Category: Articles by Charles Newton

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Historical Perspectives on Energy Management Systems Usage in American Electric Power Utilities

An Energy Management System (EMS) is a suite of generation and transmission applications software tools used to monitor, control, and optimize the performance of generation and transmission systems. Energy management systems are designed to reduce energy consumption, improve the utilization of the system, increase reliability, and predict electrical system performance as well as optimize energy usage to reduce cost. Over the past 40 years and more, I have been able to visit EMS installations in many states and in several other countries. Each site visited was somewhat unique in style, size, operational set-up and wall displays.

From the late 1960’s until the early 1990’s, energy management systems were highly customized for many of the 200 large American utilities (then mainly IOUs involved with vertically integrated operations) that required the capabilities offered by such technology as was available in that era. Several of these early systems were developed with precursor versions of today’s “digital twin” technology in the form of an operator training simulator which mimicked the real-time operational energy management system.

Early Days
Control Data Corporation (Minnesota) had been a leading supplier of EMS mainframe hardware platforms and systems to U.S. utilities through most of the 1970’s, with computers from Harris Corporation (Florida), IBM (New York) and GE (Arizona) also supplying mainframe and early minicomputers to serve as the platforms for early EMS applications. Early international EMS suppliers, like Westinghouse UK, ABB, Areva and Siemens were instrumental in supplying systems used in Western Europe, Asia and South America and in a few African countries (South Africa primarily). Some of these suppliers used international computer manufacturers including the French company, Groupe Bull (Honeywell Bull)

The era of “forklift” system replacements occurred for 30 years or more after the introduction of large EMS installations, at least through the first two generations of systems.
Vendor switches occurred among many of the first- and second- generation systems users, meaning hardware and software were both to be replaced with third and fourth generation systems available during the 1990s through 2010 era. These third-generation systems became available from start-up firms led by ESCA (Washington) and OSII (Minnesota) as well as from the principal global EMS suppliers like ABB, GE and Siemens – all active EMS market participants in North America. Moore Systems (Texas) also developed EMS capabilities. ESCA became a key business unit of Areva T&D, while OSII remained independent until its recent acquisition by AspenTech (and AspenTech’s parent, Emerson), finalized in 2022.

There were also a few custom systems developed during the late 1960’s to early 1970’s by defense and aerospace firms. Consolidated Edison procured a system developed by Boeing Corporation, using IBM 360’s as platforms. The Canadian aerospace firm CAE developed an early EMS for PSEG in New Jersey and another for Grant County PUD in Washington state.

In 1997, GE and Harris Corporation (another aerospace/telecom equipment firm) had formed the GE-Harris Control Systems business based in Melbourne, Florida. A few years later, CAE sold its interests in utility control systems to another large Canadian firm, SNC Lavalin. In 2010, SNC Lavalin’s Energy Control Systems business was sold to GE. During the 1990’s, the French firm Areva T&D became a global market participant with its wide range of e-terra control systems and infrastructure offerings. The company’s electric power business units were first divided up and sold to Alstom and Schneider in 2009. By 2015, GE had acquired Alstom’s electric power business units, including the popular e-terra system offerings.

Minicomputers take over
During the late 1970’s and early 1980’s mainframe computers were being replaced as EMS platforms by minicomputers, led by offerings from Digital Equipment Corporation (DEC) and Hewlett-Packard (HP). Modcomp, Gould, Data General, Prime Computer and a few others were also providing SCADA systems platforms to early SCADA systems developers like ACS, QEI, Tejas Controls, Telegyr (L&G) and several others from 1975 onward.

Restructuring the Power Industry
During the late 1990’s and onward, many states had required major investor-owned utilities to separate (unbundle and restructure) generation operations from T&D operations. ISOs and RTOs were put in place nationwide just before the turn of this century and oversaw interstate transmission operations in conjunction with the 200 or so utilities owning transmission assets. By 2019 EMS vendors were taking note from the ADMS community and began using the term “advanced energy management system” (AEMS) to indicate significant new EMS capabilities including the integration of renewables and energy storage and their impact on grid operations and voltage stability. Coupled with the rapidly increased speed of processing and analyzing contingencies, and improving the ability to dispatch and curtail distributed energy resources, these developments have helped enhance operator capabilities and visibility into the real-time electric network.

As the power generation mix and transmission requirements have become more complex, AEMS developments and capabilities are keeping pace with such needs. The impact of artificial intelligence will continue to provide human operators with more and better information and will likely become a discriminator among the key AEMS market participants. Recently, generation management systems (GMS) have been developed that now include many of the generation-side applications that were (and continue to be) components of an EMS as described in our market overview report on GMS.

EMS/AEMS Components
Three major components of a modern EMS include:

  1. Native Services: data acquisition and control; graphical user interface; linkage/connectivity options to other systems; large database capabilities. There are many objectives of an energy management software including an application to maintain the frequency of a Power Distribution System and to keep tie-line power close to the scheduled values.
  2. SCADA Services: load shedding, load restoration, network status; sequential control, switch order management, playback of historical events.
  3. Advanced Power Systems Applications (or Network Application Services): to include generation dispatching and control [AGC], transmission security management; voltage transient stability; unit commitment; state estimation contingency analysis, demand forecast, and dispatcher training simulator).

Factors affecting current period activities in the EMS/AEMS market include improvements in linkages to external systems (ISO/RTO MMS, AI-enhanced analytics, ADMS, energy storage systems, DERMS, WAMS) as well as new capabilities to react to NERC/FERC changes in bulk power regulations, transmission monitoring (DLR), cyber security guidance, visualization software, intelligent alarm processing, renewables integration linkages) also provided by third party firms such as ETAP, Nexans, OATI, CYME, Milsoft and others.

Newton-Evans’ 2024-2026 Market Overview Series on OT/IT Systems
The values of EMS software provided by such suppliers to EMS installations are estimated in the OT/IT series of market overviews, as well as is the overall EMS domestic market size and market trends. Related to EMS in the Market Overview series on OT/IT systems, market management, GIS, CIS/CRMS, OMS, GMS, SCADA/DMS, ADMS, DERMS and cyber security software are also provided. These topics are each treated separately in the 2024-2026 series of OT/IT market overviews just released by Newton-Evans. More information on the OI/IT series can be found here: https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-electric-utility-market-for-ot-it-systems/.

Article Sources: OSII, PSC Consulting, Schneider Electric, GE Vernova, ETAP, Hitachi Energy, Siemens Energy, Schneider Electric, Newton-Evans archived files.

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A Look at the U.S. Medium Voltage Electric Power Equipment Services Market

The total MV services market is very large – possibly in excess of $15 billion. This larger view of the MV services market encompasses multiple segments such as field and in-plant equipment maintenance and refurbishment; construction-related services for distribution substations and MV under-grounding activities; training classes for utility/C&I engineering and operations staffs; site analysis and permitting for distribution utilities and renewables projects; and MV equipment testing services, including commercial test labs and field service diagnostics and testing firms. In addition, vegetation management and telecommunications services are both very large power utility-related businesses in their own right, with significant portions of segment revenue obtained from medium-voltage projects, and these topics will be covered in articles later in 2024.

