Distribution Automation Market Size, Share & Industry Analysis, By Utility (Private Utility and Public Utility), By Component (Field Devices, Software, and Services), and Regional Forecast, 2024-2032

The global distrubtion automation market was valued at USD 13.46 billion in 2023 and is projected to grow from USD 14.43 billion in 2024 to USD 25.87 billion by 2032, exhibiting a CAGR of 7.64% during the forecast period(2024-2032). The Asia Pacific dominated the distribution automation market Share with a share of 37.51% in 2023.

The distribution automation systems (DAS) consist of various software and hardware devices. A utility can analyze, collect, optimize, and automate data to improvise the operational efficiency of the electricity supply. Hardware devices include various switches, processors, sensors, and communication network devices. These devices ensure accurate monitoring, protecting, controlling, and maintaining the supply network.

These systems are designed to provide real-time operational notifications related to various components of the grid, including fault detectors, voltage regulators, capacitor controllers, and switches. This information is further shared with other intelligent field devices and algorithms combine them with transmission systems and customer transactions. An efficient DAS infrastructure's significant functions include demand optimization, asset optimization, distribution control analysis, and distribution optimization.

The COVID-19 pandemic has disturbed the global market severely, which causes substantial revenue losses. Automation technology providers and device manufacturers face many challenges, including obtaining raw materials & components required for production, which has delayed the delivery of products. Furthermore, strict lockdown regulation has impacted the production facilities across the globe.

Distribution Automation Market Trends

Advancements in IoT and Communication Technologies to Propel Industry Growth

The Internet of Things (IoT) is emerging speedily and is one of the innovations that have changed the way we live and work. With the proliferation of connected devices and the Internet IoT has become a dominant force in many industries, including healthcare, manufacturing, transportation. Here are some of the developments in IoT that have shaped the current landscape. One of the most important advancements in IoT is the development of edge computing. Edge computing allows devices to process data locally without a cloud connection. This enables faster processing, better security, and lowers the cost of IoT devices.The new scientific advancements in IoT and communication devices are expected to propel the demand for DAS technology during the forecast period. For Instance, Siemens (Germany) has introduced a smart Internet of things (IoT) solution, ‘MindSphere.’ MindSphere is a cloud-based open IoT operating system that connects products, installations, systems, and machines and enables the operator to work with advanced analytics. MindSphere provides a broad range of connectivity protocols for devices & enterprise applications, industrial applications, and advanced analytics applications.

Merger and Acquisition Initiatives by Key Players to Boost Industry Growth

Various industry players are continuously performing organic and inorganic expansion activities to augment their product portfolio and reach across the globe, stimulating the adoption trends of this kind of distribution system. For Instance, In September 2019, G&W Electric acquired Tozzi Electrical Equipment to expand its markets worldwide and thus enhance its power grid solutions to meet the specified IEC standards. In addition, Builders FirstSource Inc., Dallas, acquire WTS Paradigm LLC, a Middleton, Wisconsin-based software solutions and services provider, for USD 450 million.

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Distribution Automation Market Growth Factors

Exponential Increase in Global Electricity Demand and Grid Infrastructures

A global increase in electricity demand and grid infrastructures is expected to unveil new opportunities for the market. The need for energy efficiency, instant fault detection, and protection in the supply network will spur the technology demand. Additionally, growing demand from residential, commercial, and industrial sectors and growing distributed energy generation, especially across the emerging economies, will create new prospects for increased technology adoption.

For instance, according to the International Energy Outlook 2019, the U.S. Energy Information Administration (EIA) estimates that world energy consumption will grow by 50% between 2018 and 2050. Most of this growth will arise from countries, not the Organization for Economic Cooperation and Development (OECD). The growth will focus on regions where strong economic growth is surging demand, especially in Asia Pacific. 

