The Newton-Evans Research Co. has released findings from the North American volume of its newly published substation automation and integration programs research.
The new study compares the current round of research findings with several earlier substation modernization tracking studies conducted by the firm. More than 75 large and mid-size North American electric power utilities actively participated in this multi-part study.
Newton-Evans Research estimates the current mid-range of North American spending for substation automation and integration programs at $690 million, with an overall potential market size of nearly $10 billion. Global potential spending for substation modernization programs is estimated at about $38-$40 billion. This amount includes spending for a wide range of intelligent substation-resident equipment and devices and the manpower to undertake the systems integration efforts required.
Additional Observations:
- The years 2008-2009 were slow growth years – while the 2010-2013 years provided moderate-to-good growth in most categories of intelligent electronic equipment sales related to the modern, increasingly digital, electric power substation. The pool of funding for substation automation projects increased during 2010-2013 thanks in part to the stimulus funds made available by the U.S. Department of Energy, with most of this amount now spent.
- Newton-Evans further estimates that only about 12-15% of utility operated substations in North America have been fully automated and integrated by year end 2013. Most of these fully automated installations are in fact being reported as newly or recently constructed transmission voltage substations.
- It is becoming more difficult to separate substation product classifications as equipment manufacturers tout their offerings as "multifunctional" and the product positioning of many intelligent electronic devices now cuts across multiple product classifications.
- Most substation equipment manufacturers (mid size and smaller companies) and systems integrators surveyed in the second half of 2013 have indicated moderate-to-good growth market conditions within their addressable utility market segments, resulting in sales that are as much as 10-20% higher than 2010-2012 sales levels. The substation automation market outlook for 2014 is also for moderate to good year-on-year growth, continuing through 2016. Looking ahead to 2014-2016, substation retrofit programs are planned to be undertaken only for the most critical of distribution substations, while new electric power T&D substations will benefit from increased spending for integration and automation.
- The outlook for increased reliance on commercial services providers working in substation modernization activities is strongly positive. Third party engineering and integration service firms have recently made significant strides in winning substation automation-related business, from planning to design to construction and equipment installation.
- Utility manpower shortages and funding issues continue to negatively impact the ability of technology supplier companies to engage utilities for other than short-term automation requirements. In states and provinces wherein regulators have approved strong incentives for reliability improvements or for transmission line extensions, the spending outlook is robust.
- In summary, retrofit substations will be upgraded as warranted during 2014-2016, based on regional load growth, load criticality to customers, and related distributed generation and renewables siting developments. New substations will increasingly be designed and constructed as integrated and automated remote assets for the utility. The current study finds the bulk of available substation automation budgets likely to be spent for new substations, primarily for transmission substations.
- North American utilities continue to strongly support DNP 3, and many have now implemented, or are migrating to, a LAN version of this protocol. This year’s study has found some increase in plans for use of at least some portions of 61850 within a few dozen of North America’s largest utilities. The use of encryption techniques for transmission of substation data is also growing.
Additional topics being covered in the four volume series of substation automation studies include in-depth coverage of several communications topics, vendor security certification requirements, external systems linkages to the substation, preferred equipment suppliers, substation timing requirements, and an assessment of how North America’s electric power substations are positioned along a three-step path to complete automation.
This newest edition of this flagship Newton-Evans study features excerpts from other recent substation research programs, including precision timing requirements; CAPEX/OPEX outlook; dynamic line rating systems and synchrophasor-related monitoring systems; the expanding role of relay-centric devices and imbedded sensors; and user-reported vendor preferences for 21 specific substation-resident equipment categories.
Additional information on the North American substation market report, and the other three reports comprising the four volume study “Worldwide Market for Substation Automation and Integration Programs in Electric Utilities: 2014-2016” is available from Newton-Evans Research Company.
