Power quality investment leads growing North American distribution automation market


Nicole Juarez,
Analyst, IMS
Austin, TX, U.S.A. — (METERING.COM) — July 5, 2012 – The global market for distribution automation equipment generated more than $11 billion in revenue during 2011, with forecast growth to more than $18 billion annually by 2017, according to IMS Research in a new report.

Equipment related to power quality is anticipated to be one of the fastest growing segments of the distribution automation market, particularly in North America, where revenues are expected to grow from more than $400 million in 2011 to a projected $700 million in 2017.
Capacitor banks and voltage regulators are increasingly being automated, allowing these devices to be remotely controlled and work in direct coordination with one another in Volt/VAR optimization and conservation voltage reduction (CVR) schemes. Both of these applications require investment not only in the heavy metal, but increasingly there are more sales of switches and control modules to help automate schemes.
“Adding electronics and controls allows equipment to act independently and/or be programmed in a system-wide scheme, allowing smart grid functionality to be accomplished,” comments analyst Nicole Juarez. “The surge in the power quality segment of the distribution automation market is coming from additional revenues being realized from retrofit sales. This is most pronounced in North America, where new construction has slowed and aging infrastructure makes the addition of controls onto existing heavy metal equipment in the field an easily justifiable investment for utility companies.”

In these regions, capacitor controls and voltage regulator controls are expected to grow faster than their heavy metal counterparts. With the continued regulatory change that is expected, where some state’s PUCs are enforcing decoupling schemes, more utility companies will see a strong ROI on investing in not only power quality equipment on the grid, but also additional equipment such as sensors and other monitoring devices.

In summary, in the short term, the appeal of Volt/VAR optimization schemes and the strong opportunity for retrofit opportunities for capacitor controls and voltage regulator controls will result in strong growth for power quality equipment. In the long term, the increased use of renewable generation and electric-vehicle charging will cause new challenges for the grid that will make the case for this group of devices even stronger, along with promoting the emerging market for energy storage on the grid.

For more information and to order the report, see Distribution Automation Equipment – World – 2012.