The Global Data Center Substation Market size is expected to reach $12.8 billion by 2027, rising at a market growth of 5.5% CAGR during the forecast period.
The basis function of substation is to connect the data center to its different electric supply, however distributed power generating methods like fuel cells or solar arrays are also considered. In addition, a substation is a power network structure that connects transmission lines and distribution feeders with circuit breakers or switches and busbars. This enables the network's power flow to be controlled, as well as general switching procedures for maintenance. The voltage in transmission lines is mostly stepped up or down in these confined zones to a certain level suited for the distribution system.
One of the key trends of the overall Data Center Substation market is growing penetration of the Internet of Things (IoT), social media, and digitization. In addition, the growing utilization of these applications and technologies has necessitated the construction of larger and more sustainable data centers in recent years. Moreover, increased data volumes handled by data centers have resulted from the increased use of social media and a surge in online video content streaming, prompting organizations to invest in reliable and dedicated data centers to minimize data loss and ensure business continuity, energy transmission and distribution, and security. As a result of the expansion of data centers, the demand for electricity to power them has skyrocketed.
The demand for efficient and trustworthy substations is driven by the rapid development in the volume of structured and unstructured data, as well as the growing demand for cloud computing. In addition, the market is expected to increase due to the rising demand for uninterrupted and seamless transmission and distribution of electricity to power data center facilities. ABB, for example, designed a purpose-built substation to cater to the fast-expanding data center industry. The data center substation market is likely to benefit from the increased focus on replacing ageing electrical substation infrastructure with enhanced, high-quality, digital, modular, and gas-insulated systems.
Despite the fact that the COVID-19 pandemic had a large-scale impact on businesses around the world, posing numerous hurdles in 2020, the data center substation market continued to grow. The exponential surge in data generation and consumption by individuals and businesses during the pandemic fueled the demand for data storage, leading in an increase in the number of dependable and efficient data centers. With the advent of work-from-home jobs, data centers are becoming computational hubs for a variety of businesses and end users around the world. As a result of the unprecedented increase in data output and the need to improve data center performance, the demand for new data centers and the restoration of old ones has risen. As a result, in the next few years, a surge in the number of data center restoration and building projects is projected to generate growth opportunities for the data center substation market.
From the servers in SMEs to the organization data centers supporting large enterprise and the plantations running cloud computing services hosted by several top technology companies like Amazon, Facebook, and Google, data centers have become an increasingly important part of the modern economy. In addition, different end users have evolved to separate themselves with various data center requirements in the wake of a globally snowballing digital economy and the data center sector, which is always tasked with staying ahead of customers' IT roadmaps. The demand for data storage is also expanding as big data analytics and cloud-based services, like online content such as movies, apps, videos, and social media, become more popular.
Digital substations contribute to lower maintenance costs and a smaller environmental footprint while extending asset life. Fiber optic connections are used to connect these devices to control panels, removing the requirement for copper control lines. For example, Hitachi ABB Power Grids released its smart digital substation product in March 2021, which combines the latest innovations in digital substation technology with Hitachi's Lumada Asset Performance Management solution's prescriptive, predictive, and prognostic capabilities. In addition to increasing reliability, integrating new types of clean energy, and delivering energy services in better and safer ways, smart digital substations are essential for navigating the change to more distribute and less predictable renewable power sources.
In order to shift to an on-site power supply, data centers must overcome a number of challenges. The initial investment required for on-site energy is frequently the most significant obstacle for businesses. In the near term, moving power on site costs a lot of money and resources, which eventually discourage many businesses to embrace data center substation. In addition, fuel prices fluctuate year to year, making long-term planning difficult, thereby creating uncertainty among the company’s leadership about whether to adopt these systems or not. When constructing a data center, there are various variables to consider. Engineering, permits, and permissions are all taken into account, as are power systems, generators with enclosures, conduit and cabling for generators, data center lighting, lighting protection, HVAC, fire suppression, and other issues.
Based on Component, the market is segmented into Switchgears (Gas Insulated and Air Insulated), Transformers, Relays, Capacitors, Busbars, and Surge Arrestors. The Transformers segment held a significant revenue share of the Data Center Substation Market in 2020. This is because transformers aid in the distribution of electric power throughout the data center. In addition, they are critical substation components because they help with power transfer between networks with minimal loss and no frequency fluctuations. Furthermore, the transformers segment is predicted to rise due to the upgrading and renewal of current substations over the projection period.
Based on Voltage Type, the market is segmented into Above 500 kV, 220 kV - 500 kV, 110 kV - 220 kV, and 33 kV - 110 kV. In 2020, the Above 500 kV segment garnered the maximum revenue share of the Data Center Substation Market. This is because of a boom in demand for high-voltage substations. In addition, high-voltage substations are designed to meet the high-power demands of mission-critical facilities like data centers, ensuring a consistent and high-quality power supply to server buildings.
| Report Attribute | Details |
|---|---|
| Market size value in 2020 | USD 8.9 Billion |
| Market size forecast in 2027 | USD 12.8 Billion |
| Base Year | 2020 |
| Historical Period | 2017 to 2019 |
| Forecast Period | 2021 to 2027 |
| Revenue Growth Rate | CAGR of 5.5% from 2021 to 2027 |
| Number of Pages | 232 |
| Number of Tables | 384 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive Landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Component, Voltage Type, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. In 2020, the North America emerged as the dominating region in the overall Data Center Substation Market by collecting the highest revenue share. In addition, the regional market is anticipated to showcase a similar trend even during the forecasting period. The massive revenue of the regional market can be attributed to the presence of significant competitors like Eaton and General Electric. Moreover, the United States is primarily driving regional expansion, since the country has shown consistent rise in data center construction activities. Furthermore, North America has the largest cloud computing market, which presents a profitable prospect for data centers. As a result, new opportunities for energy transmission and distribution, such as data center substations, open up. North American datacenter colocation providers are focusing on making major investments in new data center facilities, which is projected to fuel market expansion in the region.
Free Valuable Insights: Global Data Center Substation Market size to reach USD 12.8 Billion by 2027
The major strategies followed by the market participants are Partnerships. Based on the Analysis presented in the Cardinal matrix; Siemens AG is the major forerunner in the Data Center Substation Market. Companies such as Schneider Electric SE, Hitachi, Ltd., Eaton Corporation PLC are some of the key innovators in the Market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include S&C Electric Company, NR Electric Co., Ltd., NEI Electric Power Engineering, Inc., Tesco Automation, Inc., General Electric (GE) Co., Schneider Electric SE, Siemens AG, Hitachi, Ltd., Eaton Corporation PLC, and Hyosung Heavy Industries Corporation.
By Component
By Voltage Type
By Geography
The data center substation market size is projected to reach USD 12.8 billion by 2027.
The growing popularity of Digital Substation are driving the market in coming years, however, need for high initial investment limited the growth of the market.
S&C Electric Company, NR Electric Co., Ltd., NEI Electric Power Engineering, Inc., Tesco Automation, Inc., General Electric (GE) Co., Schneider Electric SE, Siemens AG, Hitachi, Ltd., Eaton Corporation PLC, and Hyosung Heavy Industries Corporation.
The expected CAGR of the data center substation market is 5.5% from 2021 to 2027.
The Switchgears segment is leading the Global Data Center Substation Market by Component in 2020, thereby, achieving a market value of $4.5 billion by 2027.
The North America is the fastest growing region in the Global Data Center Substation Market by Region in 2020, and would continue to be a dominant market till 2027.
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