Digital Substation Global Market Report 2024

The term digital substation refers to an electrical substation in which operation is controlled by distributed intelligent electronic devices (IEDs) linked by communication networks. It is possible by the use of computing technologies in the substation. It is used to communicate between the relays in the control house and the instrument breakers, transformers, and merging units in the station yard. The digital substation brings digital technology into the substation.

The main types of digital substations are transmission and distribution. The transmission digital substations market segment consists of sales of digital substations by entities (organizations, sole traders, and partnerships) that refers to a structure, device, or equipment that is commonly positioned and built for voltage control, circuit protection, or switching that is required for the construction or operation of a proposed transmission line is referred to as a transmission digital substation. By voltage level types of digital substations are low, medium, and high. Modules used in digital substations include fiber optics communication networks, supervisory control and data acquisition, and hardware. The major uses of digital substations can be seen in power generation, metal and mining, oil and gas, transportation and logistics, defense and aerospace, process and manufacturing, and other industries.

The digital substation market research report is one of a series of new reports that provides digital substation market statistics, including digital substation industry global market size, regional shares, competitors with a digital substation market share, detailed digital substation market segments, market trends and opportunities, and any further data you may need to thrive in the digital substation industry. This digital substation market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The digital substation market size has grown rapidly in recent years. It will grow from $7.3 billion in 2023 to $8.03 billion in 2024 at a compound annual growth rate (CAGR) of 10.1%. The growth in the historic period can be attributed to increased in energy demand, enhanced grid monitoring requirements, cost savings in operation and maintenance, regulatory compliance requirements.

The digital substation market size is expected to see rapid growth in the next few years. It will grow to $12.51 billion in 2028 at a compound annual growth rate (CAGR) of 11.7%. The growth in the forecast period can be attributed to grid decentralization, electrification of transportation, standardization and interoperability, rapid urbanization and electrification. Major trends in the forecast period include increasing adoption of iot and sensors, edge computing for real-time processing, artificial intelligence and machine learning applications, remote monitoring and maintenance, resilient communication networks.

The increase in demand for electricity is expected to propel the growth of the digital substation market. Digital substations are actively used in replacing traditional copper cable with advanced fiber optics transmitters to convert electrical signals to optical signals. Digital substations are also used in power grids and transformers to minimize losses during transmission of electricity. For instance, in November 2021, according to the International Energy Agency’s semi-annual Power Market Report, the global electricity demand is expected to climb by 5% in 2021 and 4% in 2022. The amount of electricity generated by renewables is expected to rise as well, by 8% in 2021 and over 6% in 2022. Therefore, the increase in demand for electricity is driving the digital substation market growth.

The surge in demand for electricity from renewable sources is significantly contributing to the growth of digital substation market going forward. Renewable energy refers to the energy that comes from renewable resources that replenish themselves more quickly than they are used up. Digital substations can better accommodate the integration of renewable energy sources such as, solar and wind, which can be intermittent and require precise control. For instance, in July 2023, according to data provided by the International Energy Agency (IEA) a France-based intergovernmental organization that provides policy recommendations, analysis and data on the entire global energy sector, the electricity produced from solar PV increased from 823.8 Terra Watt hour (TWh) in 2020 to 1002.9 TWh in 2021. Therefore, the surge in demand for electricity from renewable sources will drive the solar farm market.

Strategic collaboration between companies is a key trend gaining popularity in the digital substation market. Companies that provide digital solutions are undergoing partnerships and collaborations to cope with the digital transformation that is occurring at a rapid pace. For instance, in September 2023, Hitachi Ltd, a Japan-based electronics company partnered with East Japan Railway Company to develop full-digital substation system by 2025. The technology will enable dual configuration of transmission lines as well as protection and control functions in substation premises, allowing for stable railway transportation via a stable supply of power. Furthermore, by minimizing the size of facilities, it will improve construction efficiency. Furthermore, in March 2023, Tata Power, an India-based integrated power company partnered with Enel Group, an Italy-based green energy and artificial intelligence (AI) company to power digtalization and automation of India's power distribution network. The first pilot project will focus on increasing digitization and automation of secondary substations, with Tata Power joining Gridpertise's proprietary QEd - Quantum Edge Device international co-creation programme. This collaborative programme will virtualize grid functionality, allowing for network security and control, automation, real-time problem detection, and service restoration.

Major companies operating in the digital substation market are focusing on developing digital twins for operating substations and increasing substation efficiency. Digital twin refers to a digital representation of a physical object, process, service or environment that behaves like its counterpart in the real-world. Digital twin technology is being used to create virtual replicas of physical substations, enabling real-time monitoring, predictive maintenance, and advanced analytics for improved performance. For instance, in March 2023, Danfoss, a Denmark-based technology company, launched autonomous Titan substation which Boasting unique digital twin technology that enables reliable cloud commissioning and continual performance optimization - in an increasingly demanding industry. The smart substation complements Danfoss' large district energy product line, enabling end-to-end optimization.

In February 2021, Kalpataru Power Do Brasil Participacoes Ltd., a Brazilian provider of power transmission and infrastructure EPC space, acquired a 51% stake in Fasttel Engenharia Ltd for $8.8 million. The acquisition allows Kalpataru Power to capitalize on the opportunity in Brazil and grow its position in the Latin American market. Fasttel Engenharia is a Brazilian firm that specializes in the engineering, procurement, construction, and maintenance of electricity transmission lines, substations, and distribution systems.

Major companies operating in the in the digital substation market report are ABB Ltd., NR Electric Co. Ltd., Eaton Corporation Inc., Schneider Electric SE, General Electric Company, Larsen & Toubro Ltd., Siemens AG, Tekvel, Toshiba Corporation, YAMAL LNG, DNV GL, Hitachi Ltd., iGrid S. L., Kalki Communication Technologies Private Limited, Locamation, Panasonic Corporation, Cisco Systems Inc., Honeywell International Inc., Emerson Electric Co., Mitsubishi Electric Corporation, Schweitzer Engineering Laboratories Inc., G Power and Industrial Solutions Limited, Arteche Group Corporation, EFACEC Power Solutions SGPS S. A., Alstom Ltd., Hyundai Electric & Energy Systems Co. Ltd., Powell Industries Inc., Rittal GmbH & Co. KG, Belden Inc., Beckwith Electric Co. Inc., ERLPhase Power Technologies Ltd.

Europe was the largest region in the digital substation market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the digital substation market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa

The countries covered in the digital substation market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Canada, Spain.

The digital substation market includes revenues earned by entities by providing solutions to convert analog measurement data and binary status into digital data in both station and process level using digitalization tools to provide secure and reliable method of data transmission with low operational cost and investment. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified)).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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