Trends in Electric Transmission and Distribution Industry

Electric Transmission and Distribution Industry trends show a 5.5 percent rise in the TD industry's demand and growth of two-way meters and residential markets.

FREMONT, CA: When independent power producers (IPP) or non-utility generators (NUG) connect to the electric grid, they will increase electricity generation and greater electrical output using renewable resources.

US demand to rise 5.5 percent annually: Research shows that demand for electric power transmission and distribution equipment will rise 5.5 percent annually through 2019 to USD 33.4 billion. Increased energy production by IPP and NUG and utilization of renewable resources will lead to higher product sales since these operations require proper equipment to provide electricity to the grid. Modernizing the electric grid and improving efficiency and reliability will also support market advances by incorporating smart technologies that offer different advantages over conventional equipment but also cost considerably more.

Two-way meters to be the fastest growing segment: A two-way communication meter, an advanced metering infrastructure, is projected to record the strongest demand gain of any electric power TD equipment product. Smart grid development and smart meter sales will benefit suppliers. As these meters can provide automated readings of electricity inflows and outflows necessary for participating in distributed generation and net metering programs, product demand will also increase. The expansion of the industrial and NUG markets will benefit manufacturers of power circuit breakers, metal-clad and metal-encased switchgear, molded case circuit breakers, and transformers.

Residential market to see most rapid growth: Electric utilities are a major market for TD equipment for electric power, which industrial companies have traditionally served. A 53 percent share of total demand was accounted for by electric utilities and 32 percent by the industrial sector, including NUG. These markets will grow as IPP and NUG generate more electricity, which will require heavy investments by these firms to protect sensitive industrial machinery and to connect new facilities to the grid, which will boost growth in these markets. A rise in electric utility spending will also open up opportunities, though the pace will slow from the previous decade's strong growth.

The much smaller residential electric power TD equipment market will see the fastest growth as housing construction recovers from 2009 lows and updated national electrical codes result in greater use of arc-fault circuit interrupters that are more advanced but more expensive. The commercial, government, and institutional markets will expand to grow below average, with the latter growing the slowest.