Category: Articles by Charles Newton

Posted on by

Review of Electric Power Industry Producer Price Trends and a NERC ES&D-derived Summary of Power Transmission Project Status

Growth in real market demand is significantly lower than total year-over year market value increases would suggest.  This is largely due to inflationary pressures, caused by rising prices for key commodities used in the production of electrical equipment.  Key among these components are copper, electrical steel and aluminum.  These commodities are under significant price pressures and production capacity limits, and are among the principal reasons for continually rising electrical equipment manufacturing costs.

Equipment prices (especially for power and distribution transformers, for switchgear and for capital HV transmission equipment) have doubled in the last five years, even as real demand has grown as well, but not as fast as inflationary pressures.  These same inflationary pressures affected the production costs and increased prices for MV equipment as well as for HV equipment.

What seems to be different in today’s market composition versus that of a decade ago is that a higher percentage of electrical infrastructure equipment is now being purchased by end-user industrials and commercial enterprises than had earlier been the situation.  Chief among these buyers are data center developers and large renewables project owners as well as the reshoring of American manufacturing plants.  Also, the re-invigoration of the nation’s electric power grid is well underway, in an attempt to make electricity supply more secure, sustainable, more reliable, as well as becoming more resilient to the effects of climate change and climate challenges.

Much of the increase in demand for capital electrical equipment is coming from three sectors of large energy users.

  • First is the continuing growth of renewables, despite the mistaken erosion of interest and significant cutbacks of research funding on the part of the current administration and its Department of Energy. 
  • Secondly is the huge increase in the number and size of data centers supporting AI developments.
  • Thirdly is the reshoring of manufacturing industries, with numerous large industrial campus developments underway at this time.
    • Each of these are responsible for placing capital electrical equipment orders earlier than required, sometimes 2-5 years in advance of the projected need for the equipment to be installed and operating at a plant site.
    • Each of these factors impact and disrupt the historical cyclical equipment procurement activities of electric utilities of all types and sizes.

The electric power segment of the overall energy industry is indeed continuing to proceed with its transition from a fossil-fuel based power generation basis to a more sustainable and greener approach to providing reliable and resilient electric energy.

By staying the course toward reliability and resilience, electric power utilities will necessarily form alliances with non-utility providers of electric power.  Concurrently, I believe we will see some new large campus-like industrial sites developed that will be self-powered, using resources ranging from gas turbines, to small modular nuclear reactors to on-site utility-scale renewable solar farms and wind parks.  A newer and sustainable form of autoproduction and co-generation is being developed by and for use among manufacturers, data centers and utility-scale renewables sites.

When we evaluate current year costs for key components of electrical equipment, we must look into the cost changes that have occurred over the past 24 months.  The following table was developed at Newton-Evans using commercial market information sources.  Note that the cost/unit of GOES steel had actually fallen from its high-water mark incurred in 2024 until this January, resulting in a five percent drop in price/unit over this time interval However, note the rather steep cost increases for units of copper (+31%) and aluminum (26%), whether measured in units of pounds, kilograms or metric tons (MTs).

One of the principal resources I have used and relied on over the years has been the economic information produced by the Federal Reserve Bank of St. Louis.  The information on producer prices is published for dozens of commodities, and for many of these, the data is updated on a monthly basis.  This vast array of economic research is known as FRED – for federal reserve economic data.  Now in its 35th year, FRED is a major reliable source of business-related economic information vital to industry and commerce in the USA and internationally.

We are looking at FRED data in this article to help understand the huge increases in producer prices (manufacturing-related costs) that have affected the electrical equipment manufacturing industry.  In this first chart, one can view the rather steep rise in producer prices that have occurred over 20 years.  Note the sharp increases in the producer price curve beginning in the COVID era.

The second chart shows the steep rise in transformer producer prices that have been incurred over the past five years, nearly doubling on this index rising from 200 to more than 360 on the scale.  Note that while it took 20 years for costs to double (from 100 in the base year of 2000) to a level of about 200 in 2020, it will likely take fewer than six years for transformer production costs to again double.

The final chart shows more of the same type of producer price rises, but includes power transmission equipment and turbines in this array.

Earlier this month (January 2026) The North American Electric Reliability Corporation (NERC) published its annual landmark study of transmission projects from across the United States.  More than 1000 projects were documented and described in its annual report can view the status of U.S. transmission projects as of year-end 2025 reader.

There were about 62 project cancellations or delays due to a variety of reasons including economic considerations, load growth issues permitting issues and a few other considerations.  The following chart illustrates the rationale provided for transmission project cancellations or significant delays.

The number of project cancellations and delays that occurred in 2025 was significantly lower (at 62 total) than the 142 such instances reported in the 2024 ES&D study.  Our next topic will focus on the recent developments in the large power transformer segment of the industry.

Posted on by

Newton-Evans Research Company Introduces Comprehensive and Cost-Effective Market Overview Package for the Electric Power Industry

The Newton-Evans Research Company is pleased to announce a new, cost-efficient purchasing option for its extensive series of electric power T&D (Transmission and Distribution) equipment, systems, and services market overviews.
Now Available: All 86 Report Summaries for $7,500
This special package includes every summary from our seven major report groupings, as well as an exclusive June 2025 Market Update. The update will analyze the impact of newly imposed or revised U.S. tariffs on T&D equipment and includes an updated spending outlook through 2027.

What’s Included:
Each market overview provides:
• A technical description of the specific product, system, or service
• A list of key market participants
• Market size and share estimates
• A market outlook through 2026
• Sample pricing data (for most topics)
Report Categories (2024–2026 Updates):

Our 86 individual topic reports span seven major categories:

  1. High Voltage Equipment
  2. Medium Voltage Equipment
  3. Power and Distribution Transformers
  4. Control Systems
  5. Distribution Automation
  6. Substation Automation
  7. Protection & Control
    Each category includes between 8 and 18 individual research topics.
    For category details and topic descriptions, please visit our Reports page: www.newton-evans.com/our-reports
    This is the only series of its kind—a vital resource for professionals who need to know the key players, current trends, and future projections in the electric power sector.

Posted on by

USAID and Its Historic Role in Providing Electric Power Infrastructure In Developing Nations Around the World

Some readers may be unaware that the Agency for International Development (USAID) has planned, developed, managed and executed successful electric power infrastructure development projects in dozens of developing nations over its multi-decade history. USAID had been the world’s premier international development agency, until its near-closure early this year. USAID has been one of three principal approaches to the country’s being held in high regard among other nations, along with Voice of America and the Peace Corps. Begun under President John Kennedy, the Agency for International Development was an outreach that expanded upon Kennedy’s famous statement “Ask not what your country can do for you, but what you can do for your country.” Kennedy’s outlook further expanded to a world view in the context of “…what can America provide to benefit the world.” The nation was energetic and young people stepped up to respond and to propel the country forward on a number of fronts.

The first contact with USAID in my experience was in Vietnam some 58 years ago. I was a young U.S. army specialist/sergeant deployed in villages around and downriver from Saigon. On multiple occasions I would come across USAID truck convoys delivering foodstuffs (including rice, of all things, a somewhat unbelievable commodity to those of us who could see Vietnamese rice paddies just about everywhere in that region of the country) in large sacks that read “From the American People.” A nice sentiment that meant a lot to the nearly three million servicemen and women who served in that conflict and could find something positive in their collective experience via US AID and its courageous efforts to feed many thousands of South Vietnamese citizens.

The U.S. Agency for International Development (USAID) has remained as the principal U.S. agency to extend assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms. In addition to the provision of foodstuffs and life-saving vaccinations against diseases to millions of people, electrification projects rank among USAID’s many successful undertakings.

USAID supports electrification projects globally, focusing on expanding access to reliable and affordable electricity, particularly in off-grid areas, and promoting sustainable energy solutions, including mini-grids and solar systems.

USAID’s key focus has included these five areas:
Expanding Access to Electricity: USAID aimed to increase access to electricity, especially in underserved areas, by supporting on- and off-grid solutions.

Strengthening Energy Sector Institutions: USAID worked to strengthen the capacity of energy sector institutions to manage and deliver electricity services effectively.

Promoting Private Sector Investment: USAID encouraged private sector involvement in the energy sector to foster sustainable and scalable solutions.

Developing Sustainable Off-Grid Models: USAID supported the development of viable and sustainable off-grid electrification models, including mini-grids and solar systems.

Supporting Clean Energy Technologies: In partnership with the National Renewable Energy Laboratory, USAID has developed ongoing and successful renewable energy programs in at least 13 countries representing nearly one billion people.

Now the real point of this article is simply to make readers aware of the multiple electrification projects that have been successfully undertaken by USAID over the years. Please let your legislators know that it is a mistake to forego these positive developments that cast a bright and positive light on America helping other nations improve access to electricity and thereby putting our country in a good position to win friends and influence governments around the world. If we can’t continue to help our international brothers and sisters, then surely our frenemies will step in and cheer our departure from this charitable component of the American nation on the world scene.

Here is a key example of some remarkable electrification successes attributable to wise research, planning and investment decisions made by USAID management and staff over the past 63 years.

Ukraine: USAID had been helping Ukraine strengthen its power grid, improve energy efficiency, and increase the use of renewable energy sources.
Papua New Guinea: USAID supported the PNG government in its efforts to expand electricity access, with a focus on off-grid solutions and private sector engagement.

South Asia: USAID had been working with countries in South Asia to support their energy sector transformation, including the development of renewable energy and the improvement of energy efficiency.

These efforts have benefited many of the citizens in these and at least a dozen other countries with basic electrification to remote areas, infrastructure electrification of transit and transport systems, upgrading of power lines and substations, and a more positive view of America and Americans. This is one vital approach to keep the U.S. influential and strong among global communities. This is a display of soft power at its finest. Andrew Natsios had served as USAID administrator under President George W. Bush. He recently stated, “USAID is the most pro-business and pro-market of all aid agencies in the world.”

Nonetheless, as I write this article, the administration has apparently concluded its review of USAID, and indicated that just about all of USAID’s programs would be cancelled, involving approximately 5,200 contracts. We who are active participants in the energy industry need to raise our voices in support of USAID and its role in expanding American influence and winning friends for the nation around the world. At the same time, it is important for us to realize that the Voice of America has been another strong component of our foreign policy since the early days of World War II. News of energy developments in the U.S. and worldwide have been among the news stories broadcast over the VOA throughout these last eight decades. While traveling to nearly 135 countries during my own active energy industry research studies over 45 years, I have been made aware of VOA broadcasts listened to by energy industry colleagues in languages ranging from Farsi and Arabic, to Russian, to Chinese and a host of other languages. In some countries, VOA is the only way for citizens to learn about American efforts and progress in sustainable development and obtain a glimpse of world news. VOA has served the world with a consistent message of truth, hope and inspiration. I can vouch for the VOA’s influence on the world community of nations based on my own experiences and travels in countries like Iran, China and Russia as well as much of Asia.

If our Congressional representatives and senators lack the will to raise their voices, then we must rise to do so. Adding the budgets of USAID and VOA together, the total allotment amounts to less than one percent of the federal budget. USAID is looked to by more than a million people around the world involved in sustainable development goals as well as multiple millions who have benefited from an array of successful energy initiatives now fully implemented.

Posted on by

Data Centers and AI Impacting Demand for Electric Power and for a Broad Array of T&D Equipment

On November 21, McKinsey & Company hosted an outstanding and timely webcast entitled Powering AI: Opportunities in Data Centers. If you have any involvement with data centers from a utility perspective or are involved with data center design, development, consulting or are simply interested in one of the booming sectors for power transformers and T&D equipment, you may want to spend an hour sitting in on this excellent webcast. The link is here: https://app.events.ringcentral.com/events/powering-ai-opportunities-in-data-centers-1966f3dd-0fb8-48ff-8093-1856433d6363/replay/UmVjb3JkaW5nVXBsb2FkOjI4MjI1
It seems to me that after a couple of months spent delving into the current situation regarding the impact of data centers on utilities and on transformer and other T&D equipment needs, both those in the U.S. and others around the world, there are a number of obstacles facing utilities that will also resonate with plans being made by data center owners and investors. The ongoing development of AI will lead to more numerous and more robust (hyper-scale) data centers being planned and constructed over the next five years.

However, the electricity markets in developed nations have built out and operate currently reliable supporting electric power infrastructure to meet recent demand levels. In many countries wherein only modest growth in power consumption is occurring, the available supply of electric power may not match up well with the growing power demands of data centers. In economic terms, the demand and supply curves are not in synch at this time, at least not at first glance, nor do they appear to line up any time soon. As a result, interesting work-arounds are being developed.

A range of options is available to meet the expected increases in power demand, and in the U.S., many utilities will need to increase the available supply of electricity through plant expansions, refurbishment or bring out of retirement some large fossil-fueled plants.
New power plants likely to be built in the near term to meet this rather sudden (in utility terms) huge increase in demand will be largely natural-gas fueled as these plants can be constructed and operating in a shorter time frame and at lower costs than can some larger renewables or other fossil-fueled projects. Recently, the Electric Power Research Institute (EPRI) stated that data centers may account for as much as 9% of power generation in the U.S. by 2030. Boston Consulting Group (BCG) has indicated power demand levels of well over 100 GW by 2030 may be reached.

Availability of electric power supply is only one part of the power equation needed to meet the upsurge in demand coming from AI developments and data centers. By looking at alternatives to today’s data center hubs, there are areas within the U.S. with more than sufficient power to meet current load requirements.
Permitting processes will have to be speeded up at the federal, regional, state and local levels while regulatory action must be taken to reduce obstacles to HV transmission development. During the 2020-2023 years, fewer than 400 new HV line miles have been annually added to the grid. Additional transmission assets must be developed. Transformer and other T&D equipment manufacturing capacity will need to be increased significantly. Training of a workforce that can support manufacturing is required, as is the need for developing capable data center operations personnel.

The data center-allied consortia recognize a near-term market need for their offerings and rightly want to seize on this opportunity. When searching for plausible sites, (as was voiced in the McKinsey webcast described above), companies are looking at secondary and tertiary regional locations – primarily heartland areas blessed with an abundance of power generation capacity to build new and very large data centers.

