• They are utilized in energy & utilities, oil & gas, and other industrial applications that require new installation of substation solutions.
• In May 2024, Hitachi Energy signed a €4.5 billion contract. The contract aims at building three offshore direct current platforms and three onshore converter stations for the Normandy and Oléron Island offshore wind farms.
• Thus, the new installation segment due to its benefits is driving the substation automation market opportunities.

By Application :

Based on the application, the market is segmented into control function, monitoring function, alarming function, measurement function, voltage regulation, alarm and signals, and others.

Trends in the Application:

• The increasing use of digital twins in substation systems enables operators to create a simulation and improve operational efficiency and decision-making.

The control function accounted for the largest revenue in the overall substation automation market share in 2023.

• Control function in the substation incorporates a system comprising hardware as well as software components to control the operation of the substation.
• They offer a range of benefits including protection of substations, detect faults, analysis of the flow of electricity, and others.
• They are utilized in controlling commands to break the circuit's connection in utility & energy and other industrial applications that require control functions in substation automation solutions.
• In October 2023, Hubbell Inc. acquired Northern Star Holdings, Inc., a leading provider of substation control and relay panels for $1.1 billion. This acquisition aims to expand Hubbell's industry-leading utility solution portfolio.
• Thus, the control function in substation automation is driving the market developments.

The monitoring function is anticipated to register the fastest CAGR during the forecast period.

• Monitoring function in the substation has various sensors such as a current sensor, an AC voltage sensor, and a temperature sensor to monitor the operation of the substation. This sensors are embedded with Industrial Internet of Things (IIoT) for easy analysis and effective data management.
• They offer a range of benefits including performing time-based preventive maintenance, root cause analysis, data analysis for equipment selections, and others.
• They are utilized in monitoring various components and elements associated with substations majorly in utility & energy and other industrial applications.
• In April 2021, Siemens launched Sitrans SCM IQ, a New Smart Condition Monitoring solution embedded with IoT sensors for industrial plants. This solution aims to detect and prevent incidents resulting in reduced maintenance costs and downtimes, and increased plant performance by 10%.
• Therefore, the monitoring function in substation automation is anticipated to boost the market during the forecast period.

By End-User:

Based on the end-user, the market is segmented into Energy & Utility, Oil & Gas, Manufacturing, Mining, Transportation, and Others.

Trends in the End-User:

• The rise of microgrids and EV charging requires advanced substation systems to optimize the energy flow and help enhance the efficiency of charging stations and grid stations.

The energy & utility accounted for the largest revenue share in the year 2023 and is anticipated to register the fastest CAGR during the forecast period.

• The growing population and industrial activities increase the need for electricity, surging demand for modernization of aging infrastructure due to advanced machinery and equipment which enhances the operation, integration of renewable energy, smart grid initiatives, and others.
• They offer a range of benefits including cost reduction and efficiency improvements, risk mitigation, safety & security, and others.
• In May 2022, Doble Engineering Company, a dominant force in power grid diagnostic solutions, revealed the introduction of the F6880 Digital Network Analyzer. The new solution is designed to help power and utility companies effectively resolve communications and network performance problems in IEC 61850 digital substation setups.
• Thus, as per the analysis the aforementioned factors collectively are driving the substation automation market trends.

Regional Analysis:

The regions covered are North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.

North America is estimated to reach over USD 18,970.37 Million by 2031 from a value of USD 10,917.07 Million in 2023. The market growth is mainly driven by the implementation of digital substations which feature a plug-and-play facility catering to the rising need for electricity due to the rise of various sectors such as electric vehicles which depend on electricity for charging.

• In July 2023, One Energy Enterprises announced the successful energization and commercial operation of the first fully digital, plug-and-play, transmission-voltage substation in the U.S. at their Findlay, Ohio headquarters. This substation powers their "Megawatt Hub," a 30 MW site expandable to 150 MW, designed to provide high-volume power connections for industries such as electric truck charging, digital currency mining, and indoor farming.

Furthermore, factors including the increasing need for reliable and efficient power supply, and increasing electricity trade between countries are projected to drive the market growth in North America during the forecast period.

Asia Pacific region was valued at USD 7,953.10 Million in 2023. Moreover, it is projected to grow by USD 8,405.32 Million in 2024 and reach over USD 14,319.82 Million by 2031. Out of this, China accounted for the maximum revenue share of 29.1%.

The Asia Pacific region's growing demand by the industrial sector which depends on coal majorly for power generation offers lucrative growth prospects for the market. Additionally, the growth of power generation is dependent on increasing investment in renewable sources such as wind, solar and energy storage in the region is driving substation automation market growth.

According to the substation automation market analysis, Europe is anticipated to witness substantial development that is backed by the increasing need for electricity consumption and eliminating dependency on Russia for fossil fuels in turn catering to the surging need for substation automation market across the region.

• In November 2023, according to the European Commission, Electricity consumption in the EU is projected to rise by 60% by 2030, necessitating a more digitalized, decentralized, and flexible system to manage millions of rooftop solar panels, heat pumps, local energy communities, offshore renewables, electric vehicle charging, and hydrogen production.

The substation automation market in the Middle East & Africa is poised for moderate progress, driven by the increasing need due to the expansion of the downstream oil and petrochemical sectors as the region is moving from oil-based to natural gas-based electricity generation, fueling market demand, especially in countries such as Saudi Arabia, UAE, and South Africa.

The rising need for energy in various sectors such as utilities & energy and others in countries including Brazil, Argentina, and Mexico is depicting the cumulative substation automation market expansion in the Latin American Region.

Top Key Players & Market Share Insights:

The global substation automation market is highly competitive with major players providing systems to the national and international markets. Key players are adopting several strategies in research and development (R&D), product innovation, and end-user launches to hold a strong position in the substation automation market. Key players in the substation automation industry include-

Substation Automation Market Ecosystem: