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Smart grid could lead to increased substation automation spending

By Donna Donowitz
January 14, 2011
Advanced networking and integration hardware, such as serial to Ethernet converters, could be in demand during the next few years because new smart grid installments are creating a new market for networking tools in electric substations.

According to a recent report from the Newtons-Evans Research Company, North American spending for substation automation and integration currently stands at $5 million. However, advances in Smart Grid technology and new installations could bring the industry's value as high as $10 billion by 2013, the report states. The global market for substation automation and integration could reach between $28 and $40 billion during the period.

For the most part, the report said spending would focus on substation resident equipment with the intelligence to handle the networking, automation and integration demands associated with smart grid deployments. Increased spending could also funnel towards workers needed to install systems integration solutions.

The growth can also be attributed to new technological advances and a recovering economy. The report said 2008 and 2009 experienced slow growth that optimists could categorize as moderate expansion. Poor economic conditions hampered new hardware installations during the period, and recovery is driving current growth. North American expansion in the substation automation and integration industry has also been spurred by government investment. U.S. stimulus funding has been pouring into the industry, the report found, and has helped companies make substation networking upgrades.

When 2010 concluded, Newtons-Evans estimated between 10 and 12 percent of all substations had been automated. In many cases, the stations that are automated and integrated are newly constructed projects, the report said. Overall, older substations are expected to be upgraded as the economic and workforce resources become available. The report said many utility providers are struggling to find workers with the necessary training to install intelligent substation systems. Furthermore, immediate industry growth is expected to be relatively moderate. As a result, new substations will likely be automated and integrated, but the process of upgrading old stations could take many years, the report said.

An engineer at materials manufacturer Corning recently told Automation World substations are becoming more advanced because networking tools, computers, sensors and even robots are automating information dissemination to the necessary utility channels. He said substations are increasingly using servo drives, I/O systems and safety devices on an integrated network.


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