Category: Substation Automation

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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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U.S. Substation Automation and Integration Market Expenditures Valued at $2.5 Billion in 2021

When the estimated sales of 14 product/service topics covered in the newly released 2022-2024 edition of U.S. Substation Automation Market Overview Series are totaled, the estimated value of these product/services purchased by American utilities and industrial substation sites reached $2.493 Billion in 2021. Equipment types reported in the series include RTUs, PLCs, protective relays, multifunction meters and recorders (digital fault recorders, sequence of events recorders, power quality recorders) reclosers, inter-utility revenue meters, automation platforms, time synchronization clocks, voltage regulators, communications equipment and integration services.

The total of spending on substation automation-related equipment and smart devices, along with substation integration services is on the rebound from COVID-era induced spending cutbacks. Newton-Evans Research expects investments in substation modernization to continue to grow over the next 24-36 months at a moderate rate of growth. As new substations come onto the grid to support renewable energy sites, these will be highly automated.

While automation budgets will remain a substantial portion of all substation-related budgets, additional investment is necessary to shore up grid resiliency and cyber and physical security defenses at the substation level and so these expenditures will share in the overall investment plans. The need for substation physical expansions and upratings will also continue to cause substations investments to rise.

Newton-Evans Research also finds that there are three distinct tiers of substation integration service providers. These include substation automation specialist firms, SCADA industry participants having substation devices and which also provide integration services and T&D engineering service firms having substation integration expertise.

Individual substation market overview reports are priced at $195.00 and the entire 14-report series is available for $1,150.00. Each market overview report includes a segment description, estimated market size, market shares for key participants and the U.S. market outlook through 2024.

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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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40% off “The World Market for Substation Automation and Integration Programs in Electric Utilities: 2017-2020.”

In 2017 Newton-Evans completed its eleventh worldwide study of the market for substation automation and integration systems in electric utilities. This 4-volume report series measures current market sizes for several sub-categories of equipment and services in North America and by World Regions. It also estimates and forecasts demand for substation automation equipment through year-end 2020, and profiles utility requirements as well as broader product and market requirements.
Continue reading 40% off “The World Market for Substation Automation and Integration Programs in Electric Utilities: 2017-2020.”

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Control Systems, Protective Relaying and Substation Automation Report Series Year-End Discount

Research findings from recently completed Newton-Evans studies see an upswing in cyber security investments worldwide, while substantial differences for communications protocols and methods are also evident. Order all 3 of Newton-Evans Research Company’s flagship studies on electric power control systems, substation automation and protective relays and save $9,800 off the initial retail price! Here is what is included:

Continue reading Control Systems, Protective Relaying and Substation Automation Report Series Year-End Discount

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U.S. Investor-Owned Electric Power Utility Automation Market Report

A recently published compilation of survey findings by Newton-Evans Research highlights electric power automation trends among investor-owned utilities (IOUs).

    • For control systems, IOUs tend to use more OMS analytics, are more likely to have an advanced DMS (or have plans for one), use synchrophasors for wide area monitoring, and want cybersecurity features designed as an integrated part of the control system rather than added on.

Continue reading U.S. Investor-Owned Electric Power Utility Automation Market Report

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Utility Plans Call for Continuation of Moderate-to-Substantial Investment in North American Distribution Grid Automation Projects

Findings Corroborate Earlier Newton-Evans Studies Regarding “Mixed” Placement of Controls of Field Devices

The Newton-Evans Research Company today released key findings from its newly published study of electric utility plans for distribution automation. Entitled “North American Distribution Automation Market Assessment and Outlook: 2018-2020” the 74-page report includes coverage of more than 30 DA-related issues.

Progress Being Made with Distribution Automation Programs
North American utilities are making progress, by and large, in developing and implementing new DA applications and installing telecommunications network upgrades to accommodate DA device transmissions. The overall DA market among North American utilities is approaching $1.5 billion and is expected to continue to grow in the near-term and mid-term.
Continue reading Utility Plans Call for Continuation of Moderate-to-Substantial Investment in North American Distribution Grid Automation Projects

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Growing Use of Specialized Consultants to Assist with Utility Cyber Security Activities Reported in Control Systems Study

Related Substation Automation Study Examines Use of Encryption for Data Transmission To/From Control Center Systems

The Newton-Evans Research Company has released additional cyber security-related findings from two major report series. The research shows that reliance on outside assistance for cyber expertise is gaining ground – especially among international utilities, while the use of encryption for operational data transmission is growing across the world.
Continue reading Growing Use of Specialized Consultants to Assist with Utility Cyber Security Activities Reported in Control Systems Study

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Control Systems, Protection & Control and Substation Automation Report Series from Newton-Evans Research Find Common Ground in Key Areas of Cyber Security and Communications

Research findings from recently completed Newton-Evans studies see an upswing in cyber security investments worldwide, while substantial differences for communications protocols and methods are also evident.

