Electricity Transmission and Distribution Market Size, Share & COVID-19 Impact Analysis, By Asset Type (Transmission Line and Distribution Line), By End-User (Electric Utility, Industrial, and Renewables), and Regional Forecasts, 2023-2030

The global electricity transmission and distribution market size was valued at USD 317.89 billion in 2022. The market is projected to grow from USD 329.47 billion in 2023 to USD 429.43 billion by 2030, exhibiting a CAGR of 3.9% during the forecast period.

Electricity transmission and distribution is a part of the energy industry accountable for building, maintaining, and planning the infrastructure that transfers electricity from power plants to consumers. Electricity transmission refers to transporting high-voltage electrical power from power generation plants to distribution substations via transmission lines and associated equipment such as capacitors and transformers. On the other hand, electricity distribution comprises the supply of electricity from the distribution substations to consumers, such as industrial facilities, businesses, and others, via a network of distribution lines and related equipment such as transformers and meters.               

COVID-19 IMPACT

COVID-19 Pandemic Caused Noteworthy Disruptions to the Market Growth

Due to lockdowns and restrictions on mobility and workforce, several construction projects for new electricity transmission and distribution infrastructure were delayed. The delays have resulted in increased costs and reduced returns on investment.

Some examples of the delayed projects are as follows:  

• Saudi Arabia-Egypt power line project halted over COVID-19. Egypt’s electricity interconnection project with Saudi Arabia was delayed due to the coronavirus pandemic. The Egyptian Electricity Transmission Company postponed the reception of bids for the power line project up to 60 days. All contracts were planned to be inked before the end of May 2020.


• In June 2020, the 1,600-MW Jharkhand project was hindered due to the COVID-19 lockdown. After the operation, the project would supply 1,496 MW to the Bangladesh Power Development Board.

In addition, the pandemic also interrupted global supply chains, leading to a lack of equipment needed for electricity transmission and distribution projects. This has also caused delays and increased costs. Furthermore, the COVID-19 outbreak also caused a significant reduction in energy demand due to the closure of industrial and commercial facilities. This led to a decrease in the revenue of electricity transmission and distribution companies.

Developments related to decreased power demand:

• According to the International Energy Agency, India witnessed one of the biggest electricity demand destructions: the COVID-19 outbreak led to power demand collapsing by around 28% up to March 2020. Under the strict lockdown, which started on 25^th March 2020, power demand from essential services, the residential sector, and hospitals peaked, whereas commercial activity and industrial demand dropped significantly. By the end of August 2020, the overall power demand of India had not recovered to previous levels earlier to COVID-19.

LATEST TRENDS

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Increasing Investment in Renewable Energy Infrastructure is a Key Trend in the Market

There is a rising renewable energy infrastructure investment trend. As renewable energy sources, such as solar and wind power, become more famous, there is a rising requirement for transmission infrastructure to transfer that energy from the source to consumers. This has led to increased investment in high-voltage transmission lines and other infrastructure that can house renewable energy sources' variable and irregular nature. This trend has shifted investment patterns from conventional transmission and distribution infrastructure to renewable energy transmission infrastructure. In addition, incorporating renewable energy sources into the grid needs the development of a new distribution infrastructure that can accommodate the distributed and decentralized nature of renewable energy sources. This has led to increased investment in microgrids, smart grids, and other distribution infrastructures that can allow the incorporation of renewable energy sources into the grid. This trend has shifted investment patterns from standard to renewable energy distribution infrastructure.

For instance, in February 2023, China started constructing the ultrahigh-voltage electricity transmission project. It is said to be the world’s highest project located in Southwest China's Sichuan Province and Xizang Autonomous Region to Central China's Hubei Region. The transmission project will transfer around 40 billion kilowatt hours of electricity comprising hydroelectricity from the upper stream of the Jinsha River, which is equal to one-sixth of the yearly power demand of the Hubei Region.

DRIVING FACTORS

Growing Electricity Demand due to Urbanization and Population Growth is Driving the Electricity Transmission and Distribution Market

The rising demand for electricity drives electricity infrastructure investments due to urbanization and population growth. As urban areas expand and populations grow, the demand for electricity surges, requiring the development of the present infrastructure and expansion of new transmission & distribution lines. Most of this development is expected to come from emerging countries, specifically Asia Pacific and Africa, where populations are rising quickly, and urbanization is growing. In emerging nations, governments are investing in new electricity transmission and distribution lines to link rural areas to the grid and enhance access to electricity for their populations. For instance, India has initiated numerous plans, such as the Pradhan Mantri Sahaj Bijli Har Ghar Yojana and Deendayal Upadhyaya Gram Jyoti Yojana, to develop electricity access in rural areas.

