In spite of the hard hits they took in 2009, the markets for PLCs, PACs and SCADA systems are expected to grow over the next five years according to analysts at ARC Advisory Group.
The worldwide Electric Power SCADA market will grow at a compound annual growth rate (CAGR) of 9.3% from 2009 through 2014 according to a new report. ARC projects this substantial growth will result from a confluence of new technology and worldwide infrastructure spending fueled by sovereign investment programs. These programs are focused on the expansion of grid capacity in emerging markets, plus upgrading of aging transmission and distribution infrastructure, and improvement of reliability and efficiency.
"These concurrent sovereign investment programs have the common goal of increased grid efficiency and responsiveness. Modern SCADA systems support these goals by enabling improved control and monitoring while serving as the backbone for energy management, distribution management, and smart grid initiatives," according to Clint Reiser, enterprise software analyst.
China, India and several Middle Eastern countries are allocating substantial amounts of capital to electric power grid expansion and modernization projects. China is in the midst of a large-scale, nationwide grid extension and modernization project. In 2010, Chinese government and industry leaders have stated that a "unified strong and smart grid" system is going to be built across the country by 2020.
India's Restructured Accelerated Power Development and Reforms Program has the objective of reducing aggregate technical and commercial losses down from the current average of 33% percent to 15% or less.
The Indian government has committed more than Rs. 51,000 ($10.5 billion) to this sustained loss reduction program. ARC believes that the program will stimulate substantial investment in SCADA systems.
The American Recovery and Reinvestment Act allotted $4.5 billion ($8 billion including private matching) to modernize the electric grid, enhance security of U.S. energy infrastructure and ensure reliable electricity delivery to meet growing demand. Many of these investments focus on improvements in grid automation, control and real-time information management—all of which are functions supported by power distribution SCADA systems.
The PLC and PAC markets will also benefit from some of the same drivers. New stimulus packages from various governments added more investments in the infrastructure industries, including new road construction, water and wastewater infrastructure, and electric power generating plants. Globalization has also created a large demand for modern infrastructure, especially in emerging economies.
"Growing demands for energy savings, higher infrastructure productivity, increased production accuracy, better product quality, greater machine agility, tighter process control and additional safety are some of the crucial factors that will fuel market growth," according to ARC senior analyst Himanshu Shah.