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4 key factors likely to shape digital substation market outlook through 2028

  • Published Date: August 17, 2022

Powered by the proliferation of T&D networks, digital substation market has recorded substantial gains in the recent years. Amid the growing urbanization, the performance demand from electricity networks is higher than ever before. Power generation is becoming progressively dynamic, with renewable technologies and distributed sources coming online at a robust pace.

With the growing number of power sources also comes the frequent occurrence of unpredictable or intermittent consumption patterns. The digital substations enable the grid to tackle the sudden change in energy flow and efficiently manages the transmission of power.

What benefits would digital substations deliver to the energy industry?

Digitization in substations indicates increased operational efficacy via the use of new technologies and processes. Compared to a conventional model, digital substations offer benefits around operating costs and investment. Besides, the units also deliver advantages like safety, interoperability, high-grid reliability, and security.

Propelled by such merits, a report by Global Market Insights Inc. estimates the digital substation market size to surpass USD 10.5 billion by 2028.

The market gained crucial headlines recently with Indonesia’s Hitachi Energy deploying 150 kilovolts of digital substation to strengthen the local grid reliability. The system is expected to facilitate decarbonization by enabling the integration of renewable energy into the T&D network. This would positively impact economic growth in the East Java Province by allowing a reliable source of electricity.

In yet another development, ABB and UK Power Networks, in 2021, launched a new digital substation protection solution and control project. This initiative is expected to enable more renewable sources to be integrated onto the grid. UK Officials believe that the solutions from ABB could support the delivery of a software-oriented wide area protection system, based on 5G telecom networks for communication between the medium voltage substations across the latter’s network.

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While the digital substation market size is projected to increase owing to such advancements, enlisted below are some crucial facts that will complement the industry growth curve over 2022-2028:

  1. Consistent project advancements in substation automation

One of the leading power management companies, Eaton Corporation, defines a substation automation system as a collection of software and hardware components that are used to control and monitor an electrical system, both remotely and locally. It also enjoys the popularity of automating some tedious, repetitive, and error-prone activities to augment the overall productivity and efficacy of the system.

In 2020, LF Energy-a Linux Foundation non-profit coalition that seeks enhancement of power grid infrastructure- revealed its Digital Substation Systems directive to enhance a power grid’s interoperability, scalability, and modularity, to push the global effort toward carbon neutrality by 2050. This was a strong step directed toward expediting the global digital substation industry progression over the coming years.

       2 . Digital substation deployment in Africa on the rise

The demand for electricity generation is soaring across the African economies. According to the South Africa Ministry of Mineral Resources and Energy, the total domestic electricity generation capacity is nearly 58,095 megawatts from all sources. And now, with novel technologies, such as digital substations, the efficiency and ease of power generation in the region are higher.

This has enabled energy leaders in the continent to consider the adoption of robust digital substations that are able to provide optimum electricity to the different economies. Supporting the aforesaid is GE Renewable Energy’s new fully digital high voltage substation project in Senegal, Africa. The firm’s Grid Solutions’ digital substation’s advanced functionalities, with a footprint reduced by nearly 50% are projected to be a key enabler of the energy transition in the region.

         3 . Eco-friendly power initiatives to prompt market impetus through 2028

Digital substations offer seamless integration into eco-friendly power initiatives. The momentum to employ distributed energy resources and cut down the carbon emissions continues to grow worldwide, paving way for the introduction of different renewable programs. Some of these have been mentioned below:

  • Germany is anticipating serving 65% of its electricity demand through renewable energy by 2030 end.
  • Microsoft aims to be carbon negative by 2030 while removing all the carbon from the environment it has emitted since its foundation by 2050 end.
  • All of Apple’s data centers have been operating on renewable energy since 2014.
  • Europe’s Green Deal- The continent plans to make EU climate neutral by 2050.
  • The Government of India aims to deploy 175 gigawatts of renewable energy projects by 2022 end and 450 GW by the end of 2030.

         4 . Utility-scale projects to be the new avenue for industry growth

Digital substations boast of backward compatibility, which enables smooth integration of advanced communication technology with a utility’s existing systems. Besides, the system also offers a reduced maintenance cost-benefit, owing to utilities’ ability to monitor and control parameters in real-time.

Substations automation also reduce the physical footprint, enabling utility operators to make use of the remaining space more effectively or to rent smaller spaces for the same purpose. Utilities around the globe are developing digital substations and are now taking digitization to all-new levels of networking. Developing regions have also witnessed notable forward movement in this regard.

In a recent demonstration, ABB India recently launched its expanded digital substation products in the state of Gujarat. The products are anticipated to be deployed across multiple utilities and industries ranging from oil and gas to steel and others. The new factory is likely to address the growing demand for an extensive range of digital substation products and digital solutions across the country, along with more than 50 nations worldwide.

What does the future hold for substation automation market?

While the power industry analysts ready themselves to embrace the latest trends and technologies in the digital substation business, the market leaders are looking for lucrative opportunities to expand beyond their capacity to gain a strong foothold. As a part of the future of the energy ecosystem, digital substations are all set to offer the promise to support all three priorities for the electric grid, right from low cost to regulatory compliance and high reliability.

Author: Vinisha Joshi

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