Today’s primary data center hubs around the world may be reaching capacity regarding electric power delivery capabilities and may have limited available infrastructure, so alternate site selection assessments are playing key roles for data center developers. Examples of secondary hubs in the U.S. include Chicago, Atlanta, Dallas and Phoenix, while Las Vegas, Reno and Columbus are considered examples of tertiary hubs at this time.
Today’s major U.S. data center owners/operators include subsidiaries of Amazon, Microsoft, Google and Meta along with Digital Realty and Equinox. Important locations (hubs) for very large data centers include Northern Virginia, home of the largest data center aggregation in the world, along with hubs in California and Texas and several other states.

As of November 2024, there are about 5,400 data centers operating in the United States alone. At least 380 new U.S.-sited data centers are being planned or being constructed at this time. Before these sites can become operational, large power transformers and high-voltage equipment must be purchased, manufactured, shipped, installed, tested and operational on the utility/energy provider side. A substation may have to be enlarged or a new substation built to serve the proposed data center.

The medium-voltage and low-voltage equipment used within the data center facility also has to be specified, purchased, installed and tested. Supply chain issues confront the utility-required equipment as well as the facility power equipment availability as manufacturer pipelines are somewhat clogged with the sheer volume of incoming orders, along with material sourcing issues, and in some cases, labor availability issues that can slow down production cycles and affect delivery times.
Effect of Tariffs
If the incoming Trump administration does follow through on its promise to impose 25% tariffs on imports from our friends and neighbors in Canadian and Mexican power equipment manufacturing locations, that action will add significantly to equipment costs and delivery delays, especially for power transformers and other T&D equipment, as a good percentage of both are currently manufactured in either Canada or Mexico.
The rapid increased in AI-fueled demand for very large and hyper-scale data centers will also significantly impact electronic devices with a requirement for increased cooling and heating systems needed for new generations of semiconductor developments.
It seems to me that a good option to meet the near-term reliable power needs of data center planners is to include on-site renewables with battery energy storage systems in addition to their grid-connected primary source of utility-delivered electricity. Sort of a hybrid micro-grid to supplement grid-supplied power.


Looking across the American industrial base, we note that manufacturers and other industrial firms account for only 1,145,000 meters, serving about 450,000 industrial firms in the U.S. There are more than 19,360,000 commercial sites and the number of residential consumers will surpass 143 million meters in the next few months.
However, when it comes to consumption of electricity, residential use accounts for 38.4%U.S. of total usage, while commercial use stood at 35.4% and industrial use accounts for a significant 26% of the total. It is foreseeable that the percentage of power consumed by industrials will increase rapidly to account for perhaps one-third of the total electricity consumption by 2030. This will be due not only to the rapid growth of data centers, but likely to some degree of additional discrete and process manufacturing facilities being reshored as well as new factories coming online.  SeeFigure1.In closing, it appears we will be in for a roller coaster of a ride, between the energy industry in transition, the need for more power capacity, and the explosive growth of not only data centers, now accompanied by a resurgence for high power requirements from a wave of new semiconductor fabrication plants, a likely strong expansion in mining industries, the reshoring of industrial firms, and a possible increase in several power hungry hydrogen production facilities now being designed for delivery  during the next five years.

– Chuck Newton

Posted on by

HV Substations and Equipment Expenditures Estimated at $11 Billion in 2023

 

The Newton-Evans HV Equipment Market Overview series of reports for 2024-2026 includes a total of 15 market snapshots or overviews for a variety of HV equipment.  The HV equipment totals for major components of substations and transmission network installation excludes additional billions spent on substation construction activities for both new substations and existing substation upgrades.

An excellent guide to substation project costs is the MISO Transmission Cost Estimation Guide for 2024, which can be found here: https://cdn.misoenergy.org/MISO%20Transmission%20Cost%20Estimation%20Guide%20for%20MTEP24337433.pdf .  This guide provides a wide array of related cost assumptions that include ancillary equipment related costs as well as some estimates of current-year equipment prices and project overhead costs.

The Newton-Evans’ estimated outlay of expenditures for  U.S. HV substation construction activities reached about $4 billion in 2023, a similar level as was the total estimated spending for all HV equipment categories other than power transformers, which, as a separate category, reached about the $3 billion level.  The estimates shown in Figure 1 includes total estimated spending for HV equipment being purchased in conjunction with new substation developments (bundled procurements) as well as the amounts purchased for equipment retrofits and upgrades in existing substations and network locations (“loose” procurements).

The total estimated spending shares for switchgear shown below includes both air-insulated and gas-insulated types.

Power transformers and P&C topics are treated separately from HV equipment in our market overview series of studies. The entire range of power transformers included in the total costs for HV substations amounted to an additional $3+ billion.  You can read up on U.S. power transformer market estimates here: https://www.newton-evans.com/a-mid-2024-assessment-of-the-u-s-power-transformer-industry/ .  The updated P&C series of market overviews will be published in early Autumn.

A listing of all HV equipment summary reports included in this year’s series of market overviews can be found here: https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-transmission-and-distribution-equipment-market-high-voltage-series/ .

Figure 1. HV Equipment Market Estimates and Outlook

A listing of all HV equipment summary reports included in this year’s series of market overviews can be found here: https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-transmission-and-distribution-equipment-market-high-voltage-series/

Posted on by

Key OT and IT Applications License Fees Reach $4 Billion Level for the U.S. Electric Power Community

The 2024-2026 “Overview of the U.S. Electric Utility Market for OT/IT Systems” from Newton-Evans Research highlights a significant growth trajectory in the market for operational technology (OT) and information technology (IT) applications within the U.S. electric power sector. Key points from the report include:

Market Size and Growth: In 2023, revenues from software license fees for OT and IT applications surpassed $4 billion, with expectations to reach $5 billion by 2026. This growth reflects the increasing importance and complexity of systems used by electric utilities and commercial and industrial (C&I) firms.

Application Coverage: The individual report summaries include a broad range of systems essential for utility operations and management, including:
Energy Management Systems (EMS)
Supervisory Control and Data Acquisition (SCADA)
Geographic Information Systems (GIS)
Customer Information Systems (CIS)
Outage Management Systems (OMS)
Meter Data Management Systems (MDMS)
Mobile Workforce Management (MWM)
Advanced Distribution Management Systems (ADMS)
Energy Market Management Systems (EMMS)
Generation Management Systems (GMS)
Distributed Energy Resources Management Systems (DERMS)
Control System Security offerings

Investment Beyond Licensing: In addition to the direct license fees, there are substantial soft dollar expenditures related to staffing and equipment necessary for developing, operating, and maintaining these systems. These additional costs can far exceed the hard dollar expenditures on licenses.

Historical Context and Trends: Historically, large utilities managed EMS and CIS through separate OT and IT departments. The evolution of the industry has led to increased integration and cooperation between these departments, resulting in greater IT/OT convergence by the 2020s.

Market Dynamics: While some applications have reached maturity and show slow growth, newer systems are experiencing rapid expansion. The competitive landscape includes over 50 major software providers, with an additional 35 companies focused on cybersecurity solutions for the energy sector, particularly for renewables asset owners and operators.

This comprehensive market overview underscores the critical role of both OT and IT systems in modernizing and optimizing electric utilities, highlighting ongoing trends and future growth areas in the sector. The OT-IT series of 12 reports can be ordered and downloaded here: https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-electric-utility-market-for-ot-it-systems/.

