Digital Substation Market Outlook:
Digital Substation Market size was valued at USD 8.31 billion in 2025 and is expected to reach USD 16.97 billion by 2035, expanding at around 7.4% CAGR during the forecast period i.e., between 2026-2035. In the year 2026, the industry size of digital substation is evaluated at USD 8.86 billion.
The market is growing remarkably, driven by a combination of technological advancements, regulatory mandates, and the increasing demand for reliable and efficient power distribution systems. For instance, in February 2021, Hitachi ABB Power Grids announced the launch of its Smart Digital Substation offering. It combined the capabilities of Hitachi's industry-leading Lumada Asset Performance Management (APM) solution with the most recent advancements in digital substation technology. As utilities and energy providers transition from traditional electrical infrastructure to digital solutions, the integration of IoT, AI, and big data analytics is revolutionizing the operational capabilities of substations.
The enhanced capabilities of digital substations involve real-time monitoring, predictive maintenance, and automatic control capabilities. Moreover, a strong global drive towards renewable sources of energy calls for existing infrastructure to be updated with decentralized energy generation and smart grids. For instance, in June 2020, LF Energy launched its Digital Substation Automation Systems (DSAS) initiative. It aimed to increase the power grid's modularity, interoperability, and scalability to hasten the global effort to become carbon neutral by 2050. Collectively, these exceptional growth drivers underscore the pivotal role of digital substations in shaping the future of energy management and distribution, positioning them as a cornerstone of the evolving energy landscape.
