Power Grid Market

Power Grid Market

The global Power Grid market is forecast to expand at a CAGR of 5.4% and thereby increase from a value of US$276.4 Bn in 2023 to US$399.4 Bn by the end of 2030.

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Market Introduction and Definition

The integrated system of electrical infrastructure that enables the production, conveyance, and distribution of electricity on a global scale is referred to as the global power grid market. The seamless transmission of power from diverse sources, encompassing both conventional and renewable energy, is made possible by this interconnected network to satisfy the increasing requirements of industries, businesses, and households. The power grid comprises an intricate network of power plants, substations, transformers, and transmission lines, which operate in concert to guarantee a dependable and effective provision of electricity throughout different regions.

The expanding worldwide power grid market is driven by a multitude of contributing factors. A substantial impetus is the escalating electricity demand resulting from urbanization, population expansion, and industrial development. Furthermore, the increasing prevalence of renewable energy sources, including wind and solar power, is driving the advancement of grid infrastructure that is more advanced to accommodate these intermittent energy contributions. Market growth is further propelled by technological advancements, the digitization of power grids, and the imperative for improved grid reliability and resilience. The implementation of innovative technologies and the promotion of smart grid deployment by the government are crucial factors that significantly influence the course of the worldwide power grid market.

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Market Growth Drivers

Substantial Growth of the Worldwide Power Grid Industry

The proliferation of renewable energy sources emerges as a primary catalyst for the substantial growth of the worldwide power grid industry. Amidst global efforts to address the urgent matter of climate change mitigation, there is a significant transformation occurring in the energy sector towards more environmentally friendly and sustainable alternatives. There is a growing awareness among governments, industries, and consumers regarding the critical nature of transitioning from fossil fuels to renewable energy sources to meet environmental objectives and guarantee sustainable energy security in the long run.

The integration of renewable energy sources requires a significant transformation of the current power grid infrastructure. In contrast to conventional power sources, renewable energy sources such as wind and solar demonstrate fluctuations in their generation patterns, underscoring the criticality of grid flexibility and adaptability. There has been a notable increase in investments directed towards accommodating intermittent energy sources in the global power grid market. Sophisticated technologies, including smart infrastructure and energy storage systems, are crucial in addressing the difficulties presented by the intermittent nature of renewable energy. Energy storage technologies, such as batteries, enable the maintenance of a dependable and continuous power supply by storing surplus energy during periods of high generation and subsequently discharging it during periods of low generation.

Widening Cybersecurity Attacks

Cybersecurity poses an emerging constraining factor in the global power grid market. With the progressive digitization and interconnectivity of power infrastructures, they expose themselves to cyber threats that have the potential to undermine the integrity and dependability of the entire system. The implementation of smart grid technologies, which facilitate instantaneous control and communication, presents fresh avenues for malevolent entities to gain access to systems and exploit weaknesses. The spectrum of cybersecurity risks encompasses ransomware assaults that specifically target the operational networks of utilities, as well as potential grid disruptions that result in extensive outages. The intricacy of contemporary power grid infrastructure, characterized by its wide-ranging elements and interconnections, further complicates the task of protecting against cyber threats. Grid administrators and utilities are entrusted with the responsibility of safeguarding vital resources, including substations and control systems, against ever-changing cyber threats.

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Market Restraints

Substantial Investments and Infrastructure Enhancements to Meet the Escalating Electricity Demand

One significant obstacle confronting the worldwide power grid industry is the imperative for substantial investments and infrastructure enhancements to meet the escalating electricity demand. An increase in energy consumption is being propelled by factors such as population growth, urbanization, and industrial expansion. As a result, power generation, transmission, and distribution capabilities must be upgraded proportionally. In numerous areas, the prevailing power grid infrastructure is antiquated and frequently fails to fulfill the changing demands of a contemporary, electrified society. Integration of variable and frequently remote renewable energy sources, which necessitates substantial investments in transmission lines and grid modernization to efficiently transport generated power to demand centers, exacerbates this difficulty.

