U.S. Electricity Transmission and Distribution Market Size, Share & COVID-19 Impact Analysis, By Asset Type (Transmission Line and Distribution Line), By End-user (Electric Utility {Public Utility and Private Utility}, Industrial, and Renewables), and Country Forecast, 2023-2030

The U.S. electricity transmission and distribution market size was valued at USD 82.96 billion in 2022 and is projected to grow at a CAGR of 2.95% during the forecast period.

Electricity transmission and distribution (T&D) are vital components of the electric power system, ensuring the efficient and reliable delivery of electricity from power plants to end-users. This process involves transporting electrical power over long distances, reducing the voltage as it nears consumers, and distributing it to homes, businesses, and industries. The market plays a crucial role in delivering electricity from independent power plant generation to end customers. It involves moving electrical power lines over extensive distances from generating facilities to local distribution networks, which then supply electricity to residential areas, industries, and businesses. The ongoing increase in electricity demand due to population growth, urbanization, and industrial expansion necessitates the expansion and modernization of transmission and distribution line infrastructure to meet these growing needs.

During the initial phases of the COVID-19 pandemic, lockdowns and restrictions led to significant changes in electricity demand patterns. Commercial and industrial activities were reduced or halted, leading to a decline in overall electricity consumption.

LATEST TRENDS

Grid Modernization and Digitalization are the Latest Trends in the Market

Grid modernization requires the upgrade and enhancement of existing electricity transmission and distribution infrastructure. This process involves replacing aging equipment, improving grid flexibility, and optimizing overall system performance. Upgrading the grid enables utilities to handle increased electricity demand, integrate renewable energy sources, and tackle challenges related to grid stability and resilience. Integrating digital technologies and advanced sensors into the grid allows real-time data monitoring and analytics. This data-driven approach helps utilities gain better insights into grid operations, identify potential issues, and proactively respond to grid events, ultimately enhancing the grid's reliability and performance.

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The U.S. produced 4,243 terawatts hours of electricity in the year 2022, and in the year 2021, they produced around 4,108 terawatts hours of electricity.

DRIVING FACTORS

Increasing Urbanization is a Significant Factor Driving Market Growth

Growing urbanization acts as a significant driver for this market. As more individuals migrate to urban areas, there's a corresponding surge in electricity demand, necessitating the growth and enhancement of transmission and distribution infrastructure. Urban regions typically experience higher population densities, leading to increased electricity consumption per square kilometer. With this migration trend to cities and towns, there's an amplified requirement for reliable and efficient electricity distribution systems to meet the escalating demand. Urban centers often serve as hubs for economic and industrial development. The increased industrialization and commercial activities in these areas lead to higher electricity consumption for businesses, infrastructure, and factories, thereby requiring robust transmission networks and well-structured distribution grids.

RESTRAINING FACTORS

High Capital Cost Restrain the Growth of the Market

High capital costs are a significant constraint that could hinder the U.S. electricity transmission and distribution market growth. The expenses linked to upgrading, constructing, and maintaining the transmission and distribution infrastructure can pose challenges for utilities and investors. These projects involve extensive networks of transmission lines, substations, transformers, and related equipment, demanding substantial initial investments. Aging infrastructure often requires costly upgrades to enhance efficiency, reliability, and to accommodate modern technologies. The replacement or refurbishment of outdated equipment can incur substantial expenses. Moreover, these projects entail long lead times, encompassing planning, permitting, construction, and commissioning phases, which can lead to increased costs due to inflation, changing market conditions, and financing expenses.

SEGMENTATION

By Asset Type Analysis

Based on asset type, the market is segmented into transmission lines and distribution lines. The distribution line segment accounted for the majority of the U.S. electricity transmission and distribution market share, as distribution lines play a critical role in delivering electricity from substations to end consumers, including residential, commercial, and industrial customers. This segment represents the last stage of the electricity supply chain, connecting the transmission system to the end-users. Distribution lines constitute a substantial network that reaches virtually every populated area, including cities, towns, and rural communities. The extensive coverage of distribution lines ensures the delivery of electricity to a diverse range of customers.

By End-user Analysis

Based on end-user, the market is segmented into electric utility {public utility and private utility}, industrial, and renewables. The renewables segment dominated the market owing to increasing awareness of climate change and the demand to lower greenhouse gas emissions, giving greater prominence to the transition away from fossil fuels. Renewable energy sources, such as solar, wind, hydroelectric, and geothermal, are considered cleaner alternatives with lower carbon footprints. Technological advancements and innovations in renewable energy technologies have led to increased efficiency and cost-effectiveness. Improvements in solar panels, wind turbines, and energy storage systems have made renewable energy more competitive with traditional fossil fuel-based power generation.

KEY INDUSTRY PLAYERS

In terms of the competitive landscape, the market features established and emerging electricity transmission and distribution companies in the U.S. LS Power Grid has secured bipartisan legislative approval for Aroostook Renewable Gateway, an electric transmission line designed to connect renewable energy resources in Northern Maine. The newest model provides customers with the power they need to operate medium to large devices and is portable enough to be packed in a car for any event.

Some other companies with a significant presence in the U.S. market include Duke Energy Corporation, ABB, Siemens, Schneider Electric, Toshiba Corporation, Alstom, and Eaton Corporation

LIST OF KEY COMPANIES PROFILED:

• Duke Energy Corporation (U.S.)


• ABB (Switzerland)


• Siemens (Germany)


• Schneider Electric (France)


• Hitachi Ltd. (Japan)


• Toshiba Corporation (Japan)


• Mitsubishi Electric Corporation (Japan)


• Eaton Corporation (Ireland)


• Crompton Greaves Ltd (India)


• Alstom (France)

KEY INDUSTRY DEVELOPMENTS: 

• July 2023: Duke Energy announced that it had reached an agreement to sell its commercial distributed generation business to a subsidiary of ArcLight Capital Partners, LLC, a significant middle market infrastructure investor, for an enterprise value of USD 364 million.


• February 2023: Energy Hub and Siemens join forces to enhance their ecosystem of partners for their grid software business. EnergyHub offers a world-class grid-edge management solution, integrating its DERMS platform with turnkey program management to enable utilities to scale grid-edge resilience.


• August 2021: Mitsubishi Electric Corporation declared that the company had entered into compliance to acquire U.K.-based Smarter Grid Solutions. Smarter Grid Solutions is a major provider of distributed energy resources (DER) management software for distributed energy resource operators.

REPORT COVERAGE

The market research report provides a detailed analysis of the market. It focuses on key aspects such as an overview of technological advancements, the prevalence of this industry in the U.S., and pricing analysis. Additionally, it includes information about new product launches, key industry developments such as mergers, partnerships, acquisitions, and the impact of COVID-19 on the market. Besides this, the report also offers insights into market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several elements that have contributed to the growth of the market over recent years.

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