U.S. Medium Voltage Equipment Services
The U.S. MV equipment services market itself is very large (>$4 billion is our estimated minimum market size) in total, comprised of at least three major sub-segments and is served by hundreds of national, regional and local-area electrical equipment service providers.

While much of MV equipment services growth for third party firms seems likely to be in the 3-5% range, there are a few areas that may see larger increases in revenues, including the upper MV ranges of switchgear, along with gas-insulated units and underground equipment. As well, transformer maintenance, repairs and retrofits are commanding more attention and relying on third party services as new transformer prices, product availability and long lead times affect grid reliability.

Numerous MV Maintenance Market Participants
In multiple research studies conducted over several decades, Newton-Evans Research has found more than 275 U.S.-based companies and organizations provide one or more types of MV equipment-related services to electric utilities and to C&I customers. Each of these was earning related revenues of at least $10 million in annual revenue, with about 45-50 firms in the group earning in excess of $20 million annually from the provision of MV-related services. There is a growing group of domestic firms earning in excess of $250 million in MV services revenue. Another large segment of commercial providers offers services in addition to equipment maintenance, repair and refurbishment. These include utility staff training services, equipment testing services and some portion of construction related (design/build) services.

When it comes to MV equipment services, two product categories account for the lion’s share of segment revenue. These are switchgear/circuit breaker and distribution transformer equipment services.  Let’s take a closer look at these.

MV Switchgear Services Revenue Assumptions based on Third Party Service Firm Website Information
Switchgear services (maintenance, repair, refurbishment and re-manufacturing) are often grouped with similar Circuit Breaker services and together account for several hundred million dollars of utility and C&I expenditures. There are national, regional and local area third-party T&D services firms that provide various levels of equipment services for utilities and the C&I communities. Some of the national names prominent in the switchgear services, maintenance and repair/refurbishment market include Shermco, CBS Services and Saber Power Services.

While many services firms are in the “small business” category and earn less than $10 million annually, there are several others that earn in excess of $100 Million from a variety of T&D equipment service offerings.

Distribution and Power Transformers
While Newton-Evans estimates as much as $900 million is spent annually on electric power transformer services and replacement parts, the majority of this amount goes for power transformers. Nonetheless, there are several firms that specialize in service and repairs for pole-top and pad-mount distribution transformers. Among the large firms that service, repair and refurbish transformers of all sizes and offer nationwide services, include companies such as IPS, Sunbelt Solomon, RESA and others. A number of smaller firms specialize in maintenance, repairs for distribution transformers at a regional level, including Northeast Power, UTB Transformers and Valley Transformers, Inc.

Twenty years ago, a Newton-Evans survey found that many utilities did not bother with repairs to, nor did they consider third party maintenance, of pole-mount distribution transformers. Unit replacement was easier and faster than was rework and repair. At that time, manufacturing capacity for pole-mount units was sufficient to meet domestic U.S. demand, and lead-times were quite short, compared with today’s market. Most electric power utilities had been able to procure and store scores or hundreds of spare pole-top units for emergencies or time-based replacement up until the COVID years.

All Other MV Equipment Services: The third arm of MV equipment services we consider to be comprised of “all other” equipment of significant cost – that is, costing multiple thousands of dollars. Based on a small sample utility survey conducted during late 2023, it appears that relatively low-cost equipment including reclosers, sectionalizers, fuse links, distribution line monitors, fault current limiters, surge arresters and MV capacitors were very likely to be replaced rather than repaired.

Our next article on MV Services will focus on construction-related services for distribution substations and MV undergrounding activities; training classes for utility/C&I engineering and operations staffs; site analysis and permitting for distribution utilities and renewables projects; and MV equipment testing services, including commercial test labs and field service diagnostics and testing firms.

Keep in mind if you need to have an understanding of the U.S. medium voltage equipment market, our report series of two to four page U.S. market overviews, covering 17 MV equipment types, may be helpful to you. The link for for further information and to place an online order is here:
https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-transmission-and-distribution-equipment-market-medium-voltage-series/

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Substation Automation and Integration Services – Guiding the Way to the Digital Substation

Substation Automation Integration Specialists are firms (or business units of large electrical equipment manufacturers) that can assist with or develop and provide a full or partially automated electric power substation on a turnkey basis, leading to “digital substations.” These companies help utilities and C&I firms toward digital substations.  Such firms include dedicated businesses (see examples below) or can be business units of larger companies engaged in the electric power automation business as EMS/SCADA suppliers, RTU/PLC/PAC/gateway manufacturers or protection and control specialists.  As well, T&D engineering firms, from the nation’s TOP 10 in size and reach, to dozens of smaller but capable regional service businesses are involved in helping utilities and C&I firms integrate and automate (or digitize) the nation’s nearly 70,000 utility T&D substations and another several thousand substations that are managed and operated directly by C&I firms, including large renewables installations.

 

Four “tiers” of substation integration providers are included in our assessment:

  • Specialist substation automation integration service revenues in 2022.es
  • SCADA industry participants with substation devices (RTUs, FEPs, Relays, IEDs, platforms) offering substation integration expertise
  • National T&D Engineering Services firms with substation integration expertise
  • Regional T&D Engineering Service firms

Together, these automation and integration services providers accounted for nearly $400 million of substation automation and integrations services-related revenue in 2022 (Newton-Evans estimate).  Click on chart to expand view.

Turnkey costs for substation integration services range from an estimated $45-55,000 for a small distribution substation having few feeders to upwards of $250,000 for a large transmission substation. Some metro-area MV substations with 20 or more feeders can cost upwards of $300,000 to automate and provide device integration services.

The automation equipment/device costs are in the range of $50,000-250,000 for a distribution substation and can range up to $500,000 for smart equipment and integration services in EHV transmission substations.

These totals shown in the chart below for automation and integration services are but a portion of the total expenditures allocated to electric power substations.  New substation construction (greenfield) and up-rating activities (brownfield) account for a few billion dollars, while substation equipment and communications costs also account for several billion additional dollars.

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Wind Turbine Controls Usage Patterns Study Underway

During April and early May, Newton-Evans Research is conducting studies on the American wind power market.  Of specific interest is the  wind turbine controls segment of the fast-growing renewables business.