Upgrade of Aging Power Distribution Infrastructure

The upgrade of aging power distribution systems is expected to drive the distribution automation market growth. Growing demand for intelligent and modernized power distribution infrastructure will likely create ample opportunities for the market as the intelligent receiving system of distribution automation terminals usually involves the processing and analysis of a large amount of data and the transfer of computing tasks from traditional centralized servers to mobile edge nodes near the terminals can significantly reduce data transmission delays. This enables real-time data processing and decision-making, which improves the efficiency and responsiveness of the admissions process.In addition, government mandates to augment grid efficiency are propelling the adoption of DAS technology across various utility and energy sectors. Also, the market is driven by the increasing share of renewable energy resources.

In June 2021, Snohomish County PUD made electric system improvements in their existing substations. The PUD has work scheduled on many substations, including automation upgrades, equipment replacement, and standard maintenance. In addition, the PUD plans to replace their existing aging poles, assess and treat thousands of poles, and replace miles of aging underground cable.

RESTRAINING FACTORS

High Initial Installation Cost Associated with Deployment May Hinder Pace

The high installation cost associated with the DA systems is expected to restrict the market growth. Also, technical issues linked with these systems are expected to hinder the market growth. In addition, the vulnerability to cyberattacks is also a prominent factor that creates concerns for the end-users, which in turn hampers the market’s growth.

Distribution Automation Market Segmentation Analysis

By Utility Analysis

Public Utility Sector to Account for Significant Share Owing to Growing Publically Owned Utilities During Forecast Period

The industry is categorized into two divisions based on utility, including public utility and private utility. The public utility sector is expected to witness a substantial rise owing to the increasing number of publicly owned electric utilities across the globe. In addition, the public utility sector is expected to grow on account of government offerings to public utilities.

Furthermore, the private utility sector is expected to grow at the highest CAGR during the market forecast period. The growth is attributed to the increase in providing funds by the government for these systems. In addition, nations such as India and China demand high electricity due to increasing urbanization. This factor is attracting investors to invest the amount in DA systems, which propel the market growth for the segment.

By Component Analysis

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Introduction of New Field Devices is Projected to Augment Segment Outlook

The industry is classified into field devices, software, and services based on components.

The field devices segment is expected to hold a significant portion of the global market due to field devices' increasing deployment in these systems. These devices are an integral part of the distribution network and help manage losses from voltage fluctuations and power outages. In addition, field devices help grid operators with reliability and outage management, asset health management, reactive power management, and distributed energy resources.

Furthermore, the software segment is expected to grow significantly because of a growing trend of adaptation of new technological advancements in IoT and communication systems. Factors such as low maintenance cost, low restoration time, and improved efficiency are responsible for boosting the growth of the market segments. These services remotely monitor and control the electric supply network by acquiring track information and monitoring the switch status. It further maintains an optimal distribution track by monitoring power quality, error, and remote control of the distribution track.

REGIONAL INSIGHTS

Asia Pacific to Hold Largest Market Share due to Increasing Investments in Smart Grid Projects

The market has been analyzed geographically across five key regions, including North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

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Asia Pacific is projected to hold the leading share across the industry and was valued at USD 5.05 billion in 2023. The region is expected to see a high demand for DA solutions due to increasing investments in smart grid projects. The area's significant growth comes from countries such as Japan, China, and Australia. In addition, factors such as rapid industrialization and rising movement towards clean energy to meet growing energy needs are expected to enhance the region's market growth positively.

Europe also has significant growth due to the growing investments in grid expansion coupled with increasing complexity in the power distribution infrastructure. Germany, the UK, and France are essential countries contributing to the European market. Also, in countries such as Spain, Italy, and Denmark, the technology is rapidly growing due to increasing smart grid investments with robust in-built transmission and distribution automation assets. In addition, increasing demand for energy efficiency in the power supply is likely to propel market growth in the region. Players such as Siemens and Schneider Electric are significant contributors to the European market. In June 2021, Siemens laid the foundation stone for its future branch in Frankfurt's new Gateway Gardens district. The new office named ‘The Move’ consists of two buildings with over 35,000 square meters of office space. 

