Increases in Substation Automation, Integration Program Spending Reported by North American Utilities

The Newton-Evans Research Co. has released findings from the North American volume of its newly published four volume research series entitled: The World Market for Substation Automation and Integration Programs in Electric Utilities: 2011-2013. The new study compares the current round of research findings with earlier tracking studies conducted by the firm.

Newton-Evans Research estimates the current North American spending for substation automation and integration programs at more than $500 million, with an overall potential market size of nearly $10 billion. Global potential 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 – or at best moderate growth - years in most categories of intelligent electronic equipment sales related to the modern, increasingly digital, electric power substation. Fewer retrofit programs were undertaken except for the most critical of substations. The pool of funding for substation automation projects increased somewhat by virtue of a portion of the stimulus funds made available by the U.S. Department of Energy, with most of this amount likely to be spent in 2011-2012.
• Newton-Evans further estimates that only about 10-12% of utility operated substations in North America have been fully automated and integrated by year end 2010. Most of these are in fact newly or recently constructed substations.
• Increasingly, 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 2010 have indicated moderate-to-good growth market conditions within their utility sales sectors, resulting in sales that are as much as 7% to 15% higher than 2008-2009 sales levels. The substation automation market outlook for 2011 is also for moderate year-on-year growth, continuing through 2012.
• Utility manpower shortages continue to negatively impact the ability of technology supplier companies to engage utilities for other than short-term requirements. However, 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 installation.
• In summary, retrofit substations will be upgraded as warranted, based on load growth, criticality to customers, and related distributed generation developments. New substations will increasingly be designed and constructed as integrated and automated remote assets for the utility.
• 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 a slight increase in plans for some level of use of IEC 61850 among some of the largest utilities.

Additional topics being covered in the four-volume series of substation automation studies include strong coverage of multiple communications topics, vendor security certification requirements, external systems linkages to the substation, preferred equipment suppliers, and an assessment of where North America’s electric power substations are positioned along a three-phase path to complete automation.