Electric Power Transmission and Distribution Equipment Market Trends

Growth Drivers

• Rising transition to renewable energy sources: The global shift towards integrating green energy power solutions is a major driver of the electric power transmission and distribution equipment market. Globally, governments have set ambitious renewable energy targets to harness solar, wind, and hydroelectric power to reduce dependency on fossil fuel power sources. These trends boost demands for advanced transmission equipment. For instance, in September 2024, Supreme Power Equipment Limited secured a USD 3.1 million order to manufacture, supply, and install 10 units of 6 MVA, 800V/33KV transformers and commissioning a 110 KV substation.
  
  Manufacturers are set to benefit as demand surges for equipment that can handle renewable energy integration. For instance, in August 2024, Siemens Smart Infrastructure launched a SICAM enhanced grid sensor (EGS) that is poised to answer the challenges of distribution network transparency for grid operators.
• Increasing investments in grid modernization: Investments in upgrading aging power infrastructure boost the growth of the electric power transmission and distribution equipment market. Grid modernization involves the replacement of power lines, substations, and old transformers leading to a surge in demand for power transmission and distribution equipment. Global trends in reducing emissions also hasten grid modernization efforts globally. Additionally, government funding ensures a steady stream of revenue for manufacturers who have earned the contract to manufacture and supply equipment. For instance, in August 2024, GE Vernova announced that it would deliver the world’s first 245 kV SF6 free gas-insulated for the Réseau de Transport d’Electricité (RTE) of France.
• Growth in electricity demands: The rising electricity demand globally is projected to be a major driver of the electric power transmission and distribution equipment sector. The International Energy Agency (IEA) The International Energy Agency (IEA) released a mid-year forecast for 2024 estimating electricity demands to have grown by 4% in 2024 led by an 8% increase in India and a 6% rise in China. The surge in demands pushes for investments in expanding power grids and modernizing them, as well as building new microgrids to effectively answer demands. For instance, in September 2024, the Korea Electric Power Corporation (KEPCO) and ABB signed a memorandum of understanding (MoU) to supply a high-inertia flywheel synchronous condenser to help maintain the operation of the power grid on Jeju Island.
  
  Additionally, rising demands by the industrial sector to provide stable, reliable, and continuous power solutions are positioned to create a steady demand for transmission and distribution equipment.

Challenges

• Overburdening of power grids and slow expansion: The surge in electricity demands can put an excessive burden on power grids that can cause supply disruptions. The slow expansion and modernization of power grids to meet the rising demands can limit opportunities in the global electric power transmission and distribution equipment market. Additionally, a lack of regulatory support in grid modernization can create challenges for the market’s growth.
• Susceptibility to extreme weather conditions: Equipment can be susceptible to harsh weather conditions necessitating manufacturers to build advanced insulation solutions to protect equipment during adverse conditions. Frequent equipment failure can disrupt the electric power transmission and distribution equipment market’s growth. Additionally, global supply chain disruptions can stifle the manufacturing ecosystem of power transmission and distribution equipment. Frequent equipment failure can also cause hesitancy in the adoption of new equipment.