We are researching the types and brands of control devices and control systems that are in use among the more than 72,000 wind turbines installed in the United States as of January 2023.¹

Importantly, most controls within the wind turbine itself are provided by the OEM – the wind turbine manufacturer.  In the U.S., that likely means one of six manufacturers that account for 90% of all utility-scale wind turbine installations as of January 2023.  Three of the six (GE, Vestas, Siemens Gamesa) accounted for a whopping 82% of wind turbine installations.  Three others (Mitsubishi, Nordex and Suzlon) account for nearly 6,000 operational wind turbines operating throughout the country.  In addition to the major OEMs, there are more than 10 other manufacturers having at least 50 or more operational U.S. wind turbine installations.  See Figure 1. (Click on the figure to expand the view).

When it comes to wind turbine controls, multi-site wind farm operators and owners have more say in determining control devices and control systems selections as needed, especially for controls that reside external to the wind turbine.   Larger wind farms configured with wind turbines from multiple manufacturers also tend to have more interest in procuring PLCs, SCADA systems and plant-wide and multi-plant control and monitoring systems.  Wind farm operators and owners also tend to make more of the turbine control selections when it comes to retrofitting wind turbines.

There are more than a dozen wind controls specialist firms actively marketing and installing pitch and yaw controls, and/or condition monitoring systems in the United States.  Many wind turbine control specialists active in the U.S. are headquartered in European countries having extensive wind power installations and decades of wind power experience, led by firms based in Denmark, with others in Spain, Germany, Austria and Italy.  Some companies provide their own fine-tuned PLCs and wind-specific SCADA systems (you can read our 2021 article on renewables SCADA here): https://www.newton-evans.com/scada-systems-for-the-renewables-energy-industry-and-adms-for-utilities/.

We are still seeking a few additional participants to two short surveys.  One survey is geared to wind farm operators/owners, and can be answered by experienced wind turbine technicians.  The second survey addresses the OEM and wind turbine controls supplier community.  If you qualify to participate, please contact Chuck Newton (cnewton@newton-evans.com) and a link to the appropriate survey will be forwarded. 

Note:  1. Wind turbine installation data is provided by the U.S. Geological Service:  https://eerscmap.usgs.gov/uswtdb/

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A Look at the 2021 T&D Services Market in the United States

Over the past decade, the need for on-site T&D equipment servicing and parts replacement has grown, both for electric utilities and for commercial and industrial customers. While Newton-Evans has studied this portion of the T&D market in a cursory manner over the decades, we have not produced a multi-client study of this important segment of T&D-related spending. Even now, our definition of T&D services is not all-inclusive, as there is significant related expense incurred for equipment testing services (about $450 Million) and even more investment for replacement parts for ancillary equipment like structures, connectors, line tools, et al, accounting for multiple hundreds of millions of dollars.

While much of the cost of T&D equipment services and repairs is grouped as operating expense, we believe there may be some “replacement parts” costs that are likely classified as capital expenditures, especially costly parts for large power transformers and components for HV substation equipment.

The total value of expenditures for T&D equipment-related services and replacement parts in the United States is likely around the $4 Billion level as of 2021, and our estimate for global spending on T&D services is in the $18-20 billion range. These estimates exclude the costs of equipment unit replacement. Together, T&D equipment services, including repairs and replacement parts, accounted for perhaps $3.6 Billion to upwards of $4.2 Billion in 2021. See Figure 1.

Looking at T&D equipment field services, including repairs and maintenance services performed by third parties, our mid-point spending estimate is $1,750 Million. See Figure 2.

Similarly, the spending for replacement parts for HV, MV, LV equipment and for power and distribution transformers is estimated to be in the $2,200 Million range. See Figure 3.

The overall split of spending between utilities and the C&I community is about a four-to-one ratio in our view, with utilities accounting for the bulk of all HV, MV and transformer-related spending, but with the C&I group accounting for substantial portions of LV equipment services and replacement parts, some MV and transformer services, and occasional HV equipment servicing.

The largest portion of spending among the four categories studied for this article (HV, MV and LV equipment, and transformers of all sizes) is for MV equipment services and replacement parts. HV equipment services follow, then comes spending for power transformer services and LV equipment services.

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Outlook for Grid Modernization from IT and OT Perspectives: Recovering the Momentum Lost During COVID

Over the past two years, the pandemic has affected our lives, our businesses and the nation’s plans for infrastructure modernization, including the electric power grid. We had earlier (2020) forecasted rather robust growth in spending on IT, OT and smart grid initiatives in a grid modernization report prepared for a client organization.

During the first year of the pandemic, Newton-Evans conducted a small sample study (25 large and mid-size utilities) of the impact of COVID on electric power transmission and distribution capital investment projects.

Observations from that 2020 study indicated capital investment plans for some utilities had been scaled back by as much as 50% for 2020 and 2021. Other respondents reported that capital projects had been deferred for 12, 24 or even 36 months. A few utilities held fast to their pre-pandemic investment plans as long as they could do so.

In Figure 1, note our belief that total 2021 expenditures for the combination of IT, OT and smart grid projects likely reached about $14.2 Billion. In 2020, Newton-Evans had estimated that 2021 would likely see about $16.1 Billion in these combined expenditures, but by that year, the pandemic had firmly taken hold, restricting the availability of utility workforce personnel. COVID also impacted the manufacturing of some electrical equipment and provision of consulting and engineering services related to IT, OT and grid modernization projects.


Figure 1.
NOTE: Total IT + OT + SG Expenditures = $14.25 Billion
($5.55 Billion for IT + $5.30 Billion for OT + $3.4 Billion for “pure” Smart Grid)
$14.25 B = about 4.75% of electric utility operating revenue or 3.6% of total electricity sales.
IT spending alone likely less than 2% of operating revenue.

Now, the question arises – What is included in “pure” smart grid investment? Here, we include smart grid devices and equipment that acquire and transmit data and other signals to monitor and/or control utility field operations outside of the substation fence. For the most part, these are 21st century developments or generational improvements over earlier “legacy” devices. Pole top RTUs, distribution line fault indicators and feeder monitors, multiple types of controllers (for capacitor banks, automatic circuit reclosers, voltage regulators, line mounted monitoring devices et al) and automated switches and protective devices).

The related advanced communications infrastructure including built-out portions of the utility wide-area networks, local area networks and supporting infrastructure for automatic metering equipment are also placed in the “pure” smart grid bucket. IT system components related to smart grid are typified by meter data management systems, the customer services links to outage management systems, and geographic information systems to name a few. Operations side systems and applications would include advanced distribution management systems which collect and aggregate the thousands of field data points now configured with intelligent electronic field devices mentioned earlier that assist in more effective operation of the distribution grid.

By the third quarter of 2021, some recovery in capital spending for transmission and distribution was underway, based on recent discussions with a variety of industry sources. Even now, in the first quarter of 2022, we are still in a cautionary progression, given the lingering concerns over, and the effects of the OMICRON variant on the utility labor force and on delays in equipment availability in some situations. By 2023, I anticipate combined investment in IT, OT and grid modernization projects as shown in Figure 3 below will increase to more than $16.6 Billion. When compared with a pre-pandemic outlook calling for about $19.2 Billion in such investment in the coming year this leaves a shortfall of $2.6 Billion.