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Opportunities

Rapid Proliferation of Electric Vehicles

An important opportunistic factor driving the worldwide power infrastructure market is the rapid proliferation of electric vehicles (EVs). With the global community shifting towards a low-carbon and more sustainable future, there is a growing momentum behind the electrification of transportation. Consumers, governments, and manufacturers are becoming more cognizant of the environmental advantages that electric vehicles (EVs) offer, including the reduction of greenhouse gas emissions and reliance on conventional fossil fuels. The current transition towards electric mobility signifies a distinct and advantageous circumstance for the power grid industry to develop and prosper.

The proliferation of electric vehicles requires the establishment of a resilient charging infrastructure, thereby establishing an interdependent partnership with the power grid. To accommodate the augmented electricity demand, the incorporation of widespread EV charging stations necessitates an expansion and modernization of the current grid infrastructure. As investments flood in to deploy energy storage solutions to facilitate the efficient charge of electric vehicles, upgrade transmission and distribution networks, and implement smart grid technologies, this presents a substantial growth opportunity for the power grid market. The implementation of charging infrastructure in strategic locations, including commercial zones, highways, and urban centers, increases the demand for a power grid that is both resilient and flexible. Moreover, the possibility of bidirectional energy flow, in which electric vehicles can function as mobile energy storage units, introduces novel prospects for load management and grid balancing, thereby enhancing the flexibility and stability of the grid.

Analyst’s Viewpoint

The convergence of various factors is causing a significant shift in the global power infrastructure market, which is ultimately reshaping the industry's terrain. Numerous pivotal factors contribute to the projected expansion of the market in the years to come. The primary driver continues to be the escalating worldwide electricity demand, which is propelled by factors such as industrial expansion, population growth, and urbanization. The increase in demand drives significant investments in infrastructure for power generation, transmission, and distribution, presenting profitable prospects for market expansion. The shift towards more environmentally friendly and sustainable energy sources is an additional critical element that will determine the trajectory of the power infrastructure industry subsequently. The global commitment of governments and industries to reduce carbon emissions is accelerating the implementation of renewable energy technologies. The increasing prominence of solar, wind, and hydropower projects necessitates substantial investments in transmission and generation infrastructure. The ongoing decline in the cost of renewable technologies contributes to their escalating economic viability when integrated into power infrastructure, thereby stimulating market expansion. Moreover, the development of resilient transmission and distribution networks is intrinsically linked to the future of the electricity infrastructure market. Renewable energy source integration frequently necessitates substantial grid infrastructure enhancements to guarantee uninterrupted power flow and grid stability. Digital solutions for real-time monitoring and control are currently being integrated into transmission and distribution networks as governments and utilities across the globe initiate massive modernization initiatives. The expansion of electric vehicles (EVs) is an additional factor influencing the market for electricity infrastructure. The imperative for a comprehensive electric vehicle (EV) charge infrastructure requires financial commitments towards both generation and distribution capabilities. In addition, the implementation of Vehicle-to-Grid (V2G) technology, which enables electric vehicles (EVs) to make contributions to the grid, presents novel opportunities for load distribution and grid equilibrium, thereby augmenting the dynamic nature of the power infrastructure domain.

Supply-side Dynamics

The global power infrastructure market is characterized by the existence of industry leaders, including Toshiba Corporation, General Electric, Siemens AG, and ABB Ltd. These corporations possess considerable sway as a result of their proficiency in delivering an extensive array of products and solutions in the sectors of power generation, transmission, and distribution. The market is primarily driven and adopted by the United States, China, India, Germany, and Japan, which are all dominant nations. For example, China is making substantial investments in power infrastructure projects throughout Asia and Africa as part of its Belt and Road Initiative, thereby contributing to the growth of the market. India is a major driver of demand for modernized power infrastructure, specifically in the transmission and distribution sectors, due to its ambitious renewable energy targets.

