Technavio analysts forecast a growth of close to 6% CAGR for the global automation solutions market in the power industry during the forecast period, according to their latest report.

The research study covers the present scenario and growth prospects of the global automation solutions market in the power industry for 2016-2020. To calculate the market size, the report considers revenue generated from sales and aftermarket services of automation solutions in the power industry.

The US is likely to shut down 41 coal-fired power plants in 2016, and is expected to build new clean power plants based on gas or solar-powered energy. In May 2016, India announced it would be shutting down coal-fired power plants with a total capacity of 37 gigawatts in a bid to protect the natural environment and reduce emissions.

According to a lead analyst, Bharath Kanniappan, at Technavio for research on automation, “The coal-fired plants may be replaced by natural-gas power plants equipped with critical safety units and innovative automation technologies. This represents significant greenfield opportunities for the global automation solutions market in the power industry.”

The three contributing factors that Technavio analysts highlight to the growth of the global automation solutions market in the power industry:

  • Rise in investments in smart power grids
  • Need for reducing T&D losses in power grid
  • Compliance with stringent government regulations

Rise in investments in smart power grids

Throughout the world smart grid are increasingly being deployed. Countries like India, the US, China, France, Spain, and Germany are implementing ambitious smart grid plans. Smart grids include grid applications such as SCADA solutions,smart energy meters information technology (IT), and other communication networks. These devices enable complete control and manage digital assets in the field.

In 2015, Iberdrola, the largest utility in Spain, claimed that it was able to cut down the outage time from 45 minutes during January-July 2014 to 38 minutes in the same period in 2015 following smart grid implementation. In Jamaica, the implementation of smart grids resulted in an average of 30% decrease in outages in 2015 compared with 2014. Florida Power & Light was able to avoid approximately 500,000 outages in 2014 due to smart grid systems and its power delivery diagnostic center. Thus, effective implementation of smart grids is required to counter the power crisis and increase grid reliability.

The top five list of countries with major investments in smart power grid by 2030:

  • China
  • India
  • Brazil
  • France

Need for reducing T&D losses in power grid

The total power generated by power plants does not reach the customers. This is because of flaws in long distance power transmission infrastructure. By the time the power reaches the end-user, approximately 10% of the power is lost due to technical and non-technical losses.

  • Technical loss: Attributed to leakages, open circuit losses, dielectric losses, joule losses in transmission lines, and overloading of distribution systems.
  • Non-technical/commercial loss: Involves theft, defective meters, and meter reading errors

Technavio expect a surge of the automation solutions market in the power industry in response to the need to reduce technical and non-technical losses incurred during power transmission and distribution (T&D).

Compliance with stringent government regulations

Power companies worldwide are looking at automation as an effective means to comply with stringent regulations in their geography and deal with the increased scrutiny of regulatory bodies. Regulatory authorities, especially in Europe and North America, have initiated strict regulations to reduce the carbon dioxide emissions from process industries such as power. “Power generation, especially by thermal power plants, results in the emission of harmful greenhouse gases, which harms the natural environment and increases the risk of serious health hazards,” adds Bharath.

To reduce the carbon dioxide emissions during plant operations, the power industry is striving to implement advanced technology processes and equipment and regulations such as the Kyoto Protocol have mandated the reduction of emissions worldwide. In response, the use of automation systems like SCADA has increased considerably in the power industry. These systems measure the emissions in plant operations accurately and help in real-time monitoring and controlling of power plants. There is a high likelihood that the power industries exhibit and increased preference for these systems during the forecast period.