Increased Attention on Reliability and Energy Security is Propelling the Market Growth

The increasing attention to dependability and energy security propels electricity infrastructure investments. In recent years, the world has seen several power outages and blackouts caused by cyberattacks and natural disasters. These events have highlighted the prominence of having a dependable and safe electricity supply to assist societies and economies. To address this challenge, governments are investing in updating and developing their electricity infrastructure. This comprises building new transmission lines & substations and advancing matured power grids. One of the major schemes for improving reliability and energy security is executing smart grid technologies. Smart grids utilize software to manage better and control the flow of electricity across the grid, communications systems, and advanced sensors. They allow real-time energy utilization monitoring, offer more precise demand forecasts, and enable more effective power distribution.

Some of the developments regarding the smart grid are as follows:

• In November 2022, the Grid Deployment Office (GDO) of the U.S. released a funding opportunity for the Grid Resilience and Innovation Partnerships Program, comprising the Smart Grid Grants. The Smart Grid Grant program will invest around USD 3 billion (USD 600 million/annually for fiscal years 2022 to 2026) in grid resilience solutions and technologies.


• In October 2022, Iberdrola signed USD 231 million top-up loans with an EU bank for smart grids in Spain.

RESTRAINING FACTORS

Regulatory and Policy Frameworks Are Major Restraints for Market Development

The rules and policy frameworks of different countries are limiting the electricity transmission and distribution market growth. Electricity transmission and distribution systems are subject to local, regional, and national regulation, which can create major barriers to investment. Regulators regularly levy complex requirements for transmission and distribution companies such as safety regulations, technical standards, and environmental clearances. Furthermore, rules can adapt slowly to evolving market situations and technological developments, leading to inadequacies and suboptimal investment decisions. For instance, regulatory delays in approving new transmission lines or advancing existing infrastructure can lead to bottlenecks and congestion in the grid, which can surge consumer costs and hamper the execution of energy projects.

SEGMENTATION

By Asset Type Analysis

Increasing Focus on Energy Efficiency and Conservation is Driving Investments in Electricity Distribution Line

The market is segmented based on asset type into transmission line and distribution line. Distribution lines segment garnered the highest market share. Investments in distribution lines are necessary to enhance the efficiency of the electricity grid and reduce energy losses. This can be achieved through various measures such as upgrading or replacing outdated infrastructure, installing advanced monitoring and control systems, and implementing smart grid technologies. According to the International Energy Agency, governments alone, as part of their clean recovery packages, had dedicated USD 75 billion of spending as of 31^st March 2022 on auctions, low-carbon electricity generation, consumer subsidies, and direct funding of manufacturing facilities, transmission, and distribution through tax credits.

By End-User Analysis

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Electric Utility Supplies Electricity to Consumers, which Drives Investment in the Transmission and Distribution Market  

Based on end-user, the market is split into electric utility, industrial, and renewables. The electric utility segment garnered the highest electricity transmission and distribution market share. These companies are accountable for supplying electricity from power generation sources to consumers, and as a consequence, they invest heavily in the infrastructure required to achieve this task. Electric utilities invest in transmission and distribution infrastructure to guarantee that electricity is dependable and efficiently delivered to consumers. Electric utilities invest more in transmission and distribution infrastructure than other players in the market as they have a regulatory duty.

Uganda Electricity Transmission Company Limited and Tanzania Electric Supply Company Limited will be accountable for the transmission line's maintenance, construction, and planning. The 30-km-long Masaka–Mutukula–Kyaka–Nyakanazi–Mwanza transmission project will carry AC current via a single-circuit cable. The project is presently in the planning phase and is anticipated to be commissioned in 2025.

REGIONAL INSIGHTS

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The global market is analyzed across five regions, North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Asia Pacific is the dominating region in the global market and is anticipated to witness the fastest growth rate during the forecast period due to rapid industrialization, urbanization, and increasing demand for electricity. India and China are expected to lead the market, driven by their large populations and increasing investments in renewable energy sources.