Importantly, when utilities have been compared with other industries related to IT spending, at first glance the industry appears to invest relatively less of its revenues in IT and OT. However, we have found that even in this pandemic area, with total U.S. electric power revenues approaching $400 Billion, the investment in combined IT and OT, plus related portions of grid modernization technology projects (exclusive of the cost of grid modernization equipment), the level of capital spending for grid modernization is closer to the 3.6% – 4.0% investment level. IT spending alone hovers around 1.5%-1.9% of operating revenues. Adding in the industry’s investment in OT and in key technology aspects of smart grid projects, the relative investment in overall information technology in total climbs to a much more reasonable level. See Figure 2.


Figure 2.
Two key assumptions about this outlook:
1. COVID will be endemic, not pandemic, by 3Q 2022.
2. Infrastructure Investment and Jobs Act actually begins funding significant portions of the $72.3 Billion allocated for energy and electric power infrastructure renewal by mid-year 2022.

The impact of COVID on electric power industry investment during 2020 and 2021 and into 2022 has taken its toll. The question facing the industry and the nation is whether or not this estimated $16.5 Billion shortfall in grid modernization investment (as postponed or deferred from initial estimates) can be made up during the remaining years of this decade? My belief is that the investment gap will be narrowing over the next 36 months, as shown in Figure 3 below, and the pre- and post-pandemic trendlines will indeed converge in the latter years of the 2020’s. Closing the investment gap will especially be likely – and may occur earlier than anticipated with help from DOE funding. Much will depend on federal funds flows from the recently enacted Infrastructure Investment and Jobs Act – legislation that will enable additional billions of dollars to be provided for grid modernization programs and related energy projects. At least several billion dollars of the $72 billion or so earmarked for electric power modernization will be applied to IT, OT and “pure” smart grid projects, although the majority of the total budget is earmarked for transmission grid expansion, overall grid hardening and integration of renewable energy sources.

I believe that this forthcoming federal investment in the nation’s electric power grid – coupled with the investments of the nation’s utilities, must include funding for research and development of advanced technical solutions for ever higher levels of cybersecurity and grid resilience.

As of February 2022, the nation’s electric utilities are re-starting or initiating a number of grid modernization projects and programs, deferred in part over the past 24 months.  This activity will help boost IT, OT and smart grid device/equipment expenditures this year and into 2023. Figure 4 illustrates the near-term growth estimate we have made for the IT, OT and smart grid field components of capital investment as the effects of the COVID pandemic begin to wane in the first quarter of 2022.

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Sizing the Market for Electric Power Grid Modernization In an Era of Pandemic

According to the U.S. Department of Energy’s Energy Information Administration, annual spending on electricity distribution systems by major U.S. utilities continued to increase year-over-year through 2019, with major utilities spending some $57.4 billion on electric distribution in that last pre-pandemic year. More than half of utility distribution spending in 2019 went toward capital investment ($31.4 billion) as utilities worked to replace, upgrade, and extend existing infrastructure. Another $14.6 billion was invested in operations and maintenance (O&M), and $11.5 billion was appropriated for customer expenses, which included advertising, billing, and customer service.

In 2019, much of the $31.4 billion distribution system capital investment (40%) was spent on power lines, both underground (23% of investment) and overhead (17% of investment). Distribution lines are added or expanded to accommodate new neighborhood development or higher electricity flows as sales increase.1
Keep in mind that when spending by municipal electric utilities and electric cooperatives are added to the EIA totals, the amounts reported by EIA actually would increase by about 25-30%, at least in our estimation.  The bulk of this additional non-IOU spending was for distribution expenditures.

We have increased these amounts for 2020 and 2021, if only to account for inflationary pressures on prices of electrical equipment and systems. Thus, our view is that, in 2021, about $60 Billion was spent in total, on electric power distribution activities in the United States. Of this amount, $33 Billion was estimated for capital investment, and about $20 Billion of the total went for distribution equipment and systems.


Fig. 1

Newton-Evans’ recent year studies of U.S. combined utility and industrial/commercial spending for dozens of specific T&D products, equipment types and systems suggest about $22 Billion was invested in about 70 specific T&D equipment types in 2021.2 Note that this estimate includes spending for both transmission and distribution. In fact, the total expenditures for T&D procurements likely exceeded 100 billion dollars. See Figure 2.


Fig. 2

This $22 Billion shown in the above chart excludes additional billions of dollars invested in power lines, underground cables, electric power poles, meters and ancillary equipment as well as customer-related spending, certain substation construction and O&M services.

One recent Newton-Evans’ study of capital investment changes brought on by the COVID pandemic, resulted in an expected drop in CAPEX from 2019 to 2020, followed by stabilization and a moderate increase in spending for some areas in 2021. Some respondents cited this as a “deferral” of investments rather than a cancellation of investments at the time of the study.3 Nonetheless, total capital investment by U.S. electric utilities during the 2020 and 2021 years likely centered around the $130 Billion mark.4

If the nation (and the entire world) can move on from the ongoing pandemic era, to an endemic period, grid modernization investment may recover some of the momentum lost or deferred from the past 24 months. As well, the significance of the passage of the Infrastructure Investment and Jobs Act in November, 2021, cannot be overstated. More than $60 Billion dollars of funding under this new act has been allocated to the energy sector, most of that amount earmarked for modernization of the electric grid.

Sources:
1. U.S. Department of Energy, Energy Information Administration
2. Newton-Evans’ Market Overview Series on various T&D Topics
3. Newton-Evans Research Study of Capital Investment among U.S. Utilities in Midst of Pandemic Conditions (1-2 Quarters, 2020)
4. Newton-Evans Calculations of 1.28 x EEI/EIA estimate of $107 B. Newton-Evans’ estimate very similar to estimate prepared by Statista, which itself was sourced in part from S&P Global Market data.

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SCADA Systems for the Renewables Energy Industry and ADMS For Utilities

Introduction:

Newton-Evans believes that there is significant opportunity for providers of SCADA-related systems and application software to help manage the operations of commercial and utility-scale wind and solar power resources.

The U.S. Department of the Interior’s USGS agency reports that there are about 67,000 large (utility-scale) wind turbines in operation in the United States.  These thousands of wind turbines are installed at about 1,500 sites or farms.  The country is adding about 3,000 utility-scale wind turbines each year. (!)

According to the U.S. Department of Energy’s EIA (Energy Information Administration), there are more than 2,500 utility scale solar plants/farms now operating in the United States.  Most of these facilities represent from 1 to 5 megawatts of generation capacity. (2)  There have been a number of larger solar plants coming onstream in the last five years.

Each of these 4,000-plus utility-scale renewables sites now operational in the U.S. requires a SCADA-like system to acquire operating information and to coordinate grid planning activities.  For enterprises operating multiple facilities, capabilities exist to coordinate multiple SCADA installations (or site automation/control systems) under the control of a larger company-wide or utility-wide SCADA system.