Control Systems Report Series
Similarities between North American and International Utilities:
1. Support activities managed by line-of-business by about one-half of all respondents
2. Fiber optic cable dominates linkages from control centers to key substations
3. Cloud computing interest remains relatively low
Continue reading Control Systems, Protection & Control and Substation Automation Report Series from Newton-Evans Research Find Common Ground in Key Areas of Cyber Security and Communications

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U.S. Electric Power T&D Market Overview Briefs Now Available

Newton-Evans is updating its series of “top line” market overview briefs called “Overview of the 2017-2020 U.S. Transmission and Distribution Equipment Market.” The reports included in this series are grouped into seven categories based on the types of T&D Equipment, systems or services covered: Control Systems, Substation Automation, Protective Relays, Transformers, Medium Voltage Equipment, High Voltage Equipment, and Distribution Automation. Reports in some of these product categories have been published this week and are now available for ordering on our reports page.
Continue reading U.S. Electric Power T&D Market Overview Briefs Now Available

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Four Major Types of Substation Integration Service Providers Account for More than $1 Billion in Annual Revenues

The Newton-Evans Research Company has released additional findings from its newly published four volume research series entitled: The World Market for Substation Automation and Integration Programs in Electric Utilities: 2017-2020.
Continue reading Four Major Types of Substation Integration Service Providers Account for More than $1 Billion in Annual Revenues

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Global Outlook for Substation Automation and Integration Continues to Show Impressive Growth

The Newton-Evans Research Company has released a new report on global substation automation markets based on the company’s 2016-2017 world market studies of substation automation and integration activities. The objective of this market outlook report by Newton-Evans Research Company, according to CEO Chuck Newton is “to provide world regional substation modernization market sizing, including country-specific activities for the largest countries in each region. As such, the outlook report complements the survey-based volumes covering North American and International substation automation markets, also completed in November.”
Continue reading Global Outlook for Substation Automation and Integration Continues to Show Impressive Growth

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International Utilities Planning to Expand Investments in Substation Modernization

The Newton-Evans Research Company has released findings from its International market study, the second of four reports collectively titled: “The World Market for Substation Automation and Integration Programs in Electric Utilities: 2017-2020.” The international study compares the current round of research findings with several earlier substation modernization tracking studies conducted by the firm. A total of 90 large and mid-size electric power utilities from 22 countries actively participated in the world market study.
Continue reading International Utilities Planning to Expand Investments in Substation Modernization

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Midpoint Of 2017 North American Study Finds Increase In Substation Construction And Retrofit Plans Over 2014 Findings

The Newton-Evans Research Company has reached the midpoint of its triennial tracking study of change and automation occurring in the world’s electric power substations.
Continue reading Midpoint Of 2017 North American Study Finds Increase In Substation Construction And Retrofit Plans Over 2014 Findings

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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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Substation Automation 2015-2017 Market Overview Series Now Available

Newton-Evans Research has just finished updating a series of U.S. market overview briefs on fourteen different substation automation market topics, including: Remote Terminal Units, Programmable Logic controllers, Substation Automation Platforms, Multifunction Meters and Recorders, Inter-Utility Revenue Meters, Digital Relays, Digital Fault Recorders, Sequence of Events Recorders, Power Quality Recorders, Substation Reclosers, Substation Automation Integration Specialists, Substation Communications, Substation Voltage Regulators, and Substation Precision Timing Clocks.

Each report provides a list of major market participants and their year-end 2014 revenues and market shares, as well as estimates of product pricing and a U.S. market forecast through 2017. See the sample brochure for more detail.

This series of reports is available for purchase on our reports page

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Ethernet in the Substation

Excerpts from this 2014 Newton-Evans study of the world market for substation automation show some interesting trends regarding the use of Ethernet networks in substations around North America. Some of these trends include:

  1. Electric utilities in North America are showing increased interest in IEEE 1613 as a requirement for Ethernet switches and routers
  2. Single network without failover is the most frequently used Ethernet LAN architecture, and one of the most planned for Ethernet LAN architectures in substations for year end 2016 (along with “Single network with multiple paths/failover” and “Independent primary devices/network and backup devices/network.”
  3. Roughly half of utilities surveyed do not have redundancy in substation Ethernet networks.

Although this year’s sample reported a much different (lower) average number of ports than had been reported in the 2011 sample, Newton-Evans believe that there will be additional Ethernet ports installed in many North American substations by 2016.

By year end 2013, the majority of North American utilities surveyed reported that their Ethernet ports are secured. This is about the same as what was reported in 2011.

By year-end 2013 the lack of redundancy in Ethernet networks had fallen from 55% to 49%, while 35% reported use of Ring approaches and 18% used STAR approaches to provide redundancy in their Ethernet networks as shown in this chart. There were some differences in Ethernet redundancy based on type and/or size groupings. For example, among public power utilities in the sample, 48% said they use Ring topology for redundancy and only 26% claimed they do not have redundancy in their substation Ethernet.

