Over the next decade, electric utilities will invest $3.2 trillion globally in new and replacement transmission and distribution (T&D) infrastructure.
This infrastructure investment will be necessary due to growing electricity demand, aging assets and new power generation projects, including intermittent renewable resources that are straining the grid, according to a new dataset published by Northeast Group.
"Utilities and governments across the world are developing new generation projects, particularly renewable energy ones, to meet rising electricity demand. But often missing from the headlines is the massive investment that will be required in T&D infrastructure to accommodate these projects," according to Ben Gardner, President of Northeast Group.
T&D investment will be significant in all major geographies. The largest new investment over the next decade will be in China and India as they seek to meet rising electricity demand while also modernizing their grids.
Developed countries will also be investing significantly, particularly in smart grid infrastructure and renewable energy integration. France alone plans to invest over $1 billion per year in T&D infrastructure focusing on integrating renewable energy, while US utilities will invest nearly $20 billion per year in transmission, up from just $10 billion per year back in 2010.
Developed countries will also lead the way in distribution-level smart grid infrastructure (distribution automation) investment. In many developed countries distribution automation – including substation automation, fault detection, isolation and restoration schemes (FDIR), Volt/VAR optimization (VVO), and additional grid monitoring and control infrastructure – will reach 15-20 percent of total annual T&D investment. This will compensate for modestly lower legacy T&D investment as distributed generation and demand response programs gradually reduce the need for new power lines and substations.
Several leading global vendors including ABB, GE/Alstom, S&C, Schneider Electric and Siemens will be vying for this significant market. They will compete with each other as well as a number of local and regional players.