Posted on by

Historical Perspectives on Energy Management Systems Usage in American Electric Power Utilities

An Energy Management System (EMS) is a suite of generation and transmission applications software tools used to monitor, control, and optimize the performance of generation and transmission systems. Energy management systems are designed to reduce energy consumption, improve the utilization of the system, increase reliability, and predict electrical system performance as well as optimize energy usage to reduce cost. Over the past 40 years and more, I have been able to visit EMS installations in many states and in several other countries. Each site visited was somewhat unique in style, size, operational set-up and wall displays.

From the late 1960’s until the early 1990’s, energy management systems were highly customized for many of the 200 large American utilities (then mainly IOUs involved with vertically integrated operations) that required the capabilities offered by such technology as was available in that era. Several of these early systems were developed with precursor versions of today’s “digital twin” technology in the form of an operator training simulator which mimicked the real-time operational energy management system.

Early Days
Control Data Corporation (Minnesota) had been a leading supplier of EMS mainframe hardware platforms and systems to U.S. utilities through most of the 1970’s, with computers from Harris Corporation (Florida), IBM (New York) and GE (Arizona) also supplying mainframe and early minicomputers to serve as the platforms for early EMS applications. Early international EMS suppliers, like Westinghouse UK, ABB, Areva and Siemens were instrumental in supplying systems used in Western Europe, Asia and South America and in a few African countries (South Africa primarily). Some of these suppliers used international computer manufacturers including the French company, Groupe Bull (Honeywell Bull)

The era of “forklift” system replacements occurred for 30 years or more after the introduction of large EMS installations, at least through the first two generations of systems.
Vendor switches occurred among many of the first- and second- generation systems users, meaning hardware and software were both to be replaced with third and fourth generation systems available during the 1990s through 2010 era. These third-generation systems became available from start-up firms led by ESCA (Washington) and OSII (Minnesota) as well as from the principal global EMS suppliers like ABB, GE and Siemens – all active EMS market participants in North America. Moore Systems (Texas) also developed EMS capabilities. ESCA became a key business unit of Areva T&D, while OSII remained independent until its recent acquisition by AspenTech (and AspenTech’s parent, Emerson), finalized in 2022.

There were also a few custom systems developed during the late 1960’s to early 1970’s by defense and aerospace firms. Consolidated Edison procured a system developed by Boeing Corporation, using IBM 360’s as platforms. The Canadian aerospace firm CAE developed an early EMS for PSEG in New Jersey and another for Grant County PUD in Washington state.

In 1997, GE and Harris Corporation (another aerospace/telecom equipment firm) had formed the GE-Harris Control Systems business based in Melbourne, Florida. A few years later, CAE sold its interests in utility control systems to another large Canadian firm, SNC Lavalin. In 2010, SNC Lavalin’s Energy Control Systems business was sold to GE. During the 1990’s, the French firm Areva T&D became a global market participant with its wide range of e-terra control systems and infrastructure offerings. The company’s electric power business units were first divided up and sold to Alstom and Schneider in 2009. By 2015, GE had acquired Alstom’s electric power business units, including the popular e-terra system offerings.

Minicomputers take over
During the late 1970’s and early 1980’s mainframe computers were being replaced as EMS platforms by minicomputers, led by offerings from Digital Equipment Corporation (DEC) and Hewlett-Packard (HP). Modcomp, Gould, Data General, Prime Computer and a few others were also providing SCADA systems platforms to early SCADA systems developers like ACS, QEI, Tejas Controls, Telegyr (L&G) and several others from 1975 onward.

Restructuring the Power Industry
During the late 1990’s and onward, many states had required major investor-owned utilities to separate (unbundle and restructure) generation operations from T&D operations. ISOs and RTOs were put in place nationwide just before the turn of this century and oversaw interstate transmission operations in conjunction with the 200 or so utilities owning transmission assets. By 2019 EMS vendors were taking note from the ADMS community and began using the term “advanced energy management system” (AEMS) to indicate significant new EMS capabilities including the integration of renewables and energy storage and their impact on grid operations and voltage stability. Coupled with the rapidly increased speed of processing and analyzing contingencies, and improving the ability to dispatch and curtail distributed energy resources, these developments have helped enhance operator capabilities and visibility into the real-time electric network.

As the power generation mix and transmission requirements have become more complex, AEMS developments and capabilities are keeping pace with such needs. The impact of artificial intelligence will continue to provide human operators with more and better information and will likely become a discriminator among the key AEMS market participants. Recently, generation management systems (GMS) have been developed that now include many of the generation-side applications that were (and continue to be) components of an EMS as described in our market overview report on GMS.

EMS/AEMS Components
Three major components of a modern EMS include:

  1. Native Services: data acquisition and control; graphical user interface; linkage/connectivity options to other systems; large database capabilities. There are many objectives of an energy management software including an application to maintain the frequency of a Power Distribution System and to keep tie-line power close to the scheduled values.
  2. SCADA Services: load shedding, load restoration, network status; sequential control, switch order management, playback of historical events.
  3. Advanced Power Systems Applications (or Network Application Services): to include generation dispatching and control [AGC], transmission security management; voltage transient stability; unit commitment; state estimation contingency analysis, demand forecast, and dispatcher training simulator).

Factors affecting current period activities in the EMS/AEMS market include improvements in linkages to external systems (ISO/RTO MMS, AI-enhanced analytics, ADMS, energy storage systems, DERMS, WAMS) as well as new capabilities to react to NERC/FERC changes in bulk power regulations, transmission monitoring (DLR), cyber security guidance, visualization software, intelligent alarm processing, renewables integration linkages) also provided by third party firms such as ETAP, Nexans, OATI, CYME, Milsoft and others.

Newton-Evans’ 2024-2026 Market Overview Series on OT/IT Systems
The values of EMS software provided by such suppliers to EMS installations are estimated in the OT/IT series of market overviews, as well as is the overall EMS domestic market size and market trends. Related to EMS in the Market Overview series on OT/IT systems, market management, GIS, CIS/CRMS, OMS, GMS, SCADA/DMS, ADMS, DERMS and cyber security software are also provided. These topics are each treated separately in the 2024-2026 series of OT/IT market overviews just released by Newton-Evans. More information on the OI/IT series can be found here: https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-electric-utility-market-for-ot-it-systems/.

Article Sources: OSII, PSC Consulting, Schneider Electric, GE Vernova, ETAP, Hitachi Energy, Siemens Energy, Schneider Electric, Newton-Evans archived files.

Posted on by

A Look at the U.S. Medium Voltage Electric Power Equipment Services Market

The total MV services market is very large – possibly in excess of $15 billion. This larger view of the MV services market encompasses multiple segments such as field and in-plant equipment maintenance and refurbishment; construction-related services for distribution substations and MV under-grounding activities; training classes for utility/C&I engineering and operations staffs; site analysis and permitting for distribution utilities and renewables projects; and MV equipment testing services, including commercial test labs and field service diagnostics and testing firms. In addition, vegetation management and telecommunications services are both very large power utility-related businesses in their own right, with significant portions of segment revenue obtained from medium-voltage projects, and these topics will be covered in articles later in 2024.

U.S. Medium Voltage Equipment Services
The U.S. MV equipment services market itself is very large (>$4 billion is our estimated minimum market size) in total, comprised of at least three major sub-segments and is served by hundreds of national, regional and local-area electrical equipment service providers.

