Utility CAPEX/OPEX Report Published with Results of First Quarter 2011 Newton-Evans Study of Electric Power T&D Investment
Ellicott City, Maryland – April 4, 2011. The Newton-Evans Research Company today announced the publication of its fourth study in the multi-year tracking research program looking into electric power utility CAPEX budgets related to smart grid investments and infrastructure spending plans.
Findings from the first quarter 2011 Newton-Evans global tracking study of electric power transmission and distribution investment remain positive, comparable with the three earlier tracking studies conducted in 2008, 2009 and 2010. Each of five smart grid component areas, plus transmission and distribution infrastructure development, has been reported by utilities located in 28 countries to more likely be either “increased” or “unchanged” rather than “decreased” from the 2010 study. The highest percentages of officials reporting increases were in the areas of substation automation and energy management systems. See Figure 1.
O&M budgets reflect a somewhat different story. Most categories of O&M spending were less likely to see an increase from the budgets of a year ago. Distribution infrastructure appears to be the key victim, with 17% of the respondents indicating a lower figure budgeted for 2011 O&M expense for distribution network operations and maintenance activities.
In summary, smart grid initiatives were cited as being more important factors stimulating increased CAPEX investments than was either regulatory mandates or stimulus funding. Government stimulus programs are now viewed as much less of a factor on CAPEX and O&M budget increases compared with what had been reported in the three earlier studies.
Likewise, decreases in CAPEX budgets were once again reported to be caused first and foremost by the economic outlook for 2011, a more important regional response factor to the study participants than regulatory mandates. See Figure 2.
Figure 1. Comparison of Planned 2011 CAPEX Investment for Smart Grid Programs.
| Smart Grid Component and Infrastructure Category | Increase Likely (2010 to 2011) | No Change (2010 to 2011) | Decrease likely (2010 to 2011) |
| EMS/SCADA | 50% | 45% | 5% |
| Substation Automation & Integration | 51% | 41% | 8% |
| Protection & Control Relays | 43% | 52% | 5% |
| Distribution Automation & Field IEDs | 45% | 51% | 4% |
| A M I | 48% | 45% | 7% |
| Transmission | 49% | 39% | 12% |
| Distribution | 43% | 43% | 15% |
Figure 2a. Rationale for Expected CAPEX Increases
| Reason for Increases | Yes 2011 | No 2011 | Yes 2012 | No 2012 |
| Regulatory Mandates | 44% | 56% | 43% | 57% |
| Smart Grid Initiatives | 57% | 43% | 58% | 42% |
| Government Stimulus | 22% | 78% | 19% | 81% |
Fig. 2b. Rationale for Expected CAPEX Decreases
| Reason for Decreases | Yes 2010 | No 2010 | Yes 2011 | No 2011 |
| Regulatory Change | 18% | 82% | Not Asked | Not Asked |
| Unfavorable Economic Outlook | 77% | 23% | 57% | 43% |
| Stimulus Funding Depleted | Not Asked | Not Asked | 27% | 73% |
The new 112-page 2011 edition includes information about relative market trends and market size estimates for major smart grid building blocks, including transmission and distribution network control systems, protection and control systems, substation automation and integration, distribution automation and advanced metering infrastructure as well as for transmission and distribution infrastructure.
Global CAPEX and O&M Expenditure Outlook for Electric Power T&D Investments: 2011-2012 Funding Outlook for Smart Grid Development is the fourth in the Newton-Evans’ Research Company’s smart grid investment tracking series.
Report subscriptions are priced at $495.00 and reports can be ordered online here or by calling (410-465-7316) or by email request to info@newton-evans.com .
summary reviews and highlights from completed studies