Wind Power SCADA

There are four types of SCADA providers serving the wind power industry as shown here:

 

 

 

The first group of wind SCADA offerings is comprised of the leading wind turbine manufacturers for the U.S market, including GE, Siemens and Vestas, (collectively representing about three-quarters of US wind turbine sales) and supplemented with some Chinese manufacturer installations and supporting control systems software from either Goldwind or Envision, both of which have a U.S. presence and have current installations around the country.

The SCADA applications developed by each turbine manufacturer center around wind turbine controls, but the offerings also extend to include a bevy of related monitoring and control applications for commercial wind farms.  The SCADA offerings from these firms appear to be designed with current generation software platforms and incorporate some useful apps development tools – an optimal solution for those sites that make use of wind turbines from a single manufacturer.

The second group of wind SCADA offerings is provided by a number of wind technology specialist firms, including DEIF, Grantek, Halus and SCADASolutions.  Offerings from these firms enable wind farm operators having wind turbines acquired from multiple suppliers to work in an integrated manner, analogous to a substation automation system that has to coordinate among multiple protective relay suppliers.  Status reporting, turbine condition assessment, activity controls can be accomplished by the SCADA offerings from these suppliers, regardless of the turbine type, size or manufacturer.

The third group of wind SCADA offerings comes from “generalist” SCADA suppliers, those companies that provide packages or configurable SCADA to multiple industries, from energy utilities to process industries, to discrete product manufacturers and commercial building control systems.  Products from leading suppliers including PcVue, Iconics, Wonderware (Aveva) and others have all been successfully applied to numerous wind farms in the U.S. and elsewhere.

The fourth group of offerings that have made some inroads with utility-operated wind farms is provided by the “traditional” suppliers of electric utility SCADA, DMS and energy management systems.  Most of these firms have now developed requisite software or have partnered for development of wind energy applications, and have likely implemented wind applications for one or more utility customers at this point in time.  Included here are large companies such as ABB and Schneider, as well as key suppliers to the mid-size utility market and include firms as ACS-Indra, OSI, QEI, Survalent and others.

Solar Energy SCADA

The more than 2,500 utility-scale solar farms operating in the U.S. also have a requirement for SCADA systems.  Similar to the groupings of SCADA providers in the wind sector, there are four major types of solar SCADA offerings for the U.S. market.

There are at least five solar SCADA specialist firms operating in the U.S. market in 2021 having currently installed solar SCADA systems, and there are likely additional firms operating on a regional basis around the country.  These firms primarily serve commercial solar energy facility operators.

Distribution utility SCADA providers have also developed several solar and DERMS applications of interest to their utility customers operating solar facilities.  If not solar applications specialists themselves, the utility SCADA/DMS systems can partner with or link with offerings from solar IT/OT specialists

The third group of solar SCADA providers is comprised of: a) large firms that have traditionally provided distributed control systems for electricity generation plants; and b) the multinational firm providing large-scale EMS/SCADA/ADMS systems.

Generalist SCADA suppliers that were listed earlier for the wind farm sector of renewables are also actively participating in the solar market as well.

The Utility Role in Aggregating Non-Utility Renewables (Utility-Scale Distributed Energy Resources)

Recently, the NREL reported that “Although 23 utility-led efforts exploring DER aggregation were launched in the United States by late 2018, DERMS remains in the nascent stages of implementation, with many utilities still in the process of exploring or piloting the range of available commercial solutions.” .(3)

Newton-Evans Research had earlier estimated that the U.S. utility DERMS market in 2020 had reached about $75 million and is likely to double to $150 million by 2024. (4)

Control is the Key

Importantly, the less control over renewable energy resources that the utility industry has (at both the transmission and distribution levels) the more tightly coupled and securely linked must be the control systems with which the utility can best manage operations to ensure grid stability.  This is why there is a separation between SCADA at the distributed energy resource site level which must be in place for operational data acquisition and is the rationale for the utility to have an up-to-date GIS providing DER locational data, supplemented by weather information as part of (or available to) it own DERMS and/or available to (or co-resident with) the DER site(s).

The prosumer-aggregator category of DER supplier adds yet another dimension lending additional urgency to the need for a comprehensive and scalable DERMS designed specifically for utility use.  While the author has read about the need for DERMS at the renewable facility level, the real need at these thousands of sites is for a SCADA-type system that can summarize information for the asset owner/operator and transmit requisite information securely to the utility entity (transmission or distribution-level) to enable the utility to optimize grid operations.  Multi-site renewables facilities will need their own large system to manage all assets regardless of location.  A fine example of a multi-site (on a nationwide scale) renewables SCADA system and national control center) is that of Iberdrola. (5)

What seems clear at this time is that the inclusion of renewables owned by aggregators (commercial and community levels) as electric power generation resources adds significant complexity to the already sophisticated nature of utility-operated transmission and distribution grids.  A quarter century ago, most power generation assets were under the direct control of utilities.  That is no longer the situation with an ever-increasing portion of power generation coming from renewables, and with a high percentage of renewables sites not owned or operated directly by regulated utilities.

In turn, a smooth-running grid will require ever-closer systems and telecommunications collaboration among T&D utilities, ISOs/RTOs, aggregators and regulators.  Disparate systems will have to be linked to some degree, with secure and reliable communications becoming absolutely vital to the safe, secure and reliable operation of the country’s power grids.  It will be incumbent on utilities to manage these complex relationships with all the technical resources available, because after all is said and done, it is the nation’s electric utilities that are charged with the operation of the grid on local and regional levels.

The increasing complexity of today’s grid architecture and the challenges posed to IT/OT staffs to develop comprehensive systems that can meet current and likely regulatory requirements to safely and securely accommodate commercially-owned power generation assets is among the greatest challenges found in any sector of the nation’s industrial, commercial, government sectors.  The need is paramount for a new generation of ADMS, AEMS, DERMS, SCADA/DCS. GIS and DRMS that are each based on open standards, configurable, scalable and capable of providing two-way telecommunications pathing.

Here is one view of how renewables SCADA systems are playing and will continue to play an important role in enabling utility-level coordination among aggregators at the commercial and community levels, and aligned with regional requirements of ISO/RTO organizations.