While much of MV equipment services growth for third party firms seems likely to be in the 3-5% range, there are a few areas that may see larger increases in revenues, including the upper MV ranges of switchgear, along with gas-insulated units and underground equipment. As well, transformer maintenance, repairs and retrofits are commanding more attention and relying on third party services as new transformer prices, product availability and long lead times affect grid reliability.

Numerous MV Maintenance Market Participants
In multiple research studies conducted over several decades, Newton-Evans Research has found more than 275 U.S.-based companies and organizations provide one or more types of MV equipment-related services to electric utilities and to C&I customers. Each of these was earning related revenues of at least $10 million in annual revenue, with about 45-50 firms in the group earning in excess of $20 million annually from the provision of MV-related services. There is a growing group of domestic firms earning in excess of $250 million in MV services revenue. Another large segment of commercial providers offers services in addition to equipment maintenance, repair and refurbishment. These include utility staff training services, equipment testing services and some portion of construction related (design/build) services.

When it comes to MV equipment services, two product categories account for the lion’s share of segment revenue. These are switchgear/circuit breaker and distribution transformer equipment services.  Let’s take a closer look at these.

MV Switchgear Services Revenue Assumptions based on Third Party Service Firm Website Information
Switchgear services (maintenance, repair, refurbishment and re-manufacturing) are often grouped with similar Circuit Breaker services and together account for several hundred million dollars of utility and C&I expenditures. There are national, regional and local area third-party T&D services firms that provide various levels of equipment services for utilities and the C&I communities. Some of the national names prominent in the switchgear services, maintenance and repair/refurbishment market include Shermco, CBS Services and Saber Power Services.

While many services firms are in the “small business” category and earn less than $10 million annually, there are several others that earn in excess of $100 Million from a variety of T&D equipment service offerings.

Distribution and Power Transformers
While Newton-Evans estimates as much as $900 million is spent annually on electric power transformer services and replacement parts, the majority of this amount goes for power transformers. Nonetheless, there are several firms that specialize in service and repairs for pole-top and pad-mount distribution transformers. Among the large firms that service, repair and refurbish transformers of all sizes and offer nationwide services, include companies such as IPS, Sunbelt Solomon, RESA and others. A number of smaller firms specialize in maintenance, repairs for distribution transformers at a regional level, including Northeast Power, UTB Transformers and Valley Transformers, Inc.

Twenty years ago, a Newton-Evans survey found that many utilities did not bother with repairs to, nor did they consider third party maintenance, of pole-mount distribution transformers. Unit replacement was easier and faster than was rework and repair. At that time, manufacturing capacity for pole-mount units was sufficient to meet domestic U.S. demand, and lead-times were quite short, compared with today’s market. Most electric power utilities had been able to procure and store scores or hundreds of spare pole-top units for emergencies or time-based replacement up until the COVID years.

All Other MV Equipment Services: The third arm of MV equipment services we consider to be comprised of “all other” equipment of significant cost – that is, costing multiple thousands of dollars. Based on a small sample utility survey conducted during late 2023, it appears that relatively low-cost equipment including reclosers, sectionalizers, fuse links, distribution line monitors, fault current limiters, surge arresters and MV capacitors were very likely to be replaced rather than repaired.

Our next article on MV Services will focus on construction-related services for distribution substations and MV undergrounding activities; training classes for utility/C&I engineering and operations staffs; site analysis and permitting for distribution utilities and renewables projects; and MV equipment testing services, including commercial test labs and field service diagnostics and testing firms.

Keep in mind if you need to have an understanding of the U.S. medium voltage equipment market, our report series of two to four page U.S. market overviews, covering 17 MV equipment types, may be helpful to you. The link for for further information and to place an online order is here:
https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-transmission-and-distribution-equipment-market-medium-voltage-series/

Posted on by

Substation Automation and Integration Services – Guiding the Way to the Digital Substation

Substation Automation Integration Specialists are firms (or business units of large electrical equipment manufacturers) that can assist with or develop and provide a full or partially automated electric power substation on a turnkey basis, leading to “digital substations.” These companies help utilities and C&I firms toward digital substations.  Such firms include dedicated businesses (see examples below) or can be business units of larger companies engaged in the electric power automation business as EMS/SCADA suppliers, RTU/PLC/PAC/gateway manufacturers or protection and control specialists.  As well, T&D engineering firms, from the nation’s TOP 10 in size and reach, to dozens of smaller but capable regional service businesses are involved in helping utilities and C&I firms integrate and automate (or digitize) the nation’s nearly 70,000 utility T&D substations and another several thousand substations that are managed and operated directly by C&I firms, including large renewables installations.

 

Four “tiers” of substation integration providers are included in our assessment:

  • Specialist substation automation integration service revenues in 2022.es
  • SCADA industry participants with substation devices (RTUs, FEPs, Relays, IEDs, platforms) offering substation integration expertise
  • National T&D Engineering Services firms with substation integration expertise
  • Regional T&D Engineering Service firms

Together, these automation and integration services providers accounted for nearly $400 million of substation automation and integrations services-related revenue in 2022 (Newton-Evans estimate).  Click on chart to expand view.

Turnkey costs for substation integration services range from an estimated $45-55,000 for a small distribution substation having few feeders to upwards of $250,000 for a large transmission substation. Some metro-area MV substations with 20 or more feeders can cost upwards of $300,000 to automate and provide device integration services.

The automation equipment/device costs are in the range of $50,000-250,000 for a distribution substation and can range up to $500,000 for smart equipment and integration services in EHV transmission substations.

These totals shown in the chart below for automation and integration services are but a portion of the total expenditures allocated to electric power substations.  New substation construction (greenfield) and up-rating activities (brownfield) account for a few billion dollars, while substation equipment and communications costs also account for several billion additional dollars.

Posted on by

Wind Turbine Controls Usage Patterns Study Underway

During April and early May, Newton-Evans Research is conducting studies on the American wind power market.  Of specific interest is the  wind turbine controls segment of the fast-growing renewables business.

We are researching the types and brands of control devices and control systems that are in use among the more than 72,000 wind turbines installed in the United States as of January 2023.¹

Importantly, most controls within the wind turbine itself are provided by the OEM – the wind turbine manufacturer.  In the U.S., that likely means one of six manufacturers that account for 90% of all utility-scale wind turbine installations as of January 2023.  Three of the six (GE, Vestas, Siemens Gamesa) accounted for a whopping 82% of wind turbine installations.  Three others (Mitsubishi, Nordex and Suzlon) account for nearly 6,000 operational wind turbines operating throughout the country.  In addition to the major OEMs, there are more than 10 other manufacturers having at least 50 or more operational U.S. wind turbine installations.  See Figure 1. (Click on the figure to expand the view).

When it comes to wind turbine controls, multi-site wind farm operators and owners have more say in determining control devices and control systems selections as needed, especially for controls that reside external to the wind turbine.   Larger wind farms configured with wind turbines from multiple manufacturers also tend to have more interest in procuring PLCs, SCADA systems and plant-wide and multi-plant control and monitoring systems.  Wind farm operators and owners also tend to make more of the turbine control selections when it comes to retrofitting wind turbines.

There are more than a dozen wind controls specialist firms actively marketing and installing pitch and yaw controls, and/or condition monitoring systems in the United States.  Many wind turbine control specialists active in the U.S. are headquartered in European countries having extensive wind power installations and decades of wind power experience, led by firms based in Denmark, with others in Spain, Germany, Austria and Italy.  Some companies provide their own fine-tuned PLCs and wind-specific SCADA systems (you can read our 2021 article on renewables SCADA here): https://www.newton-evans.com/scada-systems-for-the-renewables-energy-industry-and-adms-for-utilities/.

