Digital Substation Market size was estimated at USD 6.5 billion in 2024 and is projected to attain USD 15.8 billion in 2037, surging at a CAGR of 7.7% during the forecast period i.e. 2025 to 2037. In 2025, the industry size of digital substation is evaluated at USD 7 billion.
The market is growing remarkably, driven by a combination of technological advancements, regulatory mandates, and the increasing demand for reliable and efficient power distribution systems. For instance, in February 2021, Hitachi ABB Power Grids announced the launch of its Smart Digital Substation offering. It combined the capabilities of Hitachi's industry-leading Lumada Asset Performance Management (APM) solution with the most recent advancements in digital substation technology. As utilities and energy providers transition from traditional electrical infrastructure to digital solutions, the integration of IoT, AI, and big data analytics is revolutionizing the operational capabilities of substations.
The enhanced capabilities of digital substations involve real-time monitoring, predictive maintenance, and automatic control capabilities. Moreover, a strong global drive towards renewable sources of energy calls for existing infrastructure to be updated with decentralized energy generation and smart grids. For instance, in June 2020, LF Energy launched its Digital Substation Automation Systems (DSAS) initiative. It aimed to increase the power grid's modularity, interoperability, and scalability to hasten the global effort to become carbon neutral by 2050. Collectively, these exceptional growth drivers underscore the pivotal role of digital substations in shaping the future of energy management and distribution, positioning them as a cornerstone of the evolving energy landscape.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
7.7% |
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Base Year Market Size (2024) |
USD 6.5 billion |
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Forecast Year Market Size (2037) |
USD 15.8 billion |
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Regional Scope |
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Type (Distribution Substation, Transmission Substation)
Distribution substation segment is expected to account for market share of more than 79.7% by the end of 2037. This is attributable to the efficient delivery of power from the transmission networks to consumers. For instance, in October 2023, Adani Transmission Limited (ATL) declared that it was constructing a transmission line and substation from Kharghar to Vikhroli. This distribution network aimed at adding 1500 MVA 400kV GIS Substation and 74 Ckm of 400kV and 220kV transmission lines. Thus, growing requirements for a reliable supply of electricity in cities necessitate mature power grids towards the spur of economic, as well as industrial development and new influxes of populations.
Industry (Utility, Metal, Mining, Oil & Gas, Transportation)
The utility segment is projected to garner significant growth traction in the digital substation market during the forecasted timeline Within the market, the utility substation segment is leading in terms of revenue owing to its necessity in the transmission and distribution of electricity through an electrical grid. For instance, in January 2023, ABB introduced its ground-breaking virtualized protection and control solution, Smart Substation Control and Protection SSC600 software. Utility customers can easily use a full suite of dependable protection and control features while personalizing their hardware selections. Power distribution system reliability is improved and grid management techniques are revolutionized by this innovation. Thus, utilities have deployed digital utility substations that reduce operational costs, minimize maintenance, and optimize outage response times.
Our in-depth analysis of the global market includes the following segments:
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Type |
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Module |
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Voltage |
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Industry |
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North America Market Analysis
North America in digital substation market is projected to hold more than 48.7% revenue share by 2037. Utilities are facing the challenges of aging infrastructure and the integration of renewable energy sources, hence the adoption of digital substations becomes essential. Advanced systems facilitate real-time monitoring and automation, which can greatly improve operational performance and minimize downtime. Probably, it has to do with the desperate desire to modernize the electrical infrastructure to support more sustainable and resilient energy structures means of ensuring timely distribution for evolving energy requirements.
The U.S. digital substation market is growing at a rapid pace on account of an urgent desire to modernize old electrical network structures. For instance, in February 2024, GE Vernova introduced a new line of grid automation products, GridBeats to improve grid resilience. The innovative software-defined automation solutions are intended to modernize and digitize grid operations in utilities with cutting-edge capabilities for substation digitization. In addition, the implementation of smart grid initiatives aims to increase the efficiency of operations and facilitate a more sustainable energy system.
In Canada, the market will grow at a moderate pace due to government commitments to shift to a low-carbon economy. As Canada continues to increase its reliance on renewable energy sources, digital substations are necessary to enhance grid efficiency and reliability. This strategic shift supports sustainability and also gives a resilient energy infrastructure that would be ready to address future demands. In addition, the rise of smart cities and the increasing deployment of smart grids globally are contributing to the market's expansion.
Europe Market Statistics
Europe is expected to witness substantial growth in the digital substation market during the forecast timeline from 2025 to 2037. It is driven by the ambitious decarbonization targets set by the region and the integration of renewable energy. In addition, Europe nations are raising their demand for advanced grid technologies based on the ambition of meeting climate goals, with enhanced operational efficiency and reliability. The most relevant growth reason is the commitment of the European Union to smart grid initiatives, which relate to modernizing energy infrastructure and facilitating the smooth integration of distributed energy resources.
The digital substation market is especially gaining high prominence in France due to the country's focus on a shift towards a more sustainable system by installing digital substations. For instance, in February 2022, Enedis and Schneider Electric implemented an initiative centered on a new generation of MV/LV substation equipment to substitute SF6 gas. Enedis has committed to a 20% reduction in its carbon footprint by 2025. Meeting these ambitious energy transition goals calls for strategic modernization.
The driver of the digital substation market in Germany can be attributed to the increasing need for high-level solutions to be placed on grids, in a bid to absorb the share of intermittent renewable energy sources such as wind and solar power. Installing digital substations is an important step toward this transition because it opens the door to real-time analysis and automation of data. For instance, in October 2021, Siemens Energy launched the world's first environmentally friendly facility, the new high-voltage substation in Burladingen, Germany. It runs without SF6 and has been digitalized with new equipment for connectivity and intelligence.
In the market companies are transforming the entire digital landscape of the substation. Through their innovative efforts in automation, real-time monitoring makes it effortless and frictionless for utilities to optimize distributed renewable energy. For instance, in September 2023, One Energy Enterprises Inc. declared that it had finished building America's first plug-and-play transmission voltage level substation that was fully digital. Additionally, this transformation is a crucial step towards cybersecurity, which safeguards digital infrastructures from threats.
Here’s the list of some key players:
Author Credits: Dhruv Bhatia
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