Technavio analysts forecast the global automatic generation control (AGC) market to grow at a CAGR of more than 3 per cent during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the global AGC market for 2016-2020. The report discusses the major drivers influencing the market growth and the challenges faced by vendors and the market as a whole.
The growing competition in the power sector and need for optimization of utility resources are the major drivers for the global AGC market.
Changes in grid structure drive demand for IT implementation
The resources used for power generation has evolved from fossil fuels to low carbon or no carbon fuels. Utilities and energy companies are making changes to the functioning of the grid to accommodate these fuels.
“IT systems help in collaborating and transforming the grid to accommodate low carbon polluting technologies such as renewable resources, distribution generation, and energy storage, thus making power generation multi-dimensional,” said Thanikachalam Chandrasekaran, a lead smart grid analyst.
Traditional power grids had linear power generation, partial interaction with customers, and one-way communication; however, energy and utility companies are improving each part of the value chain by implementing new IT technologies.
“The additions of various sources of power generation have increased the complexities of grid operation, making it necessary for utilities to use power management systems such as AGC,” adds Thanikachalam.
Increase in investments in smart grid technologies
The growth in global population has triggered an increased demand for electricity. Transmission and distribution losses, rise in demand for power, and the demand-supply mismatch are leading to global power crisis.
To overcome this challenge, countries such as the US, China, India, and the UK have started adopting smart grid technologies such as phasor measurement units, RTU’s IED, and smart meters.
The shift to smart technologies will enable the grid operators to gain additional visibility to the functioning of each asset in the field, identifying the problem area, and carrying out timely maintenance. This improves efficiency and effectively balances the demand and supply of electricity.
Deregulation of power market
The electrical grid is a complex and dynamic system, as it involves various activities such as power generation, transmission, and distribution.
Earlier, the whole grid was largely owned and managed by a single entity; however, the power system changed drastically due to the deregulation that started in Europe and the US since the 1990s.
The deregulation gave rise to generation companies, distribution companies, transmission companies and independent system operators where in each activity was treated separately. The changes in the power industry motivated utilities to specialize in either power generation, transmission, or distribution.
The rise in competition led to the adoption of control systems such as EMS; this improves the services and power quality delivered to customers and enables utilities to stay ahead of the competition.
The deregulation also brought in independent producers into the power market. This led to the integration of several utilities through tie-lines, wherein they can exchange power to meet the respective load requirements in case of power shortage.