We are still seeking a few additional participants to two short surveys.  One survey is geared to wind farm operators/owners, and can be answered by experienced wind turbine technicians.  The second survey addresses the OEM and wind turbine controls supplier community.  If you qualify to participate, please contact Chuck Newton (cnewton@newton-evans.com) and a link to the appropriate survey will be forwarded. 

Note:  1. Wind turbine installation data is provided by the U.S. Geological Service:  https://eerscmap.usgs.gov/uswtdb/

Posted on by

A Look at the 2021 T&D Services Market in the United States

Over the past decade, the need for on-site T&D equipment servicing and parts replacement has grown, both for electric utilities and for commercial and industrial customers. While Newton-Evans has studied this portion of the T&D market in a cursory manner over the decades, we have not produced a multi-client study of this important segment of T&D-related spending. Even now, our definition of T&D services is not all-inclusive, as there is significant related expense incurred for equipment testing services (about $450 Million) and even more investment for replacement parts for ancillary equipment like structures, connectors, line tools, et al, accounting for multiple hundreds of millions of dollars.

While much of the cost of T&D equipment services and repairs is grouped as operating expense, we believe there may be some “replacement parts” costs that are likely classified as capital expenditures, especially costly parts for large power transformers and components for HV substation equipment.

The total value of expenditures for T&D equipment-related services and replacement parts in the United States is likely around the $4 Billion level as of 2021, and our estimate for global spending on T&D services is in the $18-20 billion range. These estimates exclude the costs of equipment unit replacement. Together, T&D equipment services, including repairs and replacement parts, accounted for perhaps $3.6 Billion to upwards of $4.2 Billion in 2021. See Figure 1.

Looking at T&D equipment field services, including repairs and maintenance services performed by third parties, our mid-point spending estimate is $1,750 Million. See Figure 2.

Similarly, the spending for replacement parts for HV, MV, LV equipment and for power and distribution transformers is estimated to be in the $2,200 Million range. See Figure 3.

The overall split of spending between utilities and the C&I community is about a four-to-one ratio in our view, with utilities accounting for the bulk of all HV, MV and transformer-related spending, but with the C&I group accounting for substantial portions of LV equipment services and replacement parts, some MV and transformer services, and occasional HV equipment servicing.

The largest portion of spending among the four categories studied for this article (HV, MV and LV equipment, and transformers of all sizes) is for MV equipment services and replacement parts. HV equipment services follow, then comes spending for power transformer services and LV equipment services.

Posted on by

Outlook for Grid Modernization from IT and OT Perspectives: Recovering the Momentum Lost During COVID

Over the past two years, the pandemic has affected our lives, our businesses and the nation’s plans for infrastructure modernization, including the electric power grid. We had earlier (2020) forecasted rather robust growth in spending on IT, OT and smart grid initiatives in a grid modernization report prepared for a client organization.

During the first year of the pandemic, Newton-Evans conducted a small sample study (25 large and mid-size utilities) of the impact of COVID on electric power transmission and distribution capital investment projects.

Observations from that 2020 study indicated capital investment plans for some utilities had been scaled back by as much as 50% for 2020 and 2021. Other respondents reported that capital projects had been deferred for 12, 24 or even 36 months. A few utilities held fast to their pre-pandemic investment plans as long as they could do so.

In Figure 1, note our belief that total 2021 expenditures for the combination of IT, OT and smart grid projects likely reached about $14.2 Billion. In 2020, Newton-Evans had estimated that 2021 would likely see about $16.1 Billion in these combined expenditures, but by that year, the pandemic had firmly taken hold, restricting the availability of utility workforce personnel. COVID also impacted the manufacturing of some electrical equipment and provision of consulting and engineering services related to IT, OT and grid modernization projects.


Figure 1.
NOTE: Total IT + OT + SG Expenditures = $14.25 Billion
($5.55 Billion for IT + $5.30 Billion for OT + $3.4 Billion for “pure” Smart Grid)
$14.25 B = about 4.75% of electric utility operating revenue or 3.6% of total electricity sales.
IT spending alone likely less than 2% of operating revenue.

Now, the question arises – What is included in “pure” smart grid investment? Here, we include smart grid devices and equipment that acquire and transmit data and other signals to monitor and/or control utility field operations outside of the substation fence. For the most part, these are 21st century developments or generational improvements over earlier “legacy” devices. Pole top RTUs, distribution line fault indicators and feeder monitors, multiple types of controllers (for capacitor banks, automatic circuit reclosers, voltage regulators, line mounted monitoring devices et al) and automated switches and protective devices).

The related advanced communications infrastructure including built-out portions of the utility wide-area networks, local area networks and supporting infrastructure for automatic metering equipment are also placed in the “pure” smart grid bucket. IT system components related to smart grid are typified by meter data management systems, the customer services links to outage management systems, and geographic information systems to name a few. Operations side systems and applications would include advanced distribution management systems which collect and aggregate the thousands of field data points now configured with intelligent electronic field devices mentioned earlier that assist in more effective operation of the distribution grid.

By the third quarter of 2021, some recovery in capital spending for transmission and distribution was underway, based on recent discussions with a variety of industry sources. Even now, in the first quarter of 2022, we are still in a cautionary progression, given the lingering concerns over, and the effects of the OMICRON variant on the utility labor force and on delays in equipment availability in some situations. By 2023, I anticipate combined investment in IT, OT and grid modernization projects as shown in Figure 3 below will increase to more than $16.6 Billion. When compared with a pre-pandemic outlook calling for about $19.2 Billion in such investment in the coming year this leaves a shortfall of $2.6 Billion.

Importantly, when utilities have been compared with other industries related to IT spending, at first glance the industry appears to invest relatively less of its revenues in IT and OT. However, we have found that even in this pandemic area, with total U.S. electric power revenues approaching $400 Billion, the investment in combined IT and OT, plus related portions of grid modernization technology projects (exclusive of the cost of grid modernization equipment), the level of capital spending for grid modernization is closer to the 3.6% – 4.0% investment level. IT spending alone hovers around 1.5%-1.9% of operating revenues. Adding in the industry’s investment in OT and in key technology aspects of smart grid projects, the relative investment in overall information technology in total climbs to a much more reasonable level. See Figure 2.


Figure 2.
Two key assumptions about this outlook:
1. COVID will be endemic, not pandemic, by 3Q 2022.
2. Infrastructure Investment and Jobs Act actually begins funding significant portions of the $72.3 Billion allocated for energy and electric power infrastructure renewal by mid-year 2022.

The impact of COVID on electric power industry investment during 2020 and 2021 and into 2022 has taken its toll. The question facing the industry and the nation is whether or not this estimated $16.5 Billion shortfall in grid modernization investment (as postponed or deferred from initial estimates) can be made up during the remaining years of this decade? My belief is that the investment gap will be narrowing over the next 36 months, as shown in Figure 3 below, and the pre- and post-pandemic trendlines will indeed converge in the latter years of the 2020’s. Closing the investment gap will especially be likely – and may occur earlier than anticipated with help from DOE funding. Much will depend on federal funds flows from the recently enacted Infrastructure Investment and Jobs Act – legislation that will enable additional billions of dollars to be provided for grid modernization programs and related energy projects. At least several billion dollars of the $72 billion or so earmarked for electric power modernization will be applied to IT, OT and “pure” smart grid projects, although the majority of the total budget is earmarked for transmission grid expansion, overall grid hardening and integration of renewable energy sources.

