Latin America Power Distribution Component Market Size, Share & COVID-19 Impact Analysis, By Product (Switchgear {Low, Medium & High Voltage}, Switchboard, Distribution Panel, Motor Control Panel, Circuit Breaker, Push Buttons, Motor Starters, Programmable Logic Controllers, Fire Alarm & Detection Sensors, Emergency Lighting, Fuse & Fuse Holders, Human Machine Interface, Transformer, Reclosers, Power Capacitors, Network Protectors, Line Installation & Protective Equipment), By Configuration, By Insulation, By Installation, By Application, and Country Forecast, 2022-2029

The Latin America power distribution component market size was USD 44.61 billion in 2021. The market is projected to grow from USD 47.53 billion in 2022 to USD 79.11 billion by 2029 at a CAGR of 7.6% in 2022-2029. The global COVID-19 pandemic has been unprecedented and staggering, with power distribution component experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, this market exhibited a decline of -10.1% in 2020 as compared to 2019.

The significant factor that emphasizes these components' development is the growing digitalization in the power industry. Rising automation in power distribution devices significantly helps in reducing electricity generation and is one of the key factors driving the Latin America power distribution component market.

Power distribution component is an electrical equipment that regulates the distribution of electrical energy to different types of equipment. They distribute electrical power to many systems on motor vehicles or to various machines in a factory. These components are rapidly penetrating high voltage utility and industrial distribution networks. Additionally, the growing demand for transmission and distribution control systems will boost the market. Many manufacturers in the industry focus on efficient product distribution and development.

The market is expected to grow due to the increased adoption of these components and the growing trend of consumers acquiring cost-effective configurations. The rapid expansion of low voltage distribution networks in residential and commercial establishments with increasing demand for high operational performance is also expected to drive the market.

COVID-19 IMPACT

Restricted Investment Prospects amid COVID-19 to Hamper Market Growth 

The global market has been moderately impacted by the coronavirus outbreak. Governments around the world have taken various measures to eradicate the spread of the virus by inflicting lockdowns, travel constraints, social distancing, and the closure of workplaces that have altered the way of life and the work of people around the world.

For example, Brazil's total demand for grid electricity decreased by 16% between March and April 2020 compared to the same period in 2019. The drop in demand caused a crucial variation in the usage and distribution of electricity, which further disrupted the optimization of production energy balance timelines and challenges due to demand-side and generation-side uncertainties.

LATEST TRENDS

Expansion of Transmission and Distribution Lines will Support the Market Growth

The surge in power consumption has led to the construction of transmission networks and distribution networks to cater to electricity demand. For instance, the Sterlite Power Transmission Limited Brazilian arm Sterlite Power planned to expand projects in two regions, Minas Gerais and Paraiba. The European Energy Investment report is projected to invest USD 295 billion and USD 290 billion in transmission and distribution infrastructure in 2021-2030 and 2031-2040, respectively.

Furthermore, the rising investment in developing renewable energy and favorable government regulations and subsidies to support the new technology are projected to bolster the industry landscape. The increasing power generation plants using onshore and offshore solar, wind, and hydro sources are anticipated to build new transmission and distribution lines that will propel the application of distribution components.

Growing Installation of Smart Grids and Rising Industrial Infrastructure to Boost Market

The development of smart grids tends to be driven by numerous benefits such as energy-saving through reducing consumption, decreasing balancing cost, leveling the peak demand, precision in the electric bill, and among other benefits, which make the power transmission through grid system more flexible and create prospects for refined grid modernization and smart grids for both utilities and users. Organizations, such as the European Union (EU), and the United States models, are surging their acceptance of smart grids primarily owing to environmental concerns and the desire for a dependable and improved energy grid.

For example, on March 25, 2021, global technology leader Hitachi ABB Power Grid collaborated with Nanyang Technological University, Singapore (NTU Singapore) for a government-led smart grid project that is a fraction of the Singapore Government Energy 2.0 initiative to shape and transform the grid system.

Due to rapid urbanization and increasing awareness, the energy demand is growing, thereby propelling the market. Power distribution components are primarily used in complex electrical substations and industries to withstand varying operation voltage and high environmental conditions to maintain the stability of the distribution voltage.

