SCADA market expanding as global energy requirements increase

A report by Frost & Sullivan indicates that greenfield and brownfield expansions as well as smart grid growth and a favorable investment climate are helping boost the SCADA market, but changing technology trends may limit its overall growth.
By Frost & Sullivan January 14, 2016

The emergence of global smart grid projects is widening the usage scope of supervisory control and data acquisition (SCADA) systems in energy and utility industries. Recent analysis from Frost & Sullivan on the global supervisory control and data acquisition (SCADA) systems market in the energy and the utility industries finds that the market earned $4.55 billion in revenue in 2014.

The report estimates the market will reach $7.34 billion in 2021. Some of the main areas of application for these systems are outage management, demand forecasting and analytics, and the single biggest market; the electric power industry with a share of 64.3%.

While the emerging markets will prove attractive to SCADA suppliers due to their high energy demand, the European Union (EU) is also fostering a favorable investment climate with its focus on renewable projects.

"On the one hand, the escalating energy requirements have created opportunities for greenfield expansions, while on the other, the need to modernize aging pipelines, power grids and water infrastructure have stoked brownfield opportunities," said Frost & Sullivan Manufacturing 4.0 Senior Industry Analyst Piyush Dewangan. "In addition, shale gas exploration activities in North America are accelerating the deployment of SCADA systems."

Although SCADA system vendors are making an effort to keep pace with changing trends, advancements in communication technologies will disrupt SCADA architecture. As devices directly communicate with next-generation enterprise software in real-time and all business processes are integrated, there will be a drop in hardware revenue. Demand for application software, however, will gather momentum. 

The global oil price fluctuations and economic challenges in Europe, the Middle East and Africa (EMEA) will further dampen market growth rates. In addition, concerns regarding cyber security will shift end-user priorities from capacity development to security-related projects, limiting the adoption of SCADA systems.

"To appeal to a larger pool of end users, suppliers are offering strong value propositions with value-added application software and associated services," Dewangan said. "Suppliers are also building service portfolios that manage cyber security in order to suppress apprehensions and ensure success in the global SCADA market."

Frost & Sullivan

www.frost.com 

– Edited from a Frost & Sullivan press release by Chris Vavra, production editor, Control Engineering, CFE Media, cvavra@cfemedia.com.

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Access the full Frost & Sullivan report here.

– See additional stories about SCADA applications linked below.