I believe that this forthcoming federal investment in the nation’s electric power grid – coupled with the investments of the nation’s utilities, must include funding for research and development of advanced technical solutions for ever higher levels of cybersecurity and grid resilience.

As of February 2022, the nation’s electric utilities are re-starting or initiating a number of grid modernization projects and programs, deferred in part over the past 24 months.  This activity will help boost IT, OT and smart grid device/equipment expenditures this year and into 2023. Figure 4 illustrates the near-term growth estimate we have made for the IT, OT and smart grid field components of capital investment as the effects of the COVID pandemic begin to wane in the first quarter of 2022.

Posted on by

Sizing the Market for Electric Power Grid Modernization In an Era of Pandemic

According to the U.S. Department of Energy’s Energy Information Administration, annual spending on electricity distribution systems by major U.S. utilities continued to increase year-over-year through 2019, with major utilities spending some $57.4 billion on electric distribution in that last pre-pandemic year. More than half of utility distribution spending in 2019 went toward capital investment ($31.4 billion) as utilities worked to replace, upgrade, and extend existing infrastructure. Another $14.6 billion was invested in operations and maintenance (O&M), and $11.5 billion was appropriated for customer expenses, which included advertising, billing, and customer service.

In 2019, much of the $31.4 billion distribution system capital investment (40%) was spent on power lines, both underground (23% of investment) and overhead (17% of investment). Distribution lines are added or expanded to accommodate new neighborhood development or higher electricity flows as sales increase.1
Keep in mind that when spending by municipal electric utilities and electric cooperatives are added to the EIA totals, the amounts reported by EIA actually would increase by about 25-30%, at least in our estimation.  The bulk of this additional non-IOU spending was for distribution expenditures.

We have increased these amounts for 2020 and 2021, if only to account for inflationary pressures on prices of electrical equipment and systems. Thus, our view is that, in 2021, about $60 Billion was spent in total, on electric power distribution activities in the United States. Of this amount, $33 Billion was estimated for capital investment, and about $20 Billion of the total went for distribution equipment and systems.


Fig. 1

Newton-Evans’ recent year studies of U.S. combined utility and industrial/commercial spending for dozens of specific T&D products, equipment types and systems suggest about $22 Billion was invested in about 70 specific T&D equipment types in 2021.2 Note that this estimate includes spending for both transmission and distribution. In fact, the total expenditures for T&D procurements likely exceeded 100 billion dollars. See Figure 2.


Fig. 2

This $22 Billion shown in the above chart excludes additional billions of dollars invested in power lines, underground cables, electric power poles, meters and ancillary equipment as well as customer-related spending, certain substation construction and O&M services.

One recent Newton-Evans’ study of capital investment changes brought on by the COVID pandemic, resulted in an expected drop in CAPEX from 2019 to 2020, followed by stabilization and a moderate increase in spending for some areas in 2021. Some respondents cited this as a “deferral” of investments rather than a cancellation of investments at the time of the study.3 Nonetheless, total capital investment by U.S. electric utilities during the 2020 and 2021 years likely centered around the $130 Billion mark.4

If the nation (and the entire world) can move on from the ongoing pandemic era, to an endemic period, grid modernization investment may recover some of the momentum lost or deferred from the past 24 months. As well, the significance of the passage of the Infrastructure Investment and Jobs Act in November, 2021, cannot be overstated. More than $60 Billion dollars of funding under this new act has been allocated to the energy sector, most of that amount earmarked for modernization of the electric grid.

Sources:
1. U.S. Department of Energy, Energy Information Administration
2. Newton-Evans’ Market Overview Series on various T&D Topics
3. Newton-Evans Research Study of Capital Investment among U.S. Utilities in Midst of Pandemic Conditions (1-2 Quarters, 2020)
4. Newton-Evans Calculations of 1.28 x EEI/EIA estimate of $107 B. Newton-Evans’ estimate very similar to estimate prepared by Statista, which itself was sourced in part from S&P Global Market data.

Posted on by

SCADA Systems for the Renewables Energy Industry and ADMS For Utilities

Introduction:

Newton-Evans believes that there is significant opportunity for providers of SCADA-related systems and application software to help manage the operations of commercial and utility-scale wind and solar power resources.

The U.S. Department of the Interior’s USGS agency reports that there are about 67,000 large (utility-scale) wind turbines in operation in the United States.  These thousands of wind turbines are installed at about 1,500 sites or farms.  The country is adding about 3,000 utility-scale wind turbines each year. (!)

According to the U.S. Department of Energy’s EIA (Energy Information Administration), there are more than 2,500 utility scale solar plants/farms now operating in the United States.  Most of these facilities represent from 1 to 5 megawatts of generation capacity. (2)  There have been a number of larger solar plants coming onstream in the last five years.

Each of these 4,000-plus utility-scale renewables sites now operational in the U.S. requires a SCADA-like system to acquire operating information and to coordinate grid planning activities.  For enterprises operating multiple facilities, capabilities exist to coordinate multiple SCADA installations (or site automation/control systems) under the control of a larger company-wide or utility-wide SCADA system.

Wind Power SCADA

There are four types of SCADA providers serving the wind power industry as shown here:

 

 

 

The first group of wind SCADA offerings is comprised of the leading wind turbine manufacturers for the U.S market, including GE, Siemens and Vestas, (collectively representing about three-quarters of US wind turbine sales) and supplemented with some Chinese manufacturer installations and supporting control systems software from either Goldwind or Envision, both of which have a U.S. presence and have current installations around the country.

The SCADA applications developed by each turbine manufacturer center around wind turbine controls, but the offerings also extend to include a bevy of related monitoring and control applications for commercial wind farms.  The SCADA offerings from these firms appear to be designed with current generation software platforms and incorporate some useful apps development tools – an optimal solution for those sites that make use of wind turbines from a single manufacturer.

The second group of wind SCADA offerings is provided by a number of wind technology specialist firms, including DEIF, Grantek, Halus and SCADASolutions.  Offerings from these firms enable wind farm operators having wind turbines acquired from multiple suppliers to work in an integrated manner, analogous to a substation automation system that has to coordinate among multiple protective relay suppliers.  Status reporting, turbine condition assessment, activity controls can be accomplished by the SCADA offerings from these suppliers, regardless of the turbine type, size or manufacturer.

The third group of wind SCADA offerings comes from “generalist” SCADA suppliers, those companies that provide packages or configurable SCADA to multiple industries, from energy utilities to process industries, to discrete product manufacturers and commercial building control systems.  Products from leading suppliers including PcVue, Iconics, Wonderware (Aveva) and others have all been successfully applied to numerous wind farms in the U.S. and elsewhere.

The fourth group of offerings that have made some inroads with utility-operated wind farms is provided by the “traditional” suppliers of electric utility SCADA, DMS and energy management systems.  Most of these firms have now developed requisite software or have partnered for development of wind energy applications, and have likely implemented wind applications for one or more utility customers at this point in time.  Included here are large companies such as ABB and Schneider, as well as key suppliers to the mid-size utility market and include firms as ACS-Indra, OSI, QEI, Survalent and others.