The North American market is expected to grow significantly during the forecast period, owing to new technological advancements in IoT and communication systems. In addition, the presence of several significant players is expected to boost the market growth in the region. For Instance, Schweitzer Engineering Laboratories (SEL) released the SEL-421 Protection, Automation, and Control System with enhanced Time-Domain Link (TiDL) technology. TiDL technology is a protection-centered digital secondary system that replaces copper connections with fiber to increase safety and decrease costs. TiDL has data-sharing capabilities, purpose-built merging units, and modern configuration software.

Latin America is expected to grow because of the significant demand coming from Brazil and Mexico owing to increasing industrialization in the region.  Brazil holds a considerable market share and dominates the market in the region, followed by Canada. The electricity distribution in Brazil is commercialized by two different markets – the regulated electricity market (ACR) and the free electricity market (ACL). In ACR, generators and distributors contract via government auctions, and ACL, consumers buy energy directly from generators or traders.

The Middle East and Africa are expected to grow because government mandates to enhance grid efficiency are driving the demand for distribution automation technology across the energy and utility sectors of the region. GCC is expected to dominate the region due to the transition of traditional grid to smart grid, fueling the region's market growth. 

List of Key Companies in Distribution Automation Market

Mitsubishi Electric is launching New Products to Fortify its Market Position

The global market is significantly competitive, with several players actively operating in these systems. The industry participants emphasize launching new devices such as fault indicators, smart relays, automated feeder reclosers, automated capacitors, and voltage regulators to enhance customer reach. Furthermore, the organizations are concentrated on entering into mergers and acquisitions to expand their technological horizons.

Mitsubishi Electric, one of the leading manufacturers of electrical and electronic products, is introducing products to foster its reach in the automation sector. For Instance, in June 2021, Mitsubishi Electric announced the coming launch of its T-series 2.0kV insulated gate bipolar transistor (IGBT) module for industrial use, the world's first IGBT with 2.0kV withstand voltage. This module is best suited to increase energy efficiency and reduce the size of renewable energy power converters, which are in high demand owing to the growing use of renewable energy power supplies. The module will be placed at the Applied Power Electronics Conference (APEC) 2021 Virtual Exposition from June 15 to 16.

LIST OF KEY COMPANIES PROFILED:

• Siemens (Germany)


• Schneider Electric (France)


• S&C Electric Company (U.S.)


• Eaton (Ireland)


• GE (U.S.)


• Mitsubishi Electric (Japan)


• Schweitzer Engineering Laboratories (SEL) (U.S.)


• ABB (Switzerland)


• G&W Electric Co. (U.S.)


• Toshiba (Japan)


• Hubbell (U.S.)


• Hitachi (Japan)


• Itron (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• November 2023 - Hitachi Energy announced that it received an order from Transmission and Distribution IT & OT Systems LLC for a complete set of the next-generation nationwide load dispatching system. The System is being deployed by Transmission and Distribution IT & OT Systems LLC, a joint venture established in September 2023 by 10 domestic power transmission and distribution companies, which are general transmission and distribution companies.


• November 2021 - ABB completed the sale of its mechanical transmission division, Dodge, to RBC Bearings Incorporated for USD 2.9 billion. With the sale, the company completed the first of three previously announced division separations. This is an important milestone in ABB's asset management strategy and further strengthens its balance sheet.


• June 2021 - GE announced that its addition of Proficy operations analytics to its industry-leading Proficy suite of software solutions to increase digitization by supporting modernization, continuous improvement, and enterprise visibility and scalability with new cloud-based predictive analytics. Proficy operations analytics is a self-provisioning, ready-to-deploy SaaS-based predictive operations center for AI and industrial IoT.


• May 2021 - ABB launched a new addition to its Relion product family, designed to support safe, smart, and sustainable electrification. Packed with the innovative simplicity, the REX610 makes it easy to protect networks, industrial processes, and people easier.


• March 2020 – ABB Switzerland launched a new version of the REX640 protection relay, strengthening communication security and flexibility in power generation and distribution sectors.

REPORT COVERAGE

The global distribution automation market research report offers an in-depth analysis of the industry. It further provides details on the adoption of distribution automation systems across several regions. Information on key market trends, drivers, opportunities, threats, and market restraints can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players and their strategies in the market.

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