T&D infrastructure annual investment to reach $198 billion by 2024
"The significant need for new power generation capacity makes the headlines on a daily basis. But what is seldom discussed is the equally important need for new T&D infrastructure, which needs an enormous $1.9 trillion in cumulative investment by 2024. This includes substations, power lines and associated equipment and new technology. T&D investment typically represents approximately 40 percent of total power infrastructure spending," said Ben Gardner, president of Northeast Group.
Investment in grid modernization--or Smart Grid--is accounting for a growing share of the overall market. In 2014, distribution automation investment is projected to account for 5.4 percent of total T&D spending. This will grow to nearly 14 percent by 2024, with a compound annual growth rate exceeding 13 percent. Cumulatively, the world will invest $230.2 billion in distribution automation between 2014 and 2024. This will include spending on substation automation fault detection, isolation and restoration FDIR volt/VAR optimization VVO and additional grid monitoring and control technologies in the distribution grid.
Geographic regions will vary significantly in their rates of investment. Emerging markets will represent the largest growth in T&D spending, with Africa and Southeast Asia the fastest growing regions as they build out new infrastructure to boost their electrification rates. However, North America and Europe will see lackluster growth in traditional T&D infrastructure spending of around one percent, but will account for the majority of Smart Grid spending.
The individual country with the largest amount of traditional T&D spending will be India, which will outpace China by 2024. Smart Grid annual spending on distribution automation will be concentrated in Europe $11.5 billion per year, followed by North America $7.5 billion and East Asia $6.1 billion, as these regions modernize their existing electric infrastructure.
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