The data center substation market is expected to grow from US$ 9,784.42 million in 2021 to US$ 13,947.91 million by 2028; it is estimated to register a CAGR of 5.2% from 2021 to 2028.
The substation connects the data center to its electric supply, usually a public utility system, although distributed power generation sources such as fuel cells or solar arrays are also considered. 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 subsequently drives the demand for efficient and reliable substations. 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. For instance, ABB introduced a purpose-built substation to offer tailored solutions to the rapidly growing data center industry. The rising focus on replacing old electrical substation infrastructure with upgraded, high-quality, modular, digital, and gas-insulated systems is also expected to augment the data center substation market growth.
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Data Center Substation Market: Strategic Insights
Market Size Value in US$ 9,784.42 million in 2021 Market Size Value by US$ 13,947.91 million by 2028 Growth rate CAGR of 5.2% from 2021 to 2028. Forecast Period 2021-2028 Base Year 2021
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Data Center Substation Market: Strategic Insights
| Market Size Value in | US$ 9,784.42 million in 2021 |
| Market Size Value by | US$ 13,947.91 million by 2028 |
| Growth rate | CAGR of 5.2% from 2021 to 2028. |
| Forecast Period | 2021-2028 |
| Base Year | 2021 |
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Impact of COVID-19 Pandemic on Data Center Substation Market
The COVID-19 pandemic has shaken several industries including manufacturing, retail, construction, and automotive. The tremendous growth in the spread of the novel coronavirus has urged governments worldwide to impose strict restrictions on vehicles and human’s movement. Due to travel bans, mass lockdowns, and business shutdowns, the pandemic has negatively affected economies and countless industries in various countries. The lockdown imposition has resulted in the lesser production of commodities, goods, and services.
In 2020, even though the COVID-19 pandemic caused a large-scale impact on economies across the globe, leading to many challenges, the data center substation market continued to expand. Amidst the pandemic, the exponential rise in data generation and consumption by individuals and organizations fuelled the demand for data storage, resulting in the rising number of reliable and efficient data centers. Globally, data centers evolve as computational hubs for several enterprises and end users with the increasing number of work-from-home jobs. As a result, the unprecedented rise in data generation and the need to improve the performance of data centers have boosted the demand for constructing new data centers and restoring the existing ones. Thus, an increase in the number of data center restoration and construction projects is likely to provide growth avenues for the data center substation market in the coming years. However, the market has seen a minor hit due to the disruptions in the supply chain and temporary suspension of manufacturing activities. Besides, the electricity demand dropped during the pandemic as business activities slowed down. Therefore, there have been very few investments made in the substation industry in 2020. However, the overall market witnesses a positive impact of the COVID-19 pandemic. In 2021, with the uplifting of lockdown and vaccination processes, the supply chain and manufacturing industries started to work fluently. Also, for continuous power supply demand in data centers, substations are required. Therefore, the global data center substation market would grow significantly during the forecast period.
Lucrative Regions for Data Center Substation Market
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Market Insight – Data Center Substation Market
Growing Number of Data Centers to Boost Demand for Data Center Substations
Data centers have increasingly become a crucial aspect of the modern economy, from the servers operating in SMEs to the organization data centers supporting large business corporations and the plantations running cloud computing services hosted by various technology giants such as Amazon, Facebook, and Google. In the wake of a globally snowballing digital economy and the data center industry, which is challenged continually with staying ahead of customers’ IT roadmaps, different end users have emerged to distinguish themselves with varying data center requirements. The need for data storage is also surging due to the increasing demand for big data analytics and cloud-based services, such as online content comprising movies, apps, videos, and social media. Therefore, the increasing number of data centers boosts the need for data center substations to get sufficient power supplies, which drives the growth of the data center substation market.
Component Segment Insights
Based on component, the data center substation market is categorized into transformers, switchgears, relays, and others. In terms of component, the switchgear segment led the data center substation market, with a share of 37.1% in 2020. Industries of all types are deploying data centers owing to the increasing need to support and optimize the high volume of data. Increasing cloud adoption and rapidly growing data are further endorsing the deployment of a data center.
