DISTRIBUTION AUTOMATION MARKET ANALYSIS

Market Challenges And Opportunities

Market Dynamics- Drivers

Enhancement of reliability and efficiency of distribution system is expected to drive growth of the global distribution automation market during the forecast period. Distribution automation is related to intelligent distribution systems that are fully controllable and flexible. It facilitates the efficient working of a smart grid. The reliability of an electric distribution system is important for both customers and utilities. Reliable electric supply uplifts economic development and growth, public safety and health, and also societal well-being. To improve efficiency and reliability, utilities demand real-time monitoring and remote control of systems and assets such as voltage regulators, capacitor banks, substations, feeder switches, and distribution transformers which ensure uninterrupted supply of power to consumers.

Reduced power outages time is expected to propel the global distribution automation market growth over the forecast period. Most power outages are caused by weather-related damage to overhead power lines. Vehicle accidents, animal contact, human error, and equipment failure also contribute to power outages. Moreover, ice and strong winds cause trees to fall on power lines or poles and sever or break them down. Distribution automation plays a critical role in outage prevention. The communication devices and sensors associated with distribution automation facilitate early detection of equipment that might not be working properly, thus preventing outright failure and allowing the utility company to replace them.

Market Opportunities

Rural untapped market can present lucrative growth opportunities. There is huge scope for distribution automation in rural areas. Increasing dependence on electrical equipment is making continuous power supply more significant, thus creating opportunities for utility companies to target the rural market by providing distribution automation services. Rural consumers have become more aware and can easily compare disparity in the number of supply interruptions between urban and rural distribution networks.

Technological developments can provide major business opportunities. Key companies in the market refocused on research and development activities, in order to enhance the product portfolio and gain a competitive edge in the market. For instance, in September 2013 Cooper Power Systems launched a new SPEAR recloser solution. This product provides the power industry with a cost-effective, dependable Smart Grid device to automate single phase circuits’ up to 38kV and also meet critical power requirements. Furthermore, in September 2013, Cooper Power Systems introduced the Grid Advisor Series 2 smart sensors that help to improve outage management and capacitor bank monitoring while providing real time-critical information not previously available in the marketplace.

Market Dynamics- Restraints

Lack of standardization in communication infrastructure and technology is expected to hamper the global distribution automation market growth over the forecast period. Communication infrastructure is one of the prime factors of distribution automation. The key challenge in this area is to select proper communication infrastructure in order to acquire various field data based on the frequency, volume, and criticality of data transfer. At present global utilities are looking for a cost-effective and efficient solution for their communication needs. Different solutions which address these needs are available in the form of a hybrid model comprising various communication medium. For example, point-to-point connection via lease/copper line from service providers, wireless connection via CDMA / GPRS / V-Sat radio, and others.

Modernization of the existing switchgear is expected to hinder the global distribution automation market growth over the forecast period. Modernization of a utility’s existing switchgear in order to make it adaptable to automation is a prerequisite for every distribution automation project. This requires a huge capital investment. Due to the competitive and regulated environment, existing utilities find it challenging to go for complete automation. Based on their business requirements, some utilities identify strategic locations for automation within their operational area to meet customers’ needs. Currently, automation projects get executed in several phases, beginning with automating critical locations, realizing the benefits, and then automating the rest of the sites in subsequent phases with limited capital budget approved by the regulator.