Column: Market review
Global investment and the future market for T&D equipment
Global investment in T&D infrastructure is set to rise by 4.3 % CAGR between 2018 and 2028. Current investment is calculated at $232.9 billion and this will reach $355.1 billion (constant 2018 US$) by the year 2028. Growth rates vary greatly from region to region. The region displaying fastest growth is the Indian Sub-continent with 7.1 % CAGR, Asia overall is forecasted to grow at 5.1 %, North America at 3.1 % and the region with the lowest growth rate is Western Europe at 1.9 % CAGR. Other areas are forecasted to grow at between 3 % and 4.5 % CAGR with some very large variations in individual countries – some African countries will grow at rates of over 8 % and some in Asia at greater than 7 % albeit from relatively small bases. Currently the 18 countries of Asia account for some 43 % of the total global investment and with the growth rates expected they will increase their global market share to nearly 47 % in 2028. It has to be acknowledged that even though China accounts for two thirds of that regional demand there are nevertheless two other countries – Japan and Indonesia, that will breach the $10 billion level and five others that will be approaching $5 billion p.a. spend.
Many countries in the developing world are still completing the installation of their transmission and distribution networks and there are multiple examples of countries with less than 100 % of the populous having access to electricity. Often these are small nations with high growth rates in very small markets but there are two examples of large markets in this phase of development; India and Brazil with $10 billion and $6.7 billion respectively. Both countries are striving to complete electrification and in both the twin aims of expanding the grids to provide the electricity coverage of the entire country go hand in hand with the necessity to distribute supplies to consumers. In both of these countries the investment in transmission accounts for 35 % to 40 % of the total investment and the distribution investment consumes the lion’s share of the funds. Each country recognises the benefits to economic development that result from a stable and secure electricity supply, yet both have struggled to find funding to implement these plans.