The new study found predominant use of Rapid Spanning Tree protocol (78%) to provide redundancy in Ethernet networks. This is a significant increase over the 57% of survey respondents reporting such use in the previous study. Use of Hot Standby Router protocol (IEC 62439) was reported by 14% of the subgroup, while 10% were using Parallel Redundancy (also IEC 62439) at year-end 2013.

For more information or to order a copy of “The Worldwide Market for Substation Automation and Integration programs in Electric Utilities: 2014-2016” visit our reports page.

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Encryption of Substation Communication Protocols On The Rise in North American Electric Utilities

The recent Newton-Evans survey of the Worldwide Market for Substation Automation and Integration programs in Electric Utilities: 2014-2016 reveals the increasing trend in North America of encrypting substation communication protocols. Here are a few facts about this topic:

1) Out of 59 North American electric utilities responding to the survey question, “What protocols do you use within the substation, between substations, and from the substation to the external host or network?” forty-five said they currently use DNP3 (serial) and 28 said they use DNP3 LAN (TCP or UDP) within the substation. For communication from substation to substation, 16 said they use SEL protocols and 21 said they use a version of DNP3. For communication from substations to the external host or network most respondents use a version of DNP3.

2) When asked the follow up question, “Are these protocols encrypted?” sixty-nine percent (41/59) said “No.” This seems like a lot, but the Newton-Evans survey has found that every few years more and more North American utilities are using encryption.

Are substation communication protocols encrypted?
SSA_enr_protocolsNA

3) Utilities were then asked, “If your protocols are encrypted, where do you employ encryption?” a) Inside the substation b) substation to substation c) substation to master (choose all that apply). Of the 15 North American utilities responding to this question, 14 indicated they encrypt protocols from substation to master, while only 3 use encryption within the substation and 2 from substation to substation.

Purchase the full report from our reports page for more detailed information on substation protocol use, encryption, and substation communications.

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Excerpts from Volume 2 of The World Market for Substation Automation and Integration Programs in Electric Utilities: 2014-2016

The Newton-Evans Research Company has released findings from the International volume (Volume 2) of its newly published four volume research series entitled: The World Market for Substation Automation and Integration Programs in Electric Utilities: 2014-2016. In addition to looking at plans for over 20 types of equipment commonly used in substation-wide automation and integration programs, this 200+page report includes a comprehensive look at the market trends for:

  • choice of communication protocols within and between substations, and from substation to control center
  • wireless devices inside the substation
  • number of Ethernet ports in a substation
  • number of simultaneous wireless connections allowed
  • protocol encryption and redundancy
  • communications architectures and links
  • Time Synchronization methods
  • protective relays
  • outsourcing of substation-related services

Key findings from 5 other recently Newton-Evans studies on substation-related topics accompanies the information gathered in late 2013 from thirty-two global electric power utilities that participated in the latest five-page survey.  A total of 96 unique utilities located in 57 countries around the world participated in one or more sections of the substation modernization study. On average, these international utility officials participated in two or three of the six topical surveys that form this report.

 

Some observations:
Potential obstacles to implementing substation automation and integration for both new and retrofit substations through year-end 2016
Similar to 2011, very few utilities ranked any of the listed “potential obstacles” as a 5. Of all the listed challenged, the two that least stand in the way are “Lack of appropriate communications technology inside the fence” and “Lack of appropriate communications technology substation to master.” Over 60% of respondents ranked these a 1 (“doesn’t stand in our way.”)

For new substations, “security concerns” was rated a 4 by 4 out of 31 respondents, as were “Not enough skilled internal staff” and “Substation equipment vendor community will not have required “open” products and equipment by year end 2016.”

Choice of protocol within the substation, between substations, and from the substation to the external host or network.
Within the substation, international utility respondents cited use of IEC 61850 as well as the variants for IEC 60870-5. Followed by Modbus (serial, LAN and Plus) versions. For the minority of utilities performing any peer-to-peer substations communications, IEC 60870-5 -101 and -104, led in mentions. These were closely followed by SEL mirrored bits, and by DNP 3, Growth in use of IEC 61850 for peer-to-peer communications is planned by this group. IEC 60870 variants were also the most widely used protocols for substation-to-control center communications internationally. Some DNP, common legacy protocols were also being used for substation-to-control center communications.

Additional information on the International substation market report, and the other three reports comprising the four volume study “Worldwide Market for Substation Automation and Integration Programs in Electric Utilities:2014-2016” is available from Newton-Evans Research Company, 10176 Baltimore National Pike, Suite 204, Ellicott City, Maryland 21042.
Phone 1-410-465-7316, write to info@newton-evans.com and see our reports page for more details.

An introductory price of only $1,495.00 for Volume Two is available to new subscribers until March 8, 2014.