Power Transmission and Distribution (T&D) Equipment Market

Market Overview

The global power transmission and distribution (T&D) equipment market size was valued at USD 151.99 billion in 2022. It is projected to reach USD 265.63 billion by 2031, growing at a CAGR of 6.40% during the forecast period (2023-2031).

Highlights

• The switchgear segment is the major contributor to the market by type.
• The utility segment is the highest contributor to the market by application.
• The distribution segment is the major contributor to the market by voltage.
• Asia-Pacific is the most significant revenue contributor by region.

Power and electrical energy are transferred between a power generation facility and an electrical substation located at a different location using power transmission and distribution equipment (T&D equipment). Switchgears, circuit breakers, meters, belts, chains, and interconnecting lines, collectively known as a transmission network, make up most of this equipment set, making it easier for electrical energy to move. Additionally, it consists of wires, switches, circuits, converters, insulators, capacitors, and conductors. Due to the growing demand for transmission and distribution equipment that is more effective, safer, and dependable, these components are constantly being technologically upgraded.

Market Dynamics

Global Power T&D Equipment Market Drivers

Rise in Electricity Demand

The International Energy Agency (IEA) forecasts that the worldwide energy demand will increase by 2.1% annually by 2040 under current policies. A few variables anticipated to contribute to a growth in the demand for energy worldwide include the expanding population, rapid urbanization and industrialization, and rising infrastructural development. Population growth worldwide causes an increase in both demand for and usage of power. The need for T&D infrastructure can be expanded together with the electricity demand.

Additionally, under the ambitious scenario, according to a joint report from NITI Aayog and the Institute of Energy Economics Japan (IEEJ), India's energy demand will increase from 805 TWh in 2012 to 5144 TWh by 2047. The rising use of energy in household, commercial, and transportation uses to blame for this. The market for electricity T&D equipment, a crucial component of T&D infrastructure, is projected to be driven by these factors.

Global Power T&D Equipment Market Restraint

Significant Starting Cost

Power T&D equipment plays a significant role in the electrical network and accounts for around half of the network's overall cost. For instance, the initial purchase price and the cost of operating it for 30 to 40 years add to the overall cost of installing power T&D equipment for the owner. The cost viability, which does not match the operational life of the transformers, is the main problem with power transformers. The lifespan of other power T&D equipment, including circuit breakers, switchgear, and other components, is proportional to its cost.

Power T&D equipment comes in standard and custom designs and costs a lot of money. The expensive power prices, the complex acquisition of raw materials, and their laborious and drawn-out manufacturing procedure are blamed for T&D equipment. The high cost of electricity T&D equipment is primarily due to the rising price of raw materials like copper and aluminum. Due to these significant factors, the market for electricity T&D equipment would experience growth restraints. Any power project, T&D system, and substation must consider the cost of the power T&D equipment.

Global Power T&D Equipment Market Opportunities

T&D Infrastructure Aging in Developing Nations

Construction of the electrical grid infrastructure for energy supply to consumers worldwide, particularly in developing nations, began long ago. Upgrading and replacing outdated infrastructure is necessary to guarantee a steady electricity supply. Even though updating outdated electrical infrastructure requires significant capital expenditures, replacing and upgrading grid infrastructure's transformers, circuit breakers, and switchgear is needed to cut T&D losses and boost power efficiency. Old substations, uneven load distribution, and a lack of maintenance all contribute to T&D losses and power outages in the power grid infrastructure. The need to upgrade the grid infrastructure is influenced by several variables, including a decrease in T&D losses, the incorporation of cutting-edge technologies in grid substations, and improved power efficiency.

Therefore, the outdated grid infrastructure must be upgraded or replaced to decrease T&D losses and increase electricity efficiency. To guarantee a steady power supply to their consumers, numerous nations worldwide, including the U.S., Brazil, the UK, Germany, and India, are investing in updating their substations and feeder lines. Since they are a vital part of the power T&D equipment, replacing the deteriorating grid infrastructure is projected to raise demand for power T&D equipment. As a result, it is anticipated that players in the global market for electricity T&D equipment will benefit from the aging grid infrastructure throughout the projection period.

Regional Analysis

The global power transmission and distribution (T&D) equipment market is divided into four regions: North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 6.80% during the forecast period. Over the forecast period, the power T&D equipment market will expand due to the ongoing need to modernize and enhance current transmission and distribution infrastructure to meet the rising electricity demand. Grid growth and the market for power T&D equipment are being driven in Asia's growing economies by considerable power plant capacity increase, economic development, and the need to improve access to electricity. The current T&D infrastructure must be continuously mounted and upgraded to meet the region's increasing demand for power. These advances call for various power T&D equipment, such as switchgear, circuit breakers, transformers, and fuses, to secure the electrical system. For its electrical and automation division, Schneider Electric (France) inked a contract with Larsen and Toubro Ltd. (India).

Europe is expected to grow at a CAGR of 6.55% during the forecast period. Due to the market's expansion through an increase in industrial growth, aging infrastructure, which leads to investment in smart grids, rising electricity production, and growing demand for green energy, the Europe power T&D equipment market is anticipated to experience significant growth during the forecast period. The region’s T&D network is also growing due to increased electricity added to the grid. The European government has implemented several steps for ongoing renovations in the system and power plants to maintain a stable grid. Establishing a robust and dependable power infrastructure will support corporate growth, and the government has created favorable regulatory reforms in this direction. 