Technological innovation, strategic alliances, and an emphasis on sustainability are being utilized by the market leaders in power infrastructure to reshape the environment. As an illustration, General Electric is a leader in the development of digital grid technologies and advanced energy storage solutions, which increase the overall efficiency of power systems. Siemens AG is a proactive participant in smart grid initiatives, employing digitalization as a means to streamline grid operations and improve dependability. The market is benefiting from the expertise of ABB Ltd. in grid automation and high-voltage transmission solutions. By utilizing EcoStruxure solutions, Schneider Electric focuses on integrating renewable energy into power systems. These stakeholders are collaborating to propel the market toward a future characterized by increased interconnectivity, digitization, and sustainability. They are also addressing the changing demands of the global power infrastructure sector and establishing a precedent for industry progress.

Market Segmentation

What Component Will Be Targeted the Most for Installations?

Transformers to be Dominant owing to their Functionality in Transmission and Distribution of Electricity

It is anticipated that the transformer segment will hold the highest market share in the global power grid market. Transformers are critical components in the transmission and distribution of electricity, serving to enable the secure and effective movement of power throughout the electrical infrastructure. The segment that specializes in transformers is poised to capture a significant portion of the market due to the critical nature of managing voltage levels and ensuring grid stability in light of the increasing electricity demand, which is exacerbated by the integration of renewable energy sources. In contrast, the variable speed drive market is anticipated to expand at the quickest rate. The demand for variable-speed drives is propelled by the growing emphasis on energy efficiency and the incorporation of advanced technologies into industrial processes. These devices achieve energy efficiency and sustainability by regulating the pace of electric motors following the desired output. This is in line with the worldwide effort to promote sustainable and energy-efficient practices.

Which Power Source to be Focused on the Most Regarding Sales?

Natural Gas to be Most Viable Owing to a Well-Known and Environmentally Friendly Fossil Fuel

It is anticipated that natural gas will hold the most significant market share in the worldwide power generation industry. Natural gas has become a well-known and comparatively environmentally friendly fossil fuel, providing a harmonious blend of efficiency and ecological concerns. Due to its extensive application in the production of electricity and its ability to accommodate both baseload and peaking power demands, natural gas is a dominant component in the power generation portfolio. Simultaneously, the renewables sector, which includes solar, wind, and hydropower, is anticipated to experience the most rapid growth. The exponential growth of renewable energy capacities is propelled by the shifting global focus towards low-carbon energy sources and the growing concern for sustainability. The accelerated growth of renewable energy sources is bolstered by technological advancements, declining costs, and favorable government policies, which position this sector as a central area for forthcoming developments in the power generation industry.

Which Application Are Expected to Benefit the Most from Revenue Generation?

Generation-based Solutions to be Most Profitable due to Increased Focus on Energy Portfolio

In the global market for power infrastructure, it is anticipated that the generation segment will hold the greatest share. This is predominantly attributable to the considerable financial commitments and emphasis placed on energy portfolio diversification, which encompasses the incorporation of sustainable energy sources and the upgrading of traditional power generation infrastructure. In light of the persistent increase in worldwide electricity demand, the generation sector continues to be an indispensable element in fulfilling these expanding energy requirements. On the contrary, the transmission sector is expected to experience the most rapid growth rate. Increasing investments in transmission infrastructure are motivated by the integration of renewable energy projects, which are frequently situated in remote areas, and the need for dependable and efficient long-distance electricity transportation. Prominent utilities and governments are collaborating on initiatives to augment and modernize transmission networks by integrating cutting-edge technologies that bolster the resilience of the grid and adapt to the ever-changing energy environment.

Top Regional Markets

Why is North America Emerging as a Dominating Region?

A Firmly Established Dominance in the Energy Sector to Provide Revenue

It is expected that North America will hold the largest market share in the worldwide electricity infrastructure industry. Multiple elements contribute to this preeminence. To begin with, the power infrastructure in North America is a sophisticated and firmly established system that utilizes a combination of conventional and renewable energy resources. The region's leadership position in the global power market is a result of its substantial investments in smart technologies and grid modernization, which support its dedication to transitioning to greener energy. In addition, a high energy consumption rate per capita, robust economic expansion, and industrial development all contribute to the overall demand for a sophisticated and dependable power infrastructure. The United States assumes a crucial role in influencing the configuration of the electricity infrastructure in North America. The nation possesses a varied energy portfolio, which comprises nuclear power, renewable energy sources, and natural gas. The increasing emphasis on renewable energy, in conjunction with governmental endeavors and private capital infusions, bolsters the global market standing of North America.