Data Center Substation Market, by Component (% Share)
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The market players focus on new product innovations and developments by integrating advanced technologies and features to compete. In June 2021, Siemens Energy aims to strengthen the transmission network in Saudi Arabia's capital, Riyadh, bringing power to more than 30,000 homes in ROSHN's first residential community in Riyadh, which spans 20 million square meters.
The global data center substation market is segmented into component, voltage type, and geography. On the basis of component, the market is segmented into transformers, switchgears, relays, and others. On the basis of voltage type, the market is segmented into 33kV–110kV, 111kV–220kV, 221kV–500kV, and above 500kV. Further, on the basis of geography, the data center substation market is primarily segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South & Central America.
Data Center Substation Market – Company Profile
- EATON
- GENERAL ELECTRIC
- HITACHI ABB POWERGRIDS INC
- NEI ELECTRIC POWER ENGINEERING, INC
- NR ELECTRIC CO., LTD
- S&C ELECTRIC COMPANY
- TESCO AUTOMATION INC.
- HYOSUNG HEAVY INDUSTRIES
- SCHNEIDER ELECTRIC
- SIEMENS ENERGY
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Component and Voltage Type
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, United Arab Emirates, United Kingdom, United States
Frequently Asked Questions
• Growing Number of Data Centers across Globe
• Surging Volume of Structured and Unstructured Data
The number of internet users is increasing across the world due to the growing population. For instance, there are 4.66 million internet users globally (i.e. 59% of the global population), out of which 92.6% (4.32 million) users accessed the internet through mobile devices. Denmark, the UAE, and Sweden have the highest internet penetration rate across the world. Further, till 2020, APAC recorded the largest number of online users with over 2.5 million, whereas Europe was ranked second with approx. 728 million internet users. In 2020, China held the leading market share of internet users worldwide, followed by India and the US. China has more than 854 million internet users, whereas India has around 560 million online users. However, digitalization and internet penetration are in the initial phase across a few MEA countries, such as Oman, Qatar, and Kuwait. Industries are transforming their business to digital platform due to the continuous growth in internet users. These factors create the need for data centers due to the rising amount and variety of data on social media. Therefore, during the forecast period, the increasing number of data centers would create lucrative opportunities for the data center substation market to offer smooth transmission and distribution of continuous electric power supply.
Based on component, the data center substation market can be bifurcated into transformers, switchgears, relays, and others. The data center substation market is dominated by switchgear segment with a market share of 37.1% in 2020. It is expected to account for 36.0% of the total market in 2028 owing to the increasing need to support and optimize the high volume of data. Increasing cloud adoption and rapidly growing data are further endorsing the deployment of a data center.
With the digital transformation, the adoption of the cloud-based platform is rising due to the reduction in the deployment cost and the simplification of the deployment time. Further, the internet infrastructure is matured in developed countries and is flourishing in several developing countries across the world, which allows businesses in other countries access to the cloud-based platform. However, technological advancements are crucial to enhance the adoption of cloud-based platform trend by companies and customers. For instance, most of the financial institutions use financial analytics to ensure optimal performance, make crucial decisions, and gain insights. Financial analytics helps the banking sector enhance the customer experience and assists in risk management. For the analytics, the data is extracted from the data fabric solution. Most leading analytics technology companies develop a complete cloud-based suite to enhance their digital properties. Therefore, the increasing use of cloud-based platforms by most companies would propel the need for data centers, which is expected to drive the growth of the data center substation market in the coming years.
Key companies in the data center substation market include Eaton; General Electric, Hitachi ABB Powergrids Inc., NEI Electric Power Engineering, Inc., NR Electric Co., Ltd, S&C Electric Company, TESCO Automation Inc., HYOSUNG Heavy Industries, Schneider Electric, and Siemens Energy.
North America held the largest data center substation market share in year 2020 owing significant investments in constructing additional data center facilities from datacenter colocation providers in North America.
The List of companies - Data Center Substation Market
- EATON
- GENERAL ELECTRIC
- HITACHI ABB POWERGRIDS INC
- NEI ELECTRIC POWER ENGINEERING, INC
- NR ELECTRIC CO., LTD
- SANDC ELECTRIC COMPANY
- TESCO AUTOMATION INC.
- HYOSUNG HEAVY INDUSTRIES
- SCHNEIDER ELECTRIC
- SIEMENS ENERGY
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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