Digital Substation Market Size, Share, Trends, Growth and Forecast 2034

Digital Substation Industry Prospective:

The global digital substation market size was worth around USD 8.15 billion in 2024 and is predicted to grow to around USD 16.34 billion by 2034 with a compound annual growth rate (CAGR) of roughly 7.20% between 2025 and 2034.

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Digital Substation Market: Overview

A digital substation is the modern version of a traditionally used electrical substation. It leveraged advanced technologies such as communication networks, digital systems, sensors, and other intelligent devices to manage, control, and monitor electrical assets. Traditional electrical substations generally depend on manual operations and analog systems.

Market studies indicate that the use of digital substation promotes remote control, real-time monitoring, and predictive maintenance of essential power distribution equipment.

During the forecast period, the demand for digital substations is expected to grow due to the several advantages associated with the use of technology. The increasing integration of digital substations in renewable energy infrastructure, such as solar and wind farms, will generate more growth opportunities in the coming years.

Moreover, the rising installation of smart grids worldwide, along with the development of smart cities, will further escalate the industry’s overall revenue growth. A major barrier for the industry players against a smooth growth trajectory will emerge in the form of high upfront costs and expenditures.

Key Insights:

• As per the analysis shared by our research analyst, the global digital substation market is estimated to grow annually at a CAGR of around 7.20% over the forecast period (2025-2034)
• In terms of revenue, the global digital substation market size was valued at around USD 8.15 billion in 2024 and is projected to reach USD 16.34 billion by 2034.
• The digital substation market is projected to grow at a significant rate due to the advantages offered by the advanced substations.
• Based on the module, the SCADA segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on the end-user industry, the utility segment is anticipated to command the largest market share.
• Based on region, Europe is projected to dominate the global market during the forecast period.

Digital Substation Market: Growth Drivers

Advantages offered by the advanced substations will fuel market revenue in the coming years

The global digital substation market is expected to be driven by the several advantages offered by the technology over conventional substations.

According to industry research, digital substations leverage highly advanced digital technologies and automated solutions. They utilize Ethernet-powered communication networks, ensuring reliable and quick communication between primary equipment, protection & control systems, and other forms of external communications. Traditional manual stations are unable to keep up with the changing end-user demands and varying energy requirements.

For instance, in manual substation setup, officials are required to spend considerable time on manual equipment inspection. It creates a higher risk of human error and can also be time-consuming.

Fault-detection offered by digital substations is considerably more efficient than manual substations, promoting higher safety. As the awareness around the benefits of digital substation continues to grow, the industry players can expect higher profits.

Increasing investments in the development of modern power infrastructure to generate higher market growth

Governments and private companies across the globe are increasingly investing in developing more robust power infrastructure. The end-user demand for a reliable and uninterrupted supply of power across residential, commercial, and industrial units has fueled the increased adoption of digital substations worldwide.

For instance, in June 2024, Bharat Heavy Electricals Ltd (BHEL) announced the commissioning of India’s first digital substation using domestically developed 420kV fiber optical current transformers (FOCTs). The device also uses  IEC61850-compliant intelligent electronic devices (IEDs). According to company records, the ultra-high voltage laboratory developed by the company is the world’s largest screened testing facility for transformers.

In February 2021, Hitachi ABB Power Grid announced the launch of a new smart digital substation leveraging the Lumada Asset Performance Management (APM) solution offered by Hitachi. These cutting-edge innovations are expected to work in favor of the global digital substation market.

Digital Substation Market: Restraints

High upfront cost to limit the industry’s overall growth rate in the future

The global digital substation industry is expected to be restricted due to the high cost of initial investment. Digital substations use extremely advanced communication systems and next-generation sensor technologies, among other equipment.

For instance, the average cost of setting up a digital substantiation with a capacity of 500 kV can be around USD 50 million, depending on the overall features of the infrastructure. At present, the substation industry continues to be dominated by conventionally used manual mechanisms.

Digital Substation Market: Opportunities

Ongoing technological advancements in the industry generate massive growth opportunities for the players

The global digital substation market is expected to generate growth opportunities due to the ongoing technological advancements in the industry.

At the start of 2024, Hitachi Energy, one of the leading pioneers in the field of digital substations, announced the launch of SAM600 version 3.0. The novel process interface unit will assist utilities in amplifying the adoption rate of digital substations.