North America plays a significant role in the market. The North America market is projected to witness moderate growth in the coming years due to rising electricity demand and the requirement to update and develop the present grid infrastructure. Government initiatives also propel the market to encourage renewable energy and enhance grid resiliency. In November 2022, the Biden-Harris Administration, via the U.S. Department of Energy, announced USD 13 billion in new financing opportunities for developing and transforming the nation’s electric grid.

Increasing investments in renewable energy infrastructure and shifting toward a low-carbon economy propel the European market growth.

The Latin America market is distinguished by rising demand for electricity, a need for infrastructure development, and a rising interest in renewable energy sources. Many countries in the region are investing in developing their electricity transmission and distribution systems to serve the rising electricity demand and consolidating renewable energy sources into their grids.

KEY INDUSTRY PLAYERS

Duke Energy Corporation is Dedicated to Enhance its Electric Transmission Infrastructure 

Duke Energy Corporation is a major electricity transmission and distribution company for several reasons. Firstly, the company has a strong presence in the U.S., one of the largest markets. It is one of the largest electric power holding companies in the U.S., serving millions of customers in the U.S.

For instance, in May 2022, Duke Energy constructed a new transmission line to help serve expected growth in Citrus County. The 11.5-mile, 230-kilovolt transmission line will be in the middle of the existing Holder substation in Beverly Hills and the new powerline substation in Crystal River.

List of Key Companies Profiled:

• Duke Energy Corporation (U.S.)


• National Grid plc (U.K.)


• Enel SpA (Italy)


• E.ON SE (Germany)


• NextEra Energy, Inc. (U.S.)


• Dominion Energy, Inc. (U.S.)


• Tokyo Electric Power Company Holdings (Japan)


• American Electric Power Company, Inc. (U.S.)


• Power Grid Corporation of India (India)


• State Grid Corporation of China (China)

KEY INDUSTRY DEVELOPMENTS:

• January 2023 - The non-regulated commercial brand of the U.S. utility Duke Energy (NYSE: DUK), called Duke Energy Sustainable Solutions (DESS), has recently purchased a 175-MW solar project located in Colorado from the U.S. subsidiary of German solar developer Juwi, which is based in Colorado.


• December 2022 - India revealed a plan worth USD 29.6 billion to construct transmission lines connecting renewable energy sources, as it aims to increase its clean-power capacity almost threefold by 2030. According to the power ministry's statement, the project will link solar power plants located in the sun-drenched deserts of Rajasthan and Gujarat and wind farms in Tamil Nadu to the national grid. This initiative will enhance India's inter-regional transmission capacity from 112 gigawatts to 150 gigawatts by the decade's end. The absence of transmission lines has hindered the progress of renewable electricity in India. As the nation strives to reach net-zero carbon emissions by 2070, it must address this deficiency to ensure the flow of clean energy to urban and industrial centers that are often far from power sources.


• October 2022 - Duke Energy outlined its strategy to address customers' growing demand for affordable and clean energy. The company has planned to invest USD 145 billion over the next decade in crucial energy infrastructure to fulfill this need and achieve net-zero carbon emissions by 2050. These efforts are expected to provide significant economic advantages to the communities served by the company.


• October 2022 - The State Grid Corporation of China initiated the construction of an ultra-high voltage (UHV) power transmission project in the Sichuan province and Chongqing municipality, located in southwestern China. The project costs around USD 4 billion and involves the development of 658 km of 1,000 kV double-circuit lines, with some sections being built at elevations above 4,000 meters. The project is anticipated to be operational by 2025, enabling the main power grid in Southwest China to increase its voltage from 500 kV to 1,000 kV, facilitating the transmission of 35 TWh/year of power.


• May 2022 - An energy agreement between Tanzania and Uganda has been signed to develop a 400 kV transmission line from Masaka, Uganda to Mwanza, a port town in Tanzania, passing through Mutukula, Kyaka, and Nyakanazi. Tanzania Electric Supply Company Limited (TANESCO) and Uganda Electricity Transmission Company Limited (UETCL) will collaborate in the transmission line's planning, construction, and upkeep. The 30-km-long transmission line will have a single-circuit cable that will transport AC. The project is still in the planning stage and is projected to commence operations in 2025.

REPORT COVERAGE

An Infographic Representation of Electricity Transmission and Distribution Market

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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.

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