Electric Power Transmission & Distribution (T&D) Equipment

US demand to rise 5.2% per year through 2015
US demand for electric power transmission and distribution (T&D) equipment is forecast to climb 5.2 percent per year to $25.8 billion in 2015. Increases will be fueled by continued growth in electricity demand and the rising use of renewable energy sources, many of which will require significant investment in the electric grid to enable these remote generators to deliver power to customers.

Gains in the market for electric power T&D equipment will also be supported by investment in the US electric grid as part of an effort to modernize and upgrade the system to the so-called “smart grid.” In addition, demand from electric utilities will continue to grow as a result of regulatory efforts to ensure that investment in the electric grid is rewarded. However, a slowdown in electric utility capital expenditures will prevent demand from growing even faster. Increases will also be limited somewhat by moderating prices for many types of electric power (T&D) equipment, following a spike in raw material prices between 2005 and 2008.

Electric utilities and industrial sectors to remain largest markets
The electric utilities and industrial sectors have traditionally been by far the largest markets for electric power (T&D) equipment. In 2010, electric utilities accounted for half of total demand. This market is expected to record the slowest growth through 2015, although it will remain the largest market in the industry. Gains in that period will be bolstered by increased investment in the electric grid by utilities. The industrial sector, which includes nonutility generators, accounted for an additional 32 percent of total demand in 2010. Advances in the industrial market will be spurred by increasing electricity generation by independent power producers and cogenerators. The deregulation of the electric power industry will continue to shift demand from utilities to industrial firms and nonutility generators.

The smaller residential market will register the fastest increases through 2015, with gains supported by the sharp turnaround in residential construction activity and residential fixed investment. Similarly, the commercial building market will record the next fastest gains, as office and commercial construction expenditures rebound after a period of decline.

Meters, molded case circuit breakers, and nonutility transformers to lead gains
Meters, molded case circuit breakers and nonutility transformers will record the fastest growth among the various products in the electric power (T&D) equipment industry. Demand for meters will benefit from the growing use of more advanced and expensive “smart meters” that provide customers with pricing signals and thereby help limit power consumption. These smart meters form an important part of the developing smart grid. Demand for molded case circuit breakers will be supported by the sharp increases in overall construction activity, boosting demand for essential electric equipment. The market for nonutility transformers will be driven by deregulation of the electric power industry in a number of areas, which has led to an increase in electricity generated by nonutility companies.

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