There has been an increasing demand for electricity
globally, mostly in emerging economies such as China, India, Eastern Europe and
Latin America, due to the increased pace of industrial activity in these
regions. Traditionally, the global Transmission and Distribution (T&D)
markets were concentrated in the regions of North America and Western Europe.
However, in recent years there has been a change in this trend, and the focus
of activities in the global T&D market has shifted to the South-East Asian,
South Asian, Eastern European and Latin American nations. This trend has
developed for two main reasons: first, the low-cost advantage those companies
can derive by shifting some of their operations to these countries; and second,
the growing domestic demand in these emerging economies for increased
industrial and commercial production. To meet the growing demand for power,
countries will require increased investments in electricity infrastructure.
Such growth in the installed capacity will require additional infrastructure
investments for installing new T&D infrastructure, increasing the demand
for transmission towers.
The installation of new T&D infrastructure depends
upon the country’s economic growth. Many developing countries such as India and
China have shown increased economic and population growth rates. To maintain
the economic growth rate and to satisfy the electricity need of the rising
population, the governments of these countries plan to invest in building
energy infrastructure. The growth rate of new installations of T&D
infrastructure has been slow in most developed countries. In these developed countries,
new opportunities are expected to come from upcoming technologies, and the
maintenance and replacement of old T&D infrastructure. This is particularly
the case in North American and European markets, which have traditionally been
the major markets for most T&D equipment manufacturing companies. With the
rise of new and developing economies that are witnessing higher economic growth
rates and lower labor cost, the growth of the T&D markets in developed
countries is slow by comparison, having reached a state of relative maturation.
Emphasis on the commercialization of renewable energy
across the world is expected to drive the growth of grid interconnections,
leading to a growth in demand for transmission towers. Renewable energy
resources are often found in far-off places where a transmission network does
not exist. In the future, the expansion of transmission networks is expected to
enable the transfer of electricity from power plants situated in remote areas
to load centers, which will require the deployment of T&D infrastructure,
including transmission towers.
Many countries are in the process of integrating their
regional grids to form a nationwide grid. The idea is to have a seamless flow
of electricity across the nation. The development of renewable energy has also
given a further boost to grid interconnection. In European countries, work is
in progress to form a single European grid among all European Union nations.
Moreover, as the economies of Asian countries develop further, energy trade between
them is expected to rise. In many countries the transmission networks are not
reliable enough to transfer electricity from the growing number of power
plants. The increased focus on renewable energy and grid interconnections is
expected to increase the installation of T&D lines and thereby drive the
demand for transmission towers.
The installation of T&D equipment including
transmission towers is a basic requirement for every manufacturing unit and
there are no substitutes for it in high-power industrial applications. The
unique capabilities of T&D equipment and infrastructure, used for supplying
power to machines, directly benefits industries, leading to capital spending
and investment. This is one of the few reasons the markets have remained healthy
despite economic problems and downturns in various regions of the world.
In the aftermath of the economic recession of 2008, the
governments of the US and many of the countries in Europe and Asia-Pacific have
committed more federal funds for investment in infrastructure projects such as
new power grids, generation and T&D infrastructure. Many industries have
been supported by federal and state governments through incentives and tax
credits for capital purchases of energy-efficient equipment.
Powering this equipment requires it to be connected to
the T&D network. Therefore, the huge investments committed by these
governments are expected to percolate down, boosting the growth of the
transmission towers market as well.
