Over the next decade, the world will need to invest between $140.2 billion to $170.5 billion per year on traditional transmission and distribution (T&D) infrastructure in order to keep pace with growth in electricity demand.
An additional $8 billion to $27.3 billion will be invested annually in smart grid infrastructure to improve the efficiency and reliability of T&D grids, according to a new dataset by Northeast Group, LLC.
"The significant need for new power generation capacity makes the headlines on a daily basis. But what is seldom discussed is the equally important need for new T&D infrastructure, which needs an enormous $1.9 trillion in cumulative investment by 2024. This includes substations, power lines and associated equipment and new technology. T&D investment typically represents about 40 percent of total power infrastructure spending," said Ben Gardner, president of Northeast Group.
Investment in grid modernization or smart grid is accounting for a growing share of the overall market. In 2014, distribution automation investment is projected to account for 5.4 percent of total T&D spending. This will grow to nearly 14 percent by 2024, with a compound annual growth rate exceeding 13 percent.
Cumulatively, the world will invest $230.2 billion in distribution automation between 2014 and 2024. This will include spending on substation automation; fault detection, isolation and restoration (FDIR); volt/VAR optimization (VVO); and additional grid monitoring and control technologies in the distribution grid.
Geographic regions will vary in their rates of investment. Emerging markets will represent the largest growth in T&D spending, with Africa and Southeast Asia the fastest growing regions as they build out new infrastructure to boost their electrification rates. However, North America and Europe will see lackluster growth in traditional T&D infrastructure spending of around 1 percent, but will account for the majority of smart grid spending.
The individual country with the largest amount of traditional T&D spending will be India, which will outpace China by 2024. Smart grid annual spending on distribution automation will be concentrated in Europe ($11.5 billion per year), followed by North America ($7.5 billion) and East Asia ($6.1 billion), as these regions modernize their existing electric infrastructure.
Source: Electric Light & Power
View all SMART GRID Bulletins click here
Enter your email-id to subscribe to theSMARTGRID Bulletins