What Opportunities Lie in South Asia & Pacific for Manufacturers?

Swift Urbanization and Rising Demand for Electricity to Promote Growth

South Asia and the Pacific are anticipated to witness the most rapid expansion of the worldwide power infrastructure industry. A multitude of factors contribute to this exponential growth. To begin with, the area is distinguished by a swift urbanization and a rapidly expanding population, which have resulted in a significant surge in energy requirements. To address the increasing demand, governments in South Asia and the Pacific are making substantial investments in power infrastructure, overlooking the electrification of rural regions. Furthermore, notable progress is being achieved in the implementation of renewable energy sources in the region; nations such as New Zealand, Australia, and India are enthusiastically adopting solar and wind power initiatives. Clean energy initiatives expand due to favorable government policies, including feed-in tariffs and incentives for the development of renewable energy. Furthermore, the growing prevalence of electric vehicles and the imperative for robust and intelligent power utilities are factors that augment the need for sophisticated power infrastructure solutions in the South Asia & Pacific area.

Competitive Intelligence and Business Strategy

Prominent entities in the worldwide power infrastructure industry, such as General Electric, Siemens AG, ABB Ltd., Schneider Electric, and Toshiba Corporation, maximize their market share through the implementation of diverse strategies. An imperative approach entails an unwavering commitment to innovation and technological progress. These businesses make substantial R&D investments to develop innovative solutions that meet the changing demands of the electricity industry. As an illustration, General Electric has gained recognition for its ongoing endeavors in the development of cutting-edge energy storage technologies, solutions for optimizing the grid, and applications for smart grids. Siemens AG is a leader in digital transformation, employing data analytics and artificial intelligence to improve the dependability and efficacy of power systems.

Furthermore, market leaders employ strategic portfolio diversification to encompass the complete value chain of electricity infrastructure. As an illustration, General Electric functions in the domains of power generation, transmission, and distribution, providing an extensive array of products and services. These companies establish themselves as one-stop-shop providers by offering comprehensive solutions, thereby appealing to clients in search of streamlined and integrated solutions for their power infrastructure requirements. Furthermore, these players' dominance is bolstered by their active engagement in significant projects across the globe and their global perspective. Toshiba Corporation maintains a significant portion of the market through its participation in diverse electricity infrastructure initiatives on a global scale. To summarize, the market leaders utilize a comprehensive strategy that integrates sustainability initiatives, diversification, innovation, strategic partnerships, and global engagement to maintain and increase their market dominance in the ever-changing and fiercely competitive global power infrastructure industry.

Key Recent Developments

New Partnership

ABB and OneSubsea reached a support agreement in February 2022 for ABB's subsea multiphase compression system utilized in the Ormen Lange field operated by Shell. Subsea compressors were powered by variable-speed actuators and subsea transformers supplied by ABB.

Market Impact: The support agreement between OneSubsea and ABB for ABB's subsea multiphase compression system, which is utilized in Shell's Ormen Lange field, represents a substantial technological advancement in the realm of subsea oil and gas extraction. Subsea compressors' dependability and performance are improved through the integration of ABB variable-speed actuators and subsea transformers, representing a technological advance in the subsea energy industry. By establishing new benchmarks for subsea compression systems and encouraging greater adoption of advanced technologies in the oil and gas sector, this innovation is likely to have a positive effect on the European market.

Power Grid Market Report Scope

Power Grid Market Research Segmentation

By Component:

• Cable
• Variable Speed Drive
• Transformers
• Switchgears
• Others

By Power Source:

• Oil
• Natural Gas
• Coal
• Hydro Electric
• Renewables
• Others

By Application:

• Generation
• Transmission
• Distribution

By Region:

• North America
• Europe
• East Asia
• South Asia & Oceania
• Latin America
• Middle East & Africa