Freedonia Group Reports on Grid Equipment

CLEVELAND, OH -- US demand for electric transmission and distribution equipment is expected to increase 2.6% annually to $24 billion in 2013. The need to upgrade and modernize the US electric grid—supported by regulatory changes designed to support transmission and distribution system upgrades—will be an important driver of demand. In addition, growth in electric power generation by nonutility suppliers and in renewable energy generation such as wind will provide opportunities for switchgear and transformers to control these power flows, as well as meters to measure them. An expected rebound in residential construction will also support increases. However, the slowing growth in both electric utility and overall capital spending will prevent even faster advances. These and other trends are presented in Electric Transmission &Distribution Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

By their very nature, the largest and most traditional markets for electric transmission and distribution equipment are the electric utility and industrial sectors. In 2008, electric utilities accounted for 48% of total demand, with the industrial sector—including nonutility generators—accounting for an additional 33%. Growth in these markets will be supported by increasing electricity generation by independent power producers and co-generators. In addition, rising electric utility capital spending will provide opportunities—even though the increases in this spending will moderate from the double digit pace seen in the past decade. The smaller government and institutional market will see the fastest increases through 2013, with gains supported by growth in transportation construction spending and government fixed investment.

The fastest growth will be in power switching equipment and electric meters. Demand for power switching equipment will be supported by the trend toward automated and remote controlled equipment and by the construction of large substations. Electric meter demand will benefit from the growing market for "smart meters" which provide customers with pricing signals and thereby help limit electricity use. These smart meters will form an important part of the developing "smart grid" and allow electricity providers to offer customers net metering capabilities or use automatic meter reading. Power circuit breakers, molded case circuit breakers and specialty transformers will also see solid increases.

(million dollars)
  % Annual Growth
Item 2003 2008 2013 2003-2008 2008-2013
Electric T&D Equipment Demand 14472 20750 23550 7.5 2.6
  Electric Utilities 6474 9900 10900 8.9 1.9
  Industrial & Nonutility Generators 4757 6870 8050 7.6 3.2
  Commercial 1396 1735 1945 4.4 2.3
  Residential 1235 1475 1730 3.6 3.2
Government/Institutional 610 770 925 4.8 3.7
© 2009 by The Freedonia Group, Inc.

Electric Transmission & Distribution Equipment (published 06/2009, 323 pages) is available for $4,600 from The Freedonia Group, Inc., 767 Beta Drive, Cleveland, OH44143-2326. For further details, please contact Corinne Gangloff by phone 440.684.9600, fax 440.646.0484, e-mail [email protected], or through the company's Web site.

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