 

 

  1. Source: https://www.usgs.gov/faqs/how-often-us-wind-turbine-database-updated?qt-news_science_products=0#qt-news_science_products
  2. Source : https://www.eia.gov/todayinenergy/detail.php?id=38272
  3. National Renewable Energy Laboratory (Washington, D.C.)  Expanding PV Value: Lessons learned from Utility-led Distributed Energy Resource Aggregation in the United States, https://www.nrel.gov/docs/fy19osti/71984.pdf.
  4. Note that the Newton-Evans’ growth estimate, though moderately strong, is in fact lower than that of other energy research and consulting firms having a focus on DERs and DERMS.
  5. Iberdrola.  National Control Center: the most advanced renewable energy control center in the United States. https://www.iberdrola.com/innovation/core-renewable-energy-operation-center-usa

 

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Estimated U.S. Sales of Power and Distribution Transformers more than $4.1 Billion in 2017; $4.4 billion by 2020

The Newton-Evans Research Company has announced the publication of a new set of 13 U.S. transformer market segment summaries. The new series of market overview reports (executive market summaries) includes definitions, representative products, estimated market size for each transformer market segment, vendor market share estimates and market outlook through 2020. Electric utilities accounted for about 87% of purchases of small, medium and large power transformers and a variety of distribution transformers.
Continue reading Estimated U.S. Sales of Power and Distribution Transformers more than $4.1 Billion in 2017; $4.4 billion by 2020

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Proposed Import Tariffs: A BAD IDEA for the U.S. Electric Power Industry

by Chuck Newton

We all know that the current administration wants to “make America great again,” but using tariffs to prop up our homeland infrastructure is not the right approach to take at this time.

The U.S. electric power industry can ill afford the extra costs that would be incurred with the placement of 10-25% tariffs on iron, steel, and aluminum, which are core building blocks of our nation’s electrical infrastructure with a good percentage of finished electrical apparatus, equipment and ancillary products manufactured with imported steel and aluminum. Continue reading Proposed Import Tariffs: A BAD IDEA for the U.S. Electric Power Industry

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Hubbell, Inc. Becoming a Stronger Participant in the Market for Grid Modernization with RFL and Aclara Acquisitions

Here are the reasons for our viewpoint that Hubbell’s Power segment (known as HPS) will lead the company’s growth over the coming years.
Continue reading Hubbell, Inc. Becoming a Stronger Participant in the Market for Grid Modernization with RFL and Aclara Acquisitions

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A Closer Look at the Changing Russian Electric Power Industry

Russia is the world’s third largest consumer of energy, and as such the country has announced plans and programs to modernize its energy infrastructure, especially for the nation’s power sector. Currently, the Russian national power grid includes more than 230 GW of production capacity. The country’s utilities are known as energos. These energos operate more than 31,000 T&D substations located throughout multiple regions and time zones. There are almost 800 large scale power plants in the country, including 15 nuclear sites operating some 35 reactors. Seven new nuclear units are now under construction as of mid-2017.
Continue reading A Closer Look at the Changing Russian Electric Power Industry

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Progress Report on the 2016-2018 Study of Protective Relays

This week the staff at Newton-Evans Research is in the midst of conducting pre-testing of our 2016 survey design with our panel of leading utility contributors. After reviewing the results and feedback from our panel, we will finalize the North American version of the survey and begin requesting participation from utilities, ISO/RTO organizations, industrial firms and rail transport organizations. The pre-testing process will then be undertaken with our international utility panel.

This periodic study was last undertaken in 2012, with guidance provided in the four volume set of reports for the P&C community through 2014. The report series has been relied upon by relay manufacturers, substation automation developers and control systems integrators around the world for more than three decades. The reports are referenced by standards organizations and the operational consulting community looks to the series for guidance on protection and control status, learning where the “real world” of utilities is today and understanding the technical drivers and operational trends that will impact utility and supplier planning over the next few years.

We are hoping to receive participation from more than 100 key electric utilities in this year’s study. Typically we do obtain cooperation from 100 or more utilities. It is more difficult to obtain high levels of cooperation today, with concerns about security and competitive activities. We are trying not to be intrusive in our questioning, so would-be participants can safely and securely provide information without having to be concerned with cyber security policy issues.

The richly illustrated Executive Summary from this new study will be about 40 pages in length and will enable participants to “benchmark” the findings relative to their own P&C activities and plans and compare with other utilities within their size range and utility type.

For interested parties, keep in mind that the pre-publication price offer for the four volume set of report is $5,500.00 through May, 2016. Once the study is published, the report series price will be $5,950.00.

A brochure with order form for the 2016-2018 series is available here.

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The Year in Summary (2015)

2015 was another busy year for Newton-Evans Research. Some of the studies conducted this past year covered new research topics. While our work was focused on client-commissioned studies, we obtained many insights from operational and engineering perspectives that will assist our research programs in 2016 as we once again conduct our flagship multiclient studies of protection and control, substation modernization, and operational control systems with utilities around the world. For over 30 years Newton-Evans has observed and reported on the fundamental shifts in operational systems and electric power infrastructure technology developments and usage patterns. In 2016, there will be additional changes in usage patterns, plans and outlooks among operational end engineering officials to note, both in North America and internationally.

Continue reading The Year in Summary (2015)

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Bumps in the Road to Grid Modernization – Caution Ahead?

The T&D Industry and Grid Modernization Efforts in the second half of 2015 – A Middling Performance – So What Lies Ahead for 2016?

While a number of energy industry pundits suggest that the T&D markets for infrastructure equipment and control systems always go up, I will revert to what another Newton stated a few centuries ago in his Third Law of Motion (“What goes up must come down”).

An informal survey of marketing/product managers being undertaken concurrently with the development of this article strongly suggests that we are in a “down” or at best, a “flat” year for much of T&D infrastructure and for the systems that monitor and control distribution networks. There are some exceptions as noted below.

A more formal study of CAPEX and OPEX plans among the world’s utilities will follow in the fourth quarter. The findings from this scheduled study will enable suppliers of equipment, systems and services to plan more appropriately for the coming two years. This will be the sixth edition of the Newton-Evans CAPEX/OPEX report that began with the financial crisis of 2008 and continued through 2013. Now that low load growth and low capital investments have again hampered the bumpy road to grid modernization, the timing for this study will be helpful.

In preliminary discussions with U.S.-based manufacturers, integrators and industry observers, it is clear that we have entered into a period of further uncertainty and limited investment capabilities for utilities, with some major infrastructure and grid modernization projects being delayed or deferred for months or even years. The significant industrial consumers of electric infrastructure products and smart grid equipment and systems are, in some cases, in a more difficult position than are electric utilities. With falling commodity prices, and the widening spread of corporate bond costs versus Treasury bond costs, the ability of many companies and utilities to source capital for investment is not as “low-cost” as current interest rates would have it. Continue reading Bumps in the Road to Grid Modernization – Caution Ahead?

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First Quarter 2015 Projects Underway at Newton-Evans Research:

Study for CIGRE WG D2.38 – Operational Readiness for Cyber Threats. The Newton-Evans staff is conducting an international survey of electric utility IT and OT organizations to learn about the current status of preparations and readiness to minimize the impact of cyber threats. Utilities that participate with us in this “pro bono” study for CIGRE will be entitled to share in the findings and recommendations from the survey and from the guidance to be set forth in a 2016 CIGRE technical brochure.

