USD 9.5 billion
Report ID: SQSG45D2023 | Region: Global | Published Date: February, 2024 | Pages: 165 | Tables: 67 | Figures: 71
Global Data Center Substation Market size was valued at USD 9.5 billion in 2021 and is poised to grow from USD 10.09 billion in 2022 to USD 17.34 billion by 2030, growing at a CAGR of 6.2% in the forecast period (2023-2030).
Throughout the projection period, it is predicted that the market would expand due to the rising demand for uninterrupted and smooth electrical transmission and distribution to power data center facilities. In a power network, a substation is a building where circuit breakers or switches are used to connect distribution feeders and transmission channels. This makes it possible to regulate the network's power flow and perform standard switching operations for maintenance. The voltage in transmission lines is primarily increased or decreased in these confined zones to a specific level suited for the distribution system. The demand for efficient and dependable substations will be fueled by the rapid increase in the volume of organized and unstructured data as well as the rising demand for cloud computing. The international data center market is expanding as a result of the Internet of Things (IoT), social media, and digitization. The increasing use of these applications and technology in recent years has boosted the demand for larger, more environmentally friendly data centers. In addition, the increased use of social media and the rise in online video streaming has increased the amount of data that data centers handle, encouraging businesses to invest in dependable and dedicated data centers to prevent information loss and guarantee business continuity, energy transmission, and distribution, and security. The need for electricity to power them is rising at an unprecedented rate as a result of the construction of data centers. In turn, it is expected that this will increase demand for data center substations.
The COVID-19 pandemic outbreak, accompanying supply chain disruptions, and temporary stoppage of production operations have had a significant negative impact on the market for data center substations. In addition, as commercial activity slowed during the pandemic, the need for electricity decreased. There have been very few investments made in the substation industry in 2021 as a result of the decline in power consumption. The building environment was also slowed down by the epidemic, with data center construction projects taking the most hit. To make sure that lockdown and social distancing procedures were followed and to protect worker safety, several data center construction projects were temporarily placed on hold or halted. This shutdown caused a little drop in the market's activity.
In the upcoming years, the industry is expected to prosper thanks to the rising adoption of digital substations. Digital substations contribute to lower maintenance costs, longer asset life, and smaller environmental impact. These substations connect to control panels using fiber optic cables instead of copper ones, which eliminates the need for copper control cables and lowers the cost of installation as well as decommissioning and recycling expenses. The increased emphasis on replacing outdated electrical substation infrastructure with modernized, superior, intelligent, and digital systems is expected to accelerate market growth.
The market has also benefited from the increased spending on the extension of long-route high voltage networks as well as the rising energy demand for infrastructure renovation and modernization. However, some obstacles must be overcome for data center substation construction projects, including a high initial investment, challenges acquiring land, lengthy project cycles, tiresome maintenance and repair work, and complex substation facilities that cannot be successfully integrated into their surroundings. Nevertheless, it is expected that the costs-related difficulties will be outweighed by the long-term advantages connected with a substation's life cycle. As a result, the market expansion is expected to benefit from ongoing research and development efforts to produce novel, energy-efficient, digital or modular substations.
US Data Center Substation Market is poised to grow at a sustainable CAGR for the next forecast year.
Global Market Size
USD 9.5 billion
110 kV - 220 kV
110 kV - 220 kV
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Global Data Center Substation Market is segmented based on Component, Voltage Type, and Region. Based on Components the Data Center Substation Market is further sub-segmented into Transformers, Switchgears, Relays, Capacitors, Busbars, and Surge Arrestors. Based on Voltage Type the Data Center Substation Market is further sub-segmented into 33kV - 110kV, 110kV - 220kV, 220kV - 500kV, Above 500kV. Based on Region the Data Center Substation Market is further sub-segments into North America, Europe, Asia Pacific, Latin America, and MEA.
Data Center Substation Market Analysis by Component
In 2021, the switchgear segment held the largest market share with over 35.0%. One of the crucial parts of a substation is the switchgear, which is primarily used to withstand fluctuating operating voltage in highly unstable environmental conditions. It is expected that the segment growth will also be fueled by the construction of new industrial and commercial facilities, including data centers for secure and reliable operations. Air Insulated Switchgear (AIS) and Gas Insulated Switchgear are two more divisions of the switchgear segment (GIS). In 2021, the GIS sub-segment controlled a revenue share of more than 60%. GIS is more dependable, environmentally friendly, and adaptable than AIS. Additionally, compared to AIS, GIS requires less maintenance and installation time.
Over the forecast period, the CAGR for the transformer segment is expected to surpass 5%. Transformers aid in the efficient distribution of electrical power throughout the building housing the data center. They are crucial parts of the substation because they help transmit power between networks with the least amount of loss and without varying the frequency. Additionally, throughout the forecast period, growth in the transformers segment is expected to be fueled by the upgrade and renewal of existing substations.
Data Center Substation Market Analysis by Voltage Type
According to voltage type, the market share for products above 500 kV was over 35.0% in 2021. The market is expected to continue growing at a CAGR of 7.2% during the forecast period, maintaining its leadership. Increased demand for high voltage substations was a major factor in the market's expansion. High-voltage substations are made to handle the high power requirements of mission-critical buildings like data centers, providing server buildings with a dependable and high-quality power supply. In the upcoming years, high and medium-voltage substations are likely to experience significant growth. The increase in data center construction across developing economies is primarily responsible for the growth. To provide mission-critical facilities, like data centers, with the best possible power transmission and distribution, substations with voltage ratings of 220kV to 500kV and above are crucial. However, because of the COVID-19 pandemic, most data center projects came to a halt in 2021, which had a detrimental effect on the market's expansion. The market will begin to slowly recover in 2021, but it won't take long for it to return to its pre-pandemic growth rates.
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Due to the presence of significant players like Eaton and General Electric, North America became the market leader and had 38.0% of the worldwide market share in 2021. The US., which has shown consistent growth in data center construction activities, is mostly driving regional expansion. Additionally, North America is home to the largest cloud computing market, which presents a profitable opportunity for data centers. This opens up opportunities for energy distribution and transmission systems, like data center substations. The construction of additional data center facilities is the primary emphasis of North American data center colocation providers, which is also expected to drive the market's expansion.
With a CAGR of 7.6% during the expected period, Asia Pacific is expected to become the region with the quickest rate of growth for data center substations. The regional market is expanding as a result of the rising demand for cloud-based applications and data storage. In addition, the expansion of data center building in this region is due to the use of cloud-based services in industries including IT, education, and healthcare, as well as growing government backing. The wide availability of smartphones and the internet, as well as the rising desire for mobility, are all expected to raise the need for data center development in this region, which will consequently fuel the market's expansion.
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Data Center Substation Market Driver
Data Center Substation Market Restraint
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The existence of both large-scale and medium-scale data center substation players defines the market. It highlights the fierce competition among the major companies and advocates for ongoing innovation and development in data center substation designs. Market participants use a variety of inorganic techniques, such as joint ventures and mergers and acquisitions, to survive in a cutthroat market. To acquire a competitive edge in the market, businesses are also creating and presenting new items. For instance, Eaton purchased a 50% share in Jiangsu YiNeng Electric, a Chinese busway manufacturer, in June 2021. It is expected that this acquisition will aid Eaton in improving its market share in the commercial and data center sectors while broadening the range of its power distribution products in the Asia Pacific region. The following are a few of the leading companies involved in the global data center substation market:
Data Center Substation Market Top Player’s Company Profiles
Data Center Substation Market Recent Development
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According to the analysis, the switchgear segment dominated the global Data Center Substation Market in 2021 and is expected to maintain its dominance throughout the forecast period. In 2021, North America dominated the global Data Center Substation Market owing to the region's highly aware and economically stable population.
|Market size value in 2021
|USD 9.5 billion
|Market size value in 2030
|USD 17.34 billion
|Forecast Unit (Value)
|North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA)
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For the Global Data Center Substation Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Global Data Center Substation Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
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