DRIVING FACTORS

Significant Growth in Digitalization in the Power Industry will Support Market Growth

The power industry is poised to move from centralized, conventional, and security threats to producing a distributed power mix and advancing control systems. Digitization is crucial in the energy industry, comprising control systems, power distribution components, sensors, industrial software, and Industrial Internet of Things (IIoT) technologies. Digitization has also been incorporated into equipment and devices, which helps to improve system efficiency, such as power distribution components, an integral part of the smart grid, which operates independently to regulate voltage and enable power remote administration.

Also, digitized control and advanced features, such as a digital platform to access online, Wi-Fi, Ethernet or cellular options, asset performance optimization, cybersecurity, and other features that make power distribution components play a management role in power distribution to the grid. The increased digitization of the electrical system has enabled control of real and reactive power, improved power quality, limited fault current, and reduced energy consumption.

For example, in February 2021, the Enel Infrastructure and Network division deployed ABB's TXpert ecosystem. This digital distribution transformer is equipped with data-driven capabilities and analytics that help measure transformer aging and contribute to power system reliability. Hence, a wide array of benefits of integrating digitalization in the power industry is surging the product demand in the global market.

Automation in Power Distribution Devices Significantly Reducing Cost of Electricity Generation

Distribution automation is an integrated solution of field apparatus, devices, communication, and software applications to optimize power grid efficiency and reliability. Various electric utility companies are under increasing pressure to improve reliability, minimize customer outages, and optimize system performance. The automated distribution of electricity helps overcome significant economic challenges, such as the increasing cost of electricity generation, the rising cost of maintenance of components, and poor customer service.

The electric power distribution system is an integral part of electrical power systems in delivering electricity to consumers. The implementation of distribution automation improves reliability by reducing outage duration using an auto restoration scheme, improving voltage control, reducing human resources, accurate and valuable planning and operational data information, and reducing interruption costs for industrial/commercial customers. Major electric utilities aim to save costs while providing better customer service. Companies in the Latin America power distribution component market are gaining awareness about these demands and innovating devices that deliver automated power distribution such as in the case of digital panels.

RESTRAINING FACTORS

High Installation and High Cost of the Components will Hinder Market

Harsh environmental conditions, including temperature, pressure, humidity, and water leakage from the ground are vital factors affecting the efficiency and reliability of power distribution components, especially switchgear, transformers, switchboard, and others. Therefore, regulatory organizations formulated stringent regulations and specifications to achieve higher reliability and feasibility to cater to atmospheric conditions. This equipment includes advanced features and an IoT-based control system, which increases the equipment's cost. Furthermore, high installation cost and space constraints across commercial and residential establishments, including private and public apartments, educational promises, offices, data, and communication centers restrict the Latin America power distribution component market growth.

SEGMENTATION

By Product Analysis

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Rising Electrification Requirement in Remote Areas Positively Affected the Growth of Various Electrical Equipment

Based on product, the market is segmented into switchgear, switchboard, distribution panel, motor control panel, circuit breaker, push buttons, motor starters, programmable logic controllers, fire alarm & detection sensor, emergency lighting, fuse & fuse holders, Human Machine Interface (HMI), transformers, reclosers, power capacitors, network protectors, and Line Installation & Protective Equipment (LIPE). The switchgear and motor control panel segments dominated the market, owing to a wide range of distribution networks and product versatility. Furthermore, increasing targets by the regional government for delivering electricity in rural areas and rising investment in industries are promoting the adoption of switchgear and motor control panels.

By Configuration Analysis

Higher Voltage Network Across End-use Industries will Require Higher Ampacity and Voltage Rating

Based on configuration, the market is divided into fixed mounting, plug-in, and withdrawable units. Fixed mounting segment dominated the market, owing to its wide adoption across high voltage utility and industrial distribution networks. In addition, the requirement for a higher voltage network on manufacturing units, process plants, oil & gas exploration and extraction, and similar industrial peripherals demands higher ampacity and voltage rating infrastructure, stimulating the demand for fixed mounting configuration distribution component products.

By Insulation Analysis

Vacuum Insulation Dominated the Market Owing to its Higher Consumer Reliability

Based on insulation, the market is categorized into air, gas, oil, vacuum, and others. The vacuum segment dominated the market, owing to lower competitive influences compared to other insulated technologies, higher consumer reliability, economical price, and some critical factors that will support the growth of vacuum insulation technology.