Solar Energy SCADA

The more than 2,500 utility-scale solar farms operating in the U.S. also have a requirement for SCADA systems.  Similar to the groupings of SCADA providers in the wind sector, there are four major types of solar SCADA offerings for the U.S. market.

There are at least five solar SCADA specialist firms operating in the U.S. market in 2021 having currently installed solar SCADA systems, and there are likely additional firms operating on a regional basis around the country.  These firms primarily serve commercial solar energy facility operators.

Distribution utility SCADA providers have also developed several solar and DERMS applications of interest to their utility customers operating solar facilities.  If not solar applications specialists themselves, the utility SCADA/DMS systems can partner with or link with offerings from solar IT/OT specialists

The third group of solar SCADA providers is comprised of: a) large firms that have traditionally provided distributed control systems for electricity generation plants; and b) the multinational firm providing large-scale EMS/SCADA/ADMS systems.

Generalist SCADA suppliers that were listed earlier for the wind farm sector of renewables are also actively participating in the solar market as well.

The Utility Role in Aggregating Non-Utility Renewables (Utility-Scale Distributed Energy Resources)

Recently, the NREL reported that “Although 23 utility-led efforts exploring DER aggregation were launched in the United States by late 2018, DERMS remains in the nascent stages of implementation, with many utilities still in the process of exploring or piloting the range of available commercial solutions.” .(3)

Newton-Evans Research had earlier estimated that the U.S. utility DERMS market in 2020 had reached about $75 million and is likely to double to $150 million by 2024. (4)

Control is the Key

Importantly, the less control over renewable energy resources that the utility industry has (at both the transmission and distribution levels) the more tightly coupled and securely linked must be the control systems with which the utility can best manage operations to ensure grid stability.  This is why there is a separation between SCADA at the distributed energy resource site level which must be in place for operational data acquisition and is the rationale for the utility to have an up-to-date GIS providing DER locational data, supplemented by weather information as part of (or available to) it own DERMS and/or available to (or co-resident with) the DER site(s).

The prosumer-aggregator category of DER supplier adds yet another dimension lending additional urgency to the need for a comprehensive and scalable DERMS designed specifically for utility use.  While the author has read about the need for DERMS at the renewable facility level, the real need at these thousands of sites is for a SCADA-type system that can summarize information for the asset owner/operator and transmit requisite information securely to the utility entity (transmission or distribution-level) to enable the utility to optimize grid operations.  Multi-site renewables facilities will need their own large system to manage all assets regardless of location.  A fine example of a multi-site (on a nationwide scale) renewables SCADA system and national control center) is that of Iberdrola. (5)

What seems clear at this time is that the inclusion of renewables owned by aggregators (commercial and community levels) as electric power generation resources adds significant complexity to the already sophisticated nature of utility-operated transmission and distribution grids.  A quarter century ago, most power generation assets were under the direct control of utilities.  That is no longer the situation with an ever-increasing portion of power generation coming from renewables, and with a high percentage of renewables sites not owned or operated directly by regulated utilities.

In turn, a smooth-running grid will require ever-closer systems and telecommunications collaboration among T&D utilities, ISOs/RTOs, aggregators and regulators.  Disparate systems will have to be linked to some degree, with secure and reliable communications becoming absolutely vital to the safe, secure and reliable operation of the country’s power grids.  It will be incumbent on utilities to manage these complex relationships with all the technical resources available, because after all is said and done, it is the nation’s electric utilities that are charged with the operation of the grid on local and regional levels.

The increasing complexity of today’s grid architecture and the challenges posed to IT/OT staffs to develop comprehensive systems that can meet current and likely regulatory requirements to safely and securely accommodate commercially-owned power generation assets is among the greatest challenges found in any sector of the nation’s industrial, commercial, government sectors.  The need is paramount for a new generation of ADMS, AEMS, DERMS, SCADA/DCS. GIS and DRMS that are each based on open standards, configurable, scalable and capable of providing two-way telecommunications pathing.

Here is one view of how renewables SCADA systems are playing and will continue to play an important role in enabling utility-level coordination among aggregators at the commercial and community levels, and aligned with regional requirements of ISO/RTO organizations.

 

 

  1. Source: https://www.usgs.gov/faqs/how-often-us-wind-turbine-database-updated?qt-news_science_products=0#qt-news_science_products
  2. Source : https://www.eia.gov/todayinenergy/detail.php?id=38272
  3. National Renewable Energy Laboratory (Washington, D.C.)  Expanding PV Value: Lessons learned from Utility-led Distributed Energy Resource Aggregation in the United States, https://www.nrel.gov/docs/fy19osti/71984.pdf.
  4. Note that the Newton-Evans’ growth estimate, though moderately strong, is in fact lower than that of other energy research and consulting firms having a focus on DERs and DERMS.
  5. Iberdrola.  National Control Center: the most advanced renewable energy control center in the United States. https://www.iberdrola.com/innovation/core-renewable-energy-operation-center-usa

 

Posted on by

Estimated U.S. Sales of Power and Distribution Transformers more than $4.1 Billion in 2017; $4.4 billion by 2020

The Newton-Evans Research Company has announced the publication of a new set of 13 U.S. transformer market segment summaries. The new series of market overview reports (executive market summaries) includes definitions, representative products, estimated market size for each transformer market segment, vendor market share estimates and market outlook through 2020. Electric utilities accounted for about 87% of purchases of small, medium and large power transformers and a variety of distribution transformers.
Continue reading Estimated U.S. Sales of Power and Distribution Transformers more than $4.1 Billion in 2017; $4.4 billion by 2020

Posted on by

Proposed Import Tariffs: A BAD IDEA for the U.S. Electric Power Industry

by Chuck Newton

We all know that the current administration wants to “make America great again,” but using tariffs to prop up our homeland infrastructure is not the right approach to take at this time.

The U.S. electric power industry can ill afford the extra costs that would be incurred with the placement of 10-25% tariffs on iron, steel, and aluminum, which are core building blocks of our nation’s electrical infrastructure with a good percentage of finished electrical apparatus, equipment and ancillary products manufactured with imported steel and aluminum. Continue reading Proposed Import Tariffs: A BAD IDEA for the U.S. Electric Power Industry

Posted on by

Hubbell, Inc. Becoming a Stronger Participant in the Market for Grid Modernization with RFL and Aclara Acquisitions

Here are the reasons for our viewpoint that Hubbell’s Power segment (known as HPS) will lead the company’s growth over the coming years.
Continue reading Hubbell, Inc. Becoming a Stronger Participant in the Market for Grid Modernization with RFL and Aclara Acquisitions

Posted on by

A Closer Look at the Changing Russian Electric Power Industry

Russia is the world’s third largest consumer of energy, and as such the country has announced plans and programs to modernize its energy infrastructure, especially for the nation’s power sector. Currently, the Russian national power grid includes more than 230 GW of production capacity. The country’s utilities are known as energos. These energos operate more than 31,000 T&D substations located throughout multiple regions and time zones. There are almost 800 large scale power plants in the country, including 15 nuclear sites operating some 35 reactors. Seven new nuclear units are now under construction as of mid-2017.
Continue reading A Closer Look at the Changing Russian Electric Power Industry