US Electric Transmission and Distribution Equipment to Reach $24 Billion in 2013

US demand for electric transmission and distribution equipment is expected to increase 2.6 percent annually to $24 billion in 2013.  The need to upgrade and modernize the US electric grid -- supported by regulatory changes designed to support transmission and distribution system upgrades -- will be an important driver of demand.  In addition, growth in electric power generation by nonutility suppliers and in renewable energy generation such as wind will provide opportunities for switchgear and transformers to control these power flows, as well as meters to measure them.  An expected rebound in residential construction will also support increases.  However, the slowing growth in both electric utility and overall capital spending will prevent even faster advances.  These and other trends, including market share and product segmentation, are presented in Electric Transmission & Distribution Equipment, a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm.

By their very nature, the largest and most traditional markets for electric transmission and distribution equipment are the electric utility and industrial sectors.  In 2008, electric utilities accounted for 48 percent of total demand, with the industrial sector -- including nonutility generators -- accounting for an additional 33 percent.  Growth in these markets will be supported by increasing electricity generation by independent power producers and cogenerators.  In addition, rising electric utility capital spending will provide opportunities -- even though the increases in this spending will moderate from the double digit pace seen in the past decade.  The smaller government and institutional market will see the fastest increases through 2013, with gains supported by growth in transportation construction spending and government fixed investment. 

The fastest growth will be in power switching equipment and electric meters.  Demand for power switching equipment will be supported by the trend toward automated and remote controlled equipment and by the construction of large substations.  Electric meter demand will benefit from the growing market for “smart meters” which provide customers with pricing signals and thereby help limit electricity use.  These smart meters will form an important part of the developing “smart grid” and allow electricity providers to offer customers net metering capabilities or use automatic meter reading.  Power circuit breakers, molded case circuit breakers and specialty transformers will also see solid increases.

The Freedonia Group is a leading international business research company, founded in 1985, that publishes more than 100 industry research studies annually. This industry analysis provides an unbiased outlook and a reliable assessment of an industry and includes product segmentation and demand forecasts, industry trends, demand history, threats and opportunities, competitive strategies, market share determinations and company profiles.