By Installation Analysis

Rising Need for Upgrading Infrastructure Development will Support the Outdoor Segment 

Based on installation, the market is bifurcated into outdoor and indoor. The market is dominated by the outdoor segment, owing to upgrading infrastructure development and rising requirements for power distribution components. Furthermore, the indoor segment is growing faster due to increasing space constraints and ongoing investment in research & development to produce smart and compact control equipment that will fuel the adoption of these products.

By Application Analysis

Utility Segment Accounting for Maximum Power Distribution Component Market Share

The market is segmented into commercial, utility, industrial, and residential by application. The Latin American power distribution components market is dominated by the utility sectors. The Utility segment generate the electricity power which is used for commercial, industrial, and residential buildings and further distribute the electricity. Moreover, expanding data centers and communication hubs have also raised the energy consumption rate. Therefore, rapid surge in demand for energy to sustain the functionality of the data units will further support the market.

REGIONAL INSIGHTS

The market has been analyzed across Latin American countries such as Brazil, Mexico, Belize, Honduras, Barbados, Jamaica, and the rest of Latin America.

Most Latin American and the Caribbean countries are reforming the electric power sector to establish a new regulatory and institutional environment. According to the International Energy Agency (IEA), the demand for electricity in the Latin American region is expected to grow by 2% annually until 2040. The focus on smart grid technologies by utilities and governments within the energy sector is expected to propel the market growth and play a key role in developing the market. For instance, in February 2021, Neoenergia, a Brazilian Electricity Company, is expanding its smart grids by modernizing its communication networks by adopting Multi-Protocol Label Switching (MPLS).

Mexico also contributes significantly to the Latin America power distribution component market growth. In the country's National Electrical System Development Program, by April 2021, the generation capacity had increased to 89,479 MW, representing an increase of 7.6% compared to 2020. 35.5% of this power generation was from clean energy sources, and 64.5% was from conventional sources. According to the IEA (International Energy Agency), the country's population is expected to grow by over 150 million by 2050, increasing the energy demand. High electricity rates have impacted industrial manufacturing, operations, and commercial activities.

KEY INDUSTRY PLAYERS

ABB Emphasizes on Developing Novel Products and Updating Existing Products to Reinforce its Product Portfolio

The global market is fragmented and has observed stiff competition from numerous regional and global participants. ABB is presently one of the largest energy service companies in the world and, with its advanced services, continues to lead the global market. The company remains to emphasize on providing world-class services to its users around the world. The other major key players include GE Power, Schneider Electric, Siemens, Eaton, and Mitsubishi Electric Corporation.

LIST OF KEY COMPANIES PROFILED:

• ABB (Switzerland)


• Schneider Electric (France)


• Siemens (Germany)


• Mitsubishi Electric Corporation (Japan)


• Eaton (Ireland)


• Alstom (France)


• GE Power (U.S.)


• L&T (India)


• Powell Industries (U.S.)


• Hitachi Group (Japan)


• Cerisol (Brazil)

KEY INDUSTRY DEVELOPMENTS:

• October 2021 - By 2027, Basel will transition to sustainable e-bus operations with ABB's assistance. This contract is part of Basel Public Transport's (BVB's) battery-electric bus conversion program.


• June 2021 – Mitsubishi Electric and Siemens Energy signed an MOU to conduct a feasibility study on the joint development of high voltage switching solutions with zero global warming potential that substitutes greenhouse gases with clean air for insulation.


• February 2021 – General Electric, a world energy leader in providing equipment, solution, and services, has awarded a contract to build two grid substations in the south of Morocco. The substations will be completely built using GE technology, including grid codes, detailed design, compensation solutions, power transformers and reactors, gas and air-insulated switchgear, and full automation solutions.


• August 2021 - South Africa's Lucy Electric offers load shedding solutions. A disruption in the distribution network can often lead to an interruption of power, which is critical to business and economic growth.


• July 2021 - GSI chooses GE Power Conversion to design, develop, manufacture, engineer, install, commission, and monitor the power converters for the SIS100 ring accelerator at Darmstadt's new Facility for Antiproton Ion Research (FAIR).

REPORT COVERAGE

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The research report presents a comprehensive industry assessment by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches have been adopted to make meaningful assumptions and views to formulate the report. Furthermore, the report covers a detailed analysis and information for the segments, including type, application, and region, helping our readers understand the global industry.

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