2015-2017 Substation Automation U.S. Market Overview Series: Newton-Evans is in the process of releasing a new series of market synopses concerning 14 components of electric power substation modernization in the United States. Fourteen report summaries are available individually or as a complete series. Taken together the fourteen components reported in the series accounted for an estimated $1.7 Billion in 2014 shipments to U.S. utility and industrial customers. Growing at an average rate of about six percent, Newton-Evans expects 2017 shipment values to reach nearly $2 Billion.

Included in the series are these individual topics: SA01 – Remote Terminal Units; SA02 – Programmable Logic controllers; SA03 – Substation Automation Platforms; SA04 – Multifunction Meters and Recorders; SA05 – Inter-Utility Revenue Meters; SA06 – Digital Relays; SA07 – Digital Fault Recorders; SA08 – Sequence of Events Recorders; SA09 – Power Quality Recorders; SA10 – Substation Reclosers; SA11 – Substation Automation Integration Specialists; SA12 – Substation Communications; SA13 – Substation Voltage Regulators; SA14- Substation Precision Timing Clocks. The report summaries are available individually at $150 per report, or the group of 14 report summaries is available for only $975.00.

2015-2017 Protective Relay U.S. Market Overview Series: Newton-Evans is now underway with work to update the 2012 series on protection and control. A total of ten market summaries will become available on April 10. The P&C series will include the following topical summaries:
PR01 – Feeder Relays; PR02 – Transmission (Distance, Overcurrent, Line Differential) Relays; PR03 – Generator Relays’ PR04 – Bus and Busbar Relays; PR05 Transformer Protection Relays; PR06 – Motor Control Relays; PR07 – Electro-Mechanical Relays; PR08 – Drop-In Control Houses; PR09 – Synchrophasors (PDUs/PDCs); PR10 – Teleprotection. The report summaries will be available individually at $150 per report, or the group of 10 report summaries will be available for $875.00.

Worldwide Study of the Protective Relay Marketplace In Electric Utilities (2015-2017). Newton-Evans staff is preparing to undertake a major update to the four volume flagship study of protective relay use in utilities around the world. We need to hear back from interested parties as to whether this study should be scheduled for a spring kick-off or whether we should defer work on this massive study until autumn 2015. Early commitments will mean lower subscription prices and earlier reports availability. Please provide your thoughts and information requirements on the study’s timing and desired content to us.

Commissioned Studies:  Privately funded studies this first quarter include North American assessment of the recloser market; cyber security topics; ADMS market overview; software module pricing for AMI-OMS related systems; new compilation of North American EHV/HV and MV substations, transmission and distribution line mileage totals. (By state and by type and size of utility).

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2014 Autumn Electric Power Conference Season Well Underway

For the electric power industry, late summer through mid-autumn brings a number of conferences to the forefront each year or at least every two years.

This year is no exception. From the international CIGRE Conference held in Paris every two years, to the annual EMMOS conference and Southeast Distribution Apparatus Conference, there are lessons to be learned and topics of interest to those following industry trends. The CIGRE conference provides information on key electric power topics, while EMMOS focuses on large control systems used by utilities and independent systems operators (ISOs). The SDAC offers briefings and training on a variety of power distribution topics, ranging from meter management to control systems to cyber security.

CigreLogo
In late August I attended and participated in my 10th CIGRE conference. This year set a new record for attendance (more than 3,000 delegates and another 5,000 visitors) and the number of exhibitors and working group sessions also reached new heights. One of the more interesting observations for me has been to witness the growth in CIGRE participation by utilities and T&D equipment and systems companies from North America. Delegates are either actively volunteering on working groups or doing booth duty for an increasing presence of large-to-small North American companies whose equipment, systems and services are part of the exhibition.

Continue reading 2014 Autumn Electric Power Conference Season Well Underway

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What to Expect Next: Potential Synergies of the Alstom (Power and Grid) Acquisition by General Electric

As many long-term readers of Newton-Evans’ reports and articles knew from our assessment reported in 2009 there were back then three major contenders for the $7 billion Transmission and Distribution business units of the old Areva T&D Corporation. These were the American firm General Electric, the French corporate combination of Alstom and Schneider Electric, and the Japanese company, Toshiba. In the end the French government simply divided Areva T&D in half, and placed the “T” business into Alstom and the “D” business into Schneider Electric.

On June 21, 2014 GE was informed that Alstom’s board of directors decided to recommend GE’s offer to acquire the Power and Grid business of Alstom Corporation. These units are: Alstom Power (generation assets) and more importantly for this assessment, Alstom Grid, the HV and control systems components of the old Areva T&D business. The “D” business of Areva has now become a core business within the capable Schneider Electric camp of medium voltage equipment offerings.

Newton-Evans Research believes significant benefits to GE’s efforts targeting the global electric power industry will accrue if the company staffs truly work synergistically. Here are six key reasons for this view, in our opinion:

(1) IMPROVED WORLD MARKET ACCESS: GE will gain improved access to European electric power markets and other world regions with long-established relationships nurtured by Alstom and predecessors under the French management and government policies, which may continue under GE ownership, now that the French government is slated to become a significant shareholder investor in Alstom securities. Keep in mind that GE has more than a century of experience and accomplishments in France. I can recall visits to Belfort in eastern France and visiting both GE and Alstom (Areva) factory sites.

(2) ATTAINMENT OF ORGANIC GROWTH: GE Energy Management will again be able to lay claim to some real growth within 24 months of the close of this acquisition. Growth will come from both inorganic sources (via this acquisition – itself worth more than $4 Billion in current year sales of Alstom Grid products, systems and services) and organic growth (through increased interest in, and procurement of all combined GE-Alstom equipment, products and services). Each of the four component businesses of GE Energy Management including: Digital Energy, Industrial Solutions, Power Conversion and Energy Consulting will each benefit significantly if all goes as planned and envisioned in early July 2014. The big issue we see is whether Atlanta and Toronto will report in to Paris, or whether the reverse will be true.

(3) REDUCTION IN OFFERINGS “GAP”: GE will be able to fill several significant product/equipment gaps in its electric power transmission and distribution product line and related automation offerings. This will result in significant mid-term benefits to GE Digital Energy. However, a key issue for GE will be the “branding” of product offerings going forward from midyear 2015.

(4) MARKET-LEADING POSITION IN POWER GENERATION: Alstom’s power business includes assets for power generation such as turbines for coal, gas and nuclear power plants, wind farms while GE is a co-leader in both fossil, nuclear, hydro and renewables businesses.

