Global Data Center Substation Market Size, Share, Growth Analysis, By Component(Transformers, Switchgears), By Voltage Type(33kV - 110kV, 110kV - 220kV) - Industry Forecast 2022-2028

Global Data Center Substation Market size was valued at USD 9.5 billion in 2021 and is poised to grow from USD 10.09 billion in 2022 to USD 17.34 billion by 2030, growing at a CAGR of 6.2% in the forecast period (2023-2030).

It is anticipated that the market will grow over the forecast period as a result of the increased demand for reliable, uninterrupted electrical transmission and distribution to power data centre facilities. A substation is a structure used in a power network where circuit breakers or switches are used to connect distribution feeders and transmission lines. This enables the network's power flow to be regulated as well as common switching tasks for upkeep. The voltage in transmission lines is primarily raised or lowered in these constrained zones to a particular level suitable for the distribution system. The quick growth in the amount of structured and unstructured data, as well as the increasing demand for cloud computing, will drive up the demand for reliable and effective substations. Due to the Internet of Things (IoT), social media, and digitization, the global data centre industry is growing. The demand for bigger, greener data centres has increased as a result of these applications' and technology's rising use in recent years. In addition, as social media usage and online video streaming have grown, so has the amount of data that data centres handle. This has prompted companies to invest in dependable, dedicated data centres to guard against information loss and ensure business continuity, energy distribution, and security. The building of data centres has increased the demand for electricity needed to power them at a never-before-seen rate. It is anticipated that this would lead to an increase in demand for data centre substations.

Data centre substations sales have suffered significantly as a result of the COVID-19 pandemic outbreak, related supply chain difficulties, and temporary halt to manufacturing. Additionally, as business activity slowed during the pandemic, less electricity was used. The fall in power usage has led to a very small number of investments being made in the substation sector in 2021. The outbreak also caused a slowdown in the construction industry, with data centre development projects suffering the most. Several data centre construction projects were temporarily put on hold or stopped in order to ensure that lockdown and social distance measures were followed and to safeguard worker safety. The market's activity decreased slightly as a result of this suspension.

Due to the growing use of digital substations, the industry is anticipated to develop in the next years. Digital substations help to reduce environmental impact, extend asset life, and reduce maintenance costs. These substations use fibre optic cables to link to the control panels rather than copper ones, which eliminates the need for copper control cables and lowers installation costs as well as decommissioning and recycling costs. Market growth is anticipated to accelerate as more emphasis is placed on replacing obsolete electrical substation infrastructure with cutting-edge, better, intelligent, and digital systems.

Along with the rising energy demand for infrastructure maintenance and modernisation, the industry has profited from increased investment on the extension of long-route high voltage networks. However, there are some challenges that must be overcome for data centre substation construction projects, such as high initial costs, difficulties acquiring land, protracted project cycles, tiresome maintenance and repair work, and complex substation facilities that cannot be successfully integrated into their surroundings. The long-term benefits associated with a substation's life cycle are anticipated to offset the issues related to expenses, nevertheless. As a result, attempts to construct new, energy-efficient, digital or modular substations are anticipated to have a positive impact on market expansion.

Top-down and bottom-up approaches were used to estimate and validate the size of global Data Center Substation Market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined by using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analysed to get the final quantitative and qualitative data.

Segments covered in this report

Global Data Center Substation Market is segmented based on Component, Voltage Type, and Region. Based on Components the Data Center Substation Market is further sub-segmented into Transformers, Switchgears, Relays, Capacitors, Busbars, and Surge Arrestors. Based on Voltage Type the Data Center Substation Market is further sub-segmented into 33kV - 110kV, 110kV - 220kV, 220kV - 500kV, Above 500kV. Based on Region the Data Center Substation Market is further sub-segments into North America, Europe, Asia Pacific, Latin America, and MEA.

Driver

Data centres have developed into an increasingly significant component of the modern economy, from the servers running in SME's to the setup of data centres supporting large business corporations and the plantations operating cloud computing services hosted by various technology giants like Amazon, Facebook, and Google. In the wake of a globally snowballing digital economy and the data centre sector, which is always tasked with staying ahead of clients' IT roadmaps, diverse end users have grown to set themselves apart with varied data centre requirements. Data storage demand is rising as a result of the rising popularity of big data analytics and cloud-based services, which include online media like social media, apps, and video and movie streaming. The market for data centre substations is growing as a result of the increased need for data centre substations to obtain enough power supply.

Restraint

To transition to an on-site power supply, data centres must overcome a number of challenges. The largest obstacle for businesses is typically the upfront cost of on-site energy. The cost and effort required to move power on-site are significant in the short term, which discourages many companies from implementing data centre substations.

The company's leadership is undecided about whether or not to apply these technologies because year-to-year swings in fuel prices make long-term planning difficult. When constructing a data centre, there are numerous distinct considerations that must be made. Engineering, authorizations, permits, generator enclosures, conduit and cabling, data centre lighting, lighting protection, HVAC, fire suppression, and other difficulties are all taken into account.

Primary Market Trends

The Data Centre Substation market as a whole is influenced by three key trends: the Internet of Things (IoT), social media, and digitalization. In addition, the growing use of these applications and technology in recent years necessitated the construction of larger, more environmentally friendly data centres. Additionally, as social media usage and online video streaming have grown, so has the amount of data that needs to be handled by data centres. As a result, businesses are investing in reliable, dedicated data centres to safeguard against data loss and ensure business continuity, energy transmission and distribution, and security. The expansion of data centres has led to a rise in the need for electricity to power them.