North America is one of the key regional markets for power T&D equipment due to the region's increasing reliance on renewable energy sources and the increasing demand for T&D network upgrades. Due to falling technological costs and independent energy efficiency programs, the region is seeing considerable investments in energy efficiency. According to the North American Utility Energy Efficiency Program Implementation, the market for power T&D equipment is expected to expand at a respectable rate annually. Due to a rise in the need for power for commercial and industrial applications and an increase in oil production operations, the U.S. market for power T&D equipment is anticipated to experience substantial expansion.

Segmental Analysis

The global power transmission and distribution (T&D) equipment market is segmented by type, application, and voltage.

Based on type, the global power T&D equipment market is bifurcated into the transformer, switchgear, circuit breaker, inductors, capacitors, meters, fuses and equipment, insulators, and others.

The switchgear segment is the major contributor to the market and is estimated to grow at a CAGR of 6.60% during the forecast period. The switchgear controls regulate, and turn on or off the electrical circuit in the electrical power system. Large power transformers have switchgear on both the high-voltage and low-voltage sides. In addition to medium voltage circuit breakers for distribution circuits, control, and metering, equipment may be housed in a building with the switchgear on the low voltage side of the transformers. A transformer and switchgear line-up may be combined for industrial applications in a single housing or unitized substation (USS). Power-conducting components, such as switches, circuit breakers, fuses, and lightning arrestors, conduct or interrupt the flow of electrical power in a switchgear assembly.

Cables are made to meet a variety of needs. They serve as a means of electricity distribution and transmission. It is the assembly of one or more electrical conductors that have been individually insulated and are often held together by an overall sheath. The component assembly transmits and distributes electrical power. Modern cables are available in various diameters, materials, and types, each specifically suited to a particular function. Three main parts comprise a cable: conductors, insulation, and a covering. Depending on how they are used, separate cables have different compositions. Working voltage, current carrying capacity, and ambient conditions are the only significant variables that affect the design and materials.

An electrical transformer is a passive device that transfers electrical energy between circuits via electromagnetic induction. This technique most frequently increases the voltage levels across courses (step-up) or decreases (step-down). Transformers are employed in various industries, including distribution, the grid for power generation, the use of electricity, and transmission. Transformers can be used in multiple installations, such as free-standing substations, ground-mounted pads, pole-mounted pads, and platforms, and they need good thermal, electrical, and magnetic performance. The design of transformers must make them simple to handle, install, lift, and move. Transformers come in various shapes and sizes, categorized according to their working voltage range, core material, winding configuration, and installation site.

Insulators are materials that stop or slow the flow of thermal and electrical currents. They keep conductors in place and keep them apart from one another and nearby structures. Insulators act as a barrier in an electric circuit, limiting the passage of electricity to wires or other desired conducting routes. They are employed in numerous applications that call for them to sustain sizable voltage changes while being subjected to a vacuum. Various materials are employed as insulators, and each application's unique needs generally determine the choice. For instance, rubber and plastics are used to insulate the wiring of homes and industrial facilities from one another and the structure.

Based on application, the global power transmission and distribution equipment market is bifurcated into utility, commercial, and industrial.

The utility segment is the highest contributor to the market and is estimated to grow at a CAGR of 7.00% during the forecast period. Stocks of companies offering essential services like electricity, natural gas, and water are called utilities. Power is produced by generating plants and T&D machinery in the utility segment. Power generated at power plants is moved using T&D equipment to substations and electric utility transformers. The electric utility provides electricity to various industries, including commercial and residential. The following segments comprise electric utility companies: Generators, network operators, traders and marketers in the energy sector, and service and retail companies in the energy sector.

Education facilities, government office buildings, hospitals and medical facilities, and hotels are commercial structures utilized for commercial reasons. The demand for T&D equipment in the retail sector will increase due to the widespread installation of electrical appliances in business spaces, such as air conditioners, ventilators, and lighting systems, as well as the rising demand for electric power T&D equipment. Additionally, the introduction of numerous smart cities has prompted the upgrade of electrical networks, another significant element supporting market expansion. Global use of technologically advanced T&D equipment is also encouraged by rising expenditures in renewable energy infrastructure and awareness of the need to reduce energy losses.

Based on voltage, the global power transmission and distribution equipment market is bifurcated into transportation and distribution.

The distribution segment is the major contributor to the market and is estimated to grow at a CAGR of 5.65% during the forecast period. The component of the electrical power system that distributes electricity for local use is referred to as the distribution of the power system. The voltage levels directly utilized by the distribution system below 110 KV are used to operate it without any further reduction. It is often referred to as a distribution system with low tension. The portion of the power distribution network known as the standard voltage distribution system is responsible for transporting electricity from the distribution transformer to the consumer's energy meter. Primary distribution voltages are those distribution voltages that range between 4 K.V. and 35 K.V.

The mass transportation of electrical energy from a generating location, like a power plant, to an electrical substation, is known as transmission. Long transmission lines are those with lengths more than 150 km and voltages greater than 110 VK. An overhead power line construction is utilized to distribute and transport electrical energy over long distances. It comprises one or more uninsulated electrical cables for three-phase power strung from towers and poles. These cables are typically multiples of three. The range of voltages used to classify long transmission lines in the electricity sector includes: Widely utilized for power transmission to rural and urban locations, 100KV-200KV. High voltage is used for the information of large amounts of electric power, between 200KV and 300KV. Power transmission to significant users is done using the 300KV–400KV range.

Recent Developments

• January 2022- Zeigo, a platform for renewable energy, was acquired by Schneider Electric to increase its global digital procurement capabilities. The acquisition will further Schneider Electric's goals for the digital revolution of the energy industry while enhancing its offering of clean energy services and solutions.
• February 2023- Sumitomo Electric will step up its vanadium redox flow battery (VRFB) business in the US, with plans to invest in local production and installation capabilities.