(5) INCREASED SHARES OF OPERATIONAL CONTROL SYSTEMS: While GE’s EMS offerings have had somewhat limited success beyond North America, it’s DMS, OMS and GIS offerings are well-respected and are high quality offerings. Alstom Grid is a world leader in EMS, with a world-class group of systems for power transmission and distribution. The company’s “e-terra” line of systems is the leading market shareholder among critical T&D operational control systems used in the global electric power industry. The company also has developed a growing customer base among large utilities for advanced distribution network management with its IDMS offering. If the companies’ technical and product marketing teams work together as they have over time on various technical committees (IEEE, IEC, CIGRE et al) and provide smooth cross-systems integration capabilities, the company will be a force to be reckoned with in the world market for control systems. GE has a strong substation modernization/automation business focus across all components (systems, products, intelligent devices, communications equipment) that leads the North American market and is a growing force internationally.

GE Energy Management will likely become a major player in several growing portions of the transmission equipment business, establishing a stronger foothold in the North American and international transmission market segments described below. Together these segments are worth $32-40 billion on a worldwide basis. Newton-Evans’ estimates that Alstom Grid earned about $3.5 billion to $4.1 billion in HV equipment sales in 2013.

Here is our take on the gains to be realized for both electric power infrastructure and electric utility automation and services:

FACTS and Reactive Power Compensation:
ABB is probably the global leader in flexible AC transmission systems and the related reactive power compensation segment of high voltage equipment for transmission networks. Siemens Energy is a strong number two supplier with several others (notably Mitsubishi Electric Power Products, and American Superconductor) also active in North America, and around the world. Alstom Grid and GE are also participants that together could challenge the market leading positions of ABB and Siemens within three years of a merger of product lines.

HVDC Equipment:
Siemens is the market leader in HVDC, with ABB a reasonably close second place share holder and MEPPI the likely third most important player. However, an integrated Alstom Grid-General Electric product grouping would enable the company to attain up to a quarter of the available market shares.

Gas Insulated Substations/Switchgear:
The North American market for High Voltage GIS equipment is in excess of a quarter billion dollars. While Alstom Grid has only a small share (stronger in Canada than in the US), GE Energy could now present itself as a player in this growing market segment of high voltage switchgear. GE would also play a much more important role in international markets where – unlike in North America – GIS equipment is prevalent. Globally, GIS equipment is a 2-3 billion dollar annual market.

High Voltage Bushings:
This relatively small (about $125-150M in annual worldwide sales) market is led by Siemens and ABB. However, the combined Alstom Grid and GE offerings could make GE into a formidable player in this segment.

High Voltage Capacitors:
GE Energy is already the major participant in the North American market for HV capacitors, but globally, ABB is the leader. Alstom Grid, by virtue of its recent acquisition of the Finnish manufacturer, Nokian Capacitors, is also a very strong player in Northern Europe. Together, the product lines could pose a real threat to ABB dominance here (yet another billion dollar global product segment).

High Voltage Circuit Breakers:
Alstom Grid is already a major player globally, and with GE’s “sales boots on the ground” could significantly increase its share in North America and abroad. ABB and Siemens are both very strong manufacturers in this large annual global market of better than $2 billion.

Disconnect Switches:
High voltage disconnect switches are vital components of many transmission systems, and the global market runs to about $500 million annually. GE and Alstom Grid are among the six leading suppliers of disconnect switches in North America, but lag behind Hubbell, S&C and Southern States, some of which offer circuit switchers used for disconnect applications.

Large Power Transformers:
Alstom Grid is number three in the world in terms of large power transformer market share and assets, operating 13 plants with an annual production capacity of more than 130 MVA. GE Prolec is a major North American market force with about a 14% share of the U.S. market. Together, this alliance may become number three in the global market for LPTs behind ABB and Siemens). To do so, the GE-Alstom combine will have to fend off HICO, Hyundai, Toshiba and MEPPI as well as three up-and-coming Chinese manufacturers.

Instrument Transformers:
The market for high voltage instrument transformers had been dominated by specialist “independent” manufacturers until recently. A recent buying spree had Siemens acquiring Trench Electric, Alstom Grid acquiring Ritz and ABB acquiring Kuhlman. Currently, the market for HV IT equipment is shared primarily by these three firms, with GE very active in the MV segment. Together, the combined HV/MV instrument transformer offerings of an integrated GE-Alstom Grid would change the shape of this market, which in North America alone hovers around $100 million, and close to one-half billion dollars worldwide.

Air Core Reactors:
Another component of some transmission network architectures, Siemens-Trench and Alstom Grid-Ritz are key players, with GE also strong and MEPPI further behind, but with a growing share. A number of smaller participants account for a rather large share of this $400 million global business.

Surge Arresters:
Another sizable market in its own right (about $1 billion per year globally) high voltage surge arresters are manufactured by a number of US-based firms such as Hubbell, Thomas & Betts, and Cooper Power, each of which competes quite successfully against the likes of ABB, Siemens and GE.

Automation Systems:
GE’s older XA/21 EMS platform and Alstom Grid’s highly rated E-Terra offerings are both held in high regard around the world, although GE’s systems are mainly installed in the USA. By year-end 2015 and more likely into 2016, General Electric-Alstom Grid will see benefits from world-leading combined market shares in substation automation, protection and control and T&D control systems (energy management, DMS, OMS, GIS and SCADA). Earlier (1990’s era) acquisition efforts have been fraught with initial business unit integration problems (to wit- ABB with its acquisition of the older Ferranti EMS business (Spider v. Ranger offerings) and Siemens-Control Data (Sinault-Spectrum v. Empros).

Substation Modernization:
If protective relays are included in the mix of substation modernization, then the collaborative efforts of GE and Alstom will lead to a global co-leadership market position across the board. Alstom Grid enjoys a strong position with transmission class relays and related MiCOM systems and equipment, and has been fairly strong participant in the global market for substation automation. GE enjoys a strong position in protective relays in North America (number two supplier) and in some Western European and Asian markets, and does make the list of qualified suppliers elsewhere.

Protection and Control:
Internationally, Alstom Grid (with part of the Stafford, UK-based relay business) holds an estimated 16% share of the global protective relay market (outside of the U.S.), estimated by Newton-Evans to be about $2.4-$2.6 billion this year. GE Multilin, based in Toronto, is also a very strong market participant, especially in the Americas, and is the leader in industrial protection and control markets.

T&D Services:
GE is a major participant in T&D equipment repair and services, especially with its transformer repair business, and Alstom Grid outside of North America earns about $550 million per year with its array of high voltage equipment services and global agreements for automation systems maintenance and upgrades.
Let’s not count this as a “done deal” quite yet. I do believe it is now very likely to be seen through by all parties (GE, Alstom, French government, possibly various international courts). The important role of Alstom’s minority shareholders and their reaction to the GE acquisition is somewhat unclear as is the role the French government’s strong minority ownership position will play. GE has made significant concessions regarding job retention among the French workforce, and has promised to add another 1000 jobs in the country. This could have ripple effects on its global workforce, especially if workforce reductions take place.

The following chart (used with permission of General Electric) illustrates the current state of the acquisition and the alliance formation.

alliance1