Data Center Substation Industry Overview
The global data center substation market size was valued at USD 9.02 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 5.6% from 2021 to 2030.
The growing demand for interrupted and smooth transmission and distribution of electricity to power data center facilities is anticipated to drive the growth of the market over the forecast period. A substation is a structure in the power network where transmission routes and distribution feeders are connected via circuit breakers or switches by busbars. This allows controlling the power flow across the network and general switching procedures for maintenance purposes. These enclosed zones mainly step up or step down the voltage in transmission lines to a particular level suitable for the distribution system. The rapid growth in the volume of structured and unstructured data along with the increasing demand for cloud computing is expected to propel the market growth, subsequently driving the demand for efficient and reliable substations.
Gather more insights about the market drivers, restrains and growth of the Global Data Center Substation Market
Internet of Things (IoT), social media, and digitalization are driving the growth of the global data center industry. In recent years, the rising use of these applications and technologies has increased the need for larger and more sustainable data centers. Moreover, the growing use of social media and a surge in online video content streaming have resulted in increased data volumes that are handled by data centers, propelling organizations to invest in reliable and dedicated data centers to minimize the loss of information and ensure business continuity, energy transmission and distribution, and security. The subsequent expansion of data centers is leading to an unprecedented rise in the demand for electricity to power them. This, in turn, is expected to boost the demand for data center substations.
The outbreak of the COVID-19 pandemic and the subsequent supply chain disruptions and temporary suspension of manufacturing activities have taken a considerable toll on the data center substation market. Besides, the electricity demand dropped during the pandemic as business activities slowed down. With this decrease in power demand, there have been very few investments made in the substation industry in 2020. The pandemic also led to the slowdown of the construction ecosystem and data center construction projects were the first to bear the brunt. Several data center construction projects were put on hold or suspended temporarily to ensure worker safety and adherence to guidelines related to lockdown and social distancing. As a result of this closure, the market witnessed a slight decline.
The growing popularity of digital substations is expected to make the market lucrative over the coming years. Digital substations help to alleviate expenditure on maintenance, provide longer asset life, and reduce environmental footprint. These substations use fiber optic cables to connect to control panels, eliminating the need for copper control cables, in turn reducing installation costs as well as costs associated with decommissioning and recycling. The rising focus on the replacement of old electrical substation infrastructure with upgraded, high-quality, smart, and digital systems is expected to augment the growth of the market.
The market has also benefitted from the rising energy demand for the restoration and retrofitting of existing infrastructure as well as increasing spending on the expansion of long-route high voltage networks. However, data center substation construction projects face challenges such as high initial investment, difficulties in land acquisition, long project cycles, tedious maintenance and repair work, and complicated substation facilities that cannot be well integrated into the surrounding environment. Nevertheless, the long-term benefits associated with the lifecycle of a substation are expected to counterbalance cost-related challenges. As such, continued research and development efforts to manufacture innovative, energy-efficient, and digital or modular substations are expected to bode well for the market growth.
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Data Center Substation Market Segmentation
Grand View Research has segmented the global data center substation market based on component, voltage type, and region:
Data Center Substation Component Outlook (Revenue, USD Million, 2018 - 2030)
- Transformers
- Switchgears
- Relays
- Capacitors
- Busbars
- Surge Arrestors
Data Center Substation Voltage Type Outlook (Revenue, USD Million, 2018 - 2030)
- 33 kV - 110 kV
- 110 kV - 220 kV
- 220 kV - 500 kV
- Above 500 kV
Data Center Substation Region Outlook (Revenue, USD Million, 2018 - 2030)
- North America
- Europe
- Asia Pacific
- Latin America
- Middle East
- Africa
Market Share Insights
- June 2021: Eaton acquired a 50% stake in the busway business of Jiangsu YiNeng Electric, a manufacturer of busways in China. This acquisition is projected to help Eaton strengthen its position in the commercial and data center market while expanding the portfolio of its power distribution products in the Asia Pacific region.
- March 2020, ABB introduced a purpose-built substation to offer tailored solutions to the rapidly growing data center industry. The substation is designed to be safe and highly reliable while enabling efficient operation and maintenance during the entire lifecycle.
Key Companies profiled:
Some of the prominent players operating in the global data center substation market are:
- Eaton
- General Electric
- Hitachi ABB Powergrids Inc.
- NEI Electric Power Engineering, Inc.
- NR Electric Co., Ltd.
- SC Electric Company
- Tesco Automation Inc.
- Hyosung Heavy Industries
- Schneider Electric
- Siemens Energy
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