Global demand for electric power transmission and distribution equipment is forecast to reach $172 million in 2023. Rapid development of power infrastructure in developing countries – from small nations such as Bangladesh and Sudan, to massive economies like India – will drive an acceleration in global market growth, as electricity consumption continues to rise.
Meanwhile, in mature markets like the US and Western Europe, where the infrastructure is developed and electrification rates are high, the proliferation of renewable energy projects will create new sales opportunities. In addition, smart grid expansions – like the one underway in Canada – will provide a market boost.
- More advanced sensing and communications devices require more modern switching devices and may discover bottlenecks in the grid in need of repair.
- Electric power transmission and distribution products such as switchgear and transformers will continue to provide the backbone to which the more advanced smart controls and systems are attached.
Electricity consumption on the rise worldwide
Trends influencing the broader electric power generation sector are of importance to suppliers of electric power transmission and distribution equipment, since growth in sales of such equipment is highly correlated with an increase in electric power usage. Rising demand for electricity leads to the construction of new electric power generation facilities that are integrated into the grid using electric power transmission and distribution equipment.
Energy supplies tend to be most readily available in industrialized nations, with the US, Western Europe, and Japan together accounting for 31% of electricity generated globally in 2018. China is an exception due to the substantial size of its population and massive manufacturing sector – the country alone generated 28% of the world’s energy in 2018. However, per capita electricity consumption in China is lower than that in more developed countries.
Continuous population growth has made it essential for countries to increase their power generation capacity in order to meet rising demand for electricity. Power grids need to be integrated to carry higher voltage power and convert electricity produced via renewable energy sources. As this requires substantial investment, changes to the infrastructure are expected to be incremental over the long term.
Hence, electrification initiatives and ongoing industrialization efforts in the Asia/Pacific and Africa/Mideast regions and in Central and South America will continue to spur growth in electricity production.
The promise & challenge of the smart grid
A smart grid is an electricity network that improves communication at all points along the distribution network, from generators and consumers, to ensure economically efficient, sustainable power systems with low losses and high levels of quality, supply, and safety.
In its broadest scope, the concept of a smart grid incorporates sensors, electronic controls, and communications technologies to equipment powered by electricity – such as industrial motors or home appliances – thereby enabling customers to tailor power consumption to off-peak times.
The ultimate promise of the smart grid is to completely restructure the electric market by:
- enabling suppliers to generate power from the least expensive and most environmentally friendly sources
- limiting transmission and distribution losses
- reducing the number and scope of service outages
- permitting users to limit consumption during peak use periods
Together, these changes will synchronize the generation, transmission, and use of electricity to allow the most efficient use of grids and power generating capacity while lowering the cost of power. Given its complexity, development of smart grids is a long-term project that faces a number of technological, regulatory, and other hurdles around the world.
However, given the ultimate scope of the smart grid concept, there are a number of potential entry points for product and service vendors – ranging from providing relatively simple sensor products or outsourced meter reading services to developing complex control and management systems for entire sections of a national transmission grid.
Key market trends through 2023
Electric power transmission and distribution equipment is used in virtually every sector of the economy for the generation, transmission, distribution, and consumption of electric power.
As energy and its supply is fundamental to their business, electric utilities and industrial generators are the largest and most traditional markets for electric power transmission and distribution equipment. In 2018, electric utilities accounted for 45% of global demand for these products, with the industrial units – including nonutility generators – accounting for an additional 32%.
The larger size of the industrial market is attributed to the vast amount of electric power transmission and distribution equipment needed to protect industrial machinery and buildings from power fluctuations. In addition, this market is expected to continue to expand most quickly due to the continuous growth of nonutility electricity generation.
Smaller markets include the commercial and residential sectors, which primarily use circuit breakers, fuses, and low-voltage switchgear; and the government sector, which uses a mixture of switchgear and transformer products.
Want to learn more?
See the new Freedonia Group study, Global Electric Power Transmission & Distribution Equipment.
About the Author:
Peter Kusnic is a Content Writer with The Freedonia Group, where he researches and writes studies focused on an array of industries.