Containerized Substation Market size is anticipated to witness exponential growth over 2023-2032 on account of proliferating electricity demand along with increasing adoption of decentralized power generation. Electrification at remote and inaccessible locations requires a quick setup of substations with minimal on-site work requirements, which, in turn, will accelerate the product demand.
The ability of containerized substations to effectively operate in extreme climatic conditions coupled with the rising occurrences of power outages owing to natural disasters will drive the industry growth.
The growing inclination of power utilities from oil-filled distribution transformers to dry-type distribution transformers will propel the containerized substation market growth. Ongoing investments toward the development of the Commercial and Industrial (C&I) sector will further influence product deployment through 2032.
However, the Russia-Ukraine conflict has impelled prices for energy commodities, particularly natural gas and coal, considerably increased the cost of power generation, and caused a steep spike in inflation, which is expected to present challenges for clean energy initiatives.
In 2022, the Inflation Reduction Act, enacted by the House of Representatives in the United States, authorizes $369 billion in financing for climate change-related and renewable energy activities. The act includes a variety of incentives and tax credits for clean energy, electric cars, nuclear power, and clean hydrogen, among other things, and is expected to reduce carbon emissions in the U.S. Such beneficial government initiatives will aid in overcoming the industry restraints in the coming years.
Based on type, the high voltage containerized substation market is set to record a positive growth rate between 2023 and 2032 owing to the increasing demand for replacement and refurbishment of existing substations on account of their inefficiencies and incompatibility with modern requirements.
For instance, the Niles Area Transmission Improvements Projects, which is a $66 million electrical network upgrade plan announced in March 2022, will allow Indiana Michigan Power to renovate and replace outdated equipment, some of which has been in use since the 1960s. The project will include two new substations, improvements, and additions to three existing substations and approximately 3.5 miles of the high-voltage transmission system.
In terms of application, the containerized substation market is classified into commercial and industrial, of which the industrial segment is poised to witness robust growth. The growing demand for installing cost-competitive substations across industrial premises, together with a positive outlook toward industrial development, will positively influence the segment growth.
Europe containerized substation industry is slated to grow impelled by the substantial investments toward the development of smart grids and distributed generation. Industry, urban heating, and transportation are changing at a rapid pace. The increasing electrification of society and higher electricity consumption is estimated to increase the level of investment in the main electricity grid. For instance, in May 2022, the operator of the Finnish energy system, Fingrid, announced that over the following 10 years, it plans to invest a record-breaking €3 billion (~USD 3.2 billion) in networks. These investments will speed up the building of RES and facilitate electrification.
Eminent industry participants operating in the containerized substation market are Larsen & Toubro, ABB, General Electric, Toshiba, Kirloskar Electric, Crompton Greaves, IMESA, Elsewedy Electric Co S.A.E., Siemens, Kirloskar, Eaton, and amongst others.
In October 2022, Planate Management Group was awarded two contracts to develop mobile containerized substations for the Navy Facilities Engineering and Expeditionary Warfare Center, Mobile Utilities Support Equipment (MUSE) Division in Port Hueneme, California. Under these contracts, Planate will refurbish one outdated 2500kVA containerized substation and develop and produce three new 3750kVA containerized substations.