The SAM600 version 3.0 will be used as a process interface unit (PIU), delivering a consolidated version of three units in a single device. The overall structure of the solution promotes exceptional maintainability and flexibility.

In December 2024, Munster Technological University, in partnership with  H&MV Engineering and ABB, launched a Digital Substation in the Power Academy Lab of MTU’s Bishopstown campus. H&MV Engineering is a high-voltage design, engineering, and construction services provider, while ABB is a renowned technology leader. The Ireland region is expected to inch one step closer to its energy transition goals with the installation of Digital Substations in grid infrastructure.

Investments in renewable energy solutions to deliver exceptional revenue for market leaders

The ongoing development of large-scale renewable energy infrastructure, such as solar power plants and wind farms, will create growth opportunities for industry players.

The technology allows the collection of real-time information regarding the overall performance of the plant equipment. It also stabilizes frequency and voltage changes, reducing grid disturbances significantly. The surge in the number of renewable energy power solutions will be essential for digital substation solution providers in the long term.

Digital Substation Market: Challenges

Cybersecurity concerns will challenge market expansion in the long run

The global industry for digital substations is expected to be challenged by the growing concerns over digital crimes. The rising rate of cyber fraud worldwide has created several growth barriers for industry players.

Use of advanced interconnected technology, such as the Internet of Things (IoT) and cloud-connected sensors, makes digital substations vulnerable to digital offenses. These crimes can lead to significant monetary and non-monetary losses for utility companies and end-users.

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Digital Substation Market: Report Scope

Digital Substation Market: Segmentation

The global digital substation market is segmented based on module, type, voltage, and region.

Based on the module, the global market segments are fiber-optic communication networks, hardware, and SCADA. In 2024, the highest growth was listed in the Supervisory Control and Data Acquisition (SCADA) segment. It is the central and most essential system of a digital substation, controlling other critical components such as hardware, remote monitoring, automation, and fiber-optic communication networks. The segment is projected to deliver a CAGR of more than 9% during the forecast period.

Based on type, the global digital substation industry is divided into distributional substation and transmission substation.

Based on the end-user industry, the global market divisions are transportation, heavy industries, utility, and others. In 2024, the highest revenue was generated by the utility industry. It is responsible for essential services such as access to electricity and water to all facilities, including residential and industrial.

The growing digitalization of the utility sector worldwide will fuel segmental growth rates in the future. In 2024, the global utility industry was valued at over USD 7 trillion and is expected to deliver an improved CAGR during the forecast period.

Digital Substation Market: Regional Analysis

Europe to lead the way during the forecast period

The global digital substation market will be led by Europe during the projection period. European countries such as Denmark, the UK, Ireland, and others have been some of the early investors in digital substations. Using advanced technologies to monitor substation performance better allows companies to reduce their carbon footprints.

Europe has been seeking new measures to reduce carbon emissions and reach net zero as soon as possible. The power infrastructure of European countries is witnessing swift, organized, and highly effective digital transformation, opening doors for regional market growth rate.

In March 2025, DTEK, one of Ukraine’s largest private energy investors, announced that it had received EUR 11 million in funding from the French government. DTEK will use the gains to construct the country’s first digital substation. GE Vernova will deliver the required technology to build the much-anticipated digital substation in the country.

In a recent event, Hydro-Québec announced that it had selected Siemens to modernize and protect its Saint-Chrysostome substation. The German company will be responsible for automating the facility and enhancing the Canadian client's cybersecurity.

Digital Substation Market: Competitive Analysis

The global digital substation market is led by players like:

• Honeywell International Inc.
• Siemens AG
• ABB Ltd.
• Hitachi Ltd.
• Netcontrol Group
• General Electric Company (GE)
• Larsen & Toubro Limited
• Schneider Electric SE
• Emerson Electric Co.
• Belden Inc.
• Eaton Corporation Inc.
• NovaTech LLC
• Cisco Systems Inc.
• OMICRON electronics GmbH
• NR Electric Co. Ltd.

The global digital substation market is segmented as follows:

By Module

• Fiber-Optic Communication Networks
• Hardware
• SCADA

By Type

• Distribution Substation
• Transmission Substation

By Voltage

• Above 500kV
• 220-500kV
• Up to 220kV

By End-User Industry

• Transportation
• Heavy Industries
• Utility
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa