Dan Rafter 2016-07-18 16:42:56
Switchgear systems play an important role for the Wabash Valley Power Association. Tom Fresher, senior operations engineer, says that the association relies on switchgear at all 15 of the landfill gas-to-energy (LFGTE) plants that the Indianapolis-based generation and transmission cooperative runs in Indiana and Illinois. The switchgear protect the association’s power equipment when faults or weather emergencies threaten to shut it down. It also allows the association to cut off the power to specific components, so that maintenance personnel can test or service this equipment safely. “Switchgear systems do provide us that extra protection we need,” says Fresher. “Switchgear can sense faults on the utility lines. If there is any kind of fault, that breaker opens up and protects our equipment. It’s a safety valve for us.” The Wabash Valley Power Association isn’t alone when it comes to relying on switchgear to protect their distribution systems from faults. Late last year, ABB, a manufacturer of switchgear, landed an order of about $40 million from Public Service Electric & Gas, the largest utility in New Jersey. The contract called for ABB to supply gas-insulated switchgear systems to a pair of substations operated by the utility. According to ABB, the Hillsdale substation in Bergen County, NJ, is a 50-year-old facility that has long relied on older air-insulated switchgear. The new gas-insulated equipment will provide additional protection to the substation’s infrastructure while preventing power outages during severe weather, according to ABB. The Jackson Road substation in Passaic County, NJ, is also switching from air-insulated switchgear to gas-insulated equipment. This will allow the substation to increase its power capacity without having to also increase the facility’s physical footprint. Giandomenico Rivetti, head of ABB’s high-voltage business, says that the utility’s switch to gas-insulated switchgear will “strengthen the state’s transmission network and help deliver reliable power to the people of New Jersey.” The increasing number of utilities and businesses that are investing in newer switchgear systems should not be a surprise. Switchgear play a key role for public utilities and businesses that need an uninterrupted power supply. Data centers, hospitals, and financial institutions can never afford to lose power. A fault could cost lives or expose the sensitive financial data of thousands of customers. As more businesses fall into the category of companies that can’t ever afford to be without power, the switchgear market is growing rapidly across the globe. Switchgear prevent overloads at a facility. They also allow facilities to de-energize specific pieces of equipment. Workers can then safely perform maintenance on or test this equipment, increasing the odds that this equipment will perform properly when needed. New Entrants Those who need evidence that the switchgear industry is on the rise need only look at the actions being taken by genset manufacturers. Today, these manufacturers are increasingly entering the switchgear market, developing and selling their own switchgear products. This is a change: in the past, genset companies mostly left this market to manufacturers that specialized in this equipment. Now that genset providers recognize the growth in the switchgear industry, they are boosting their efforts to gain a foothold in this lucrative market. “It used to be, utilities and businesses would buy their generators from Brand X, and then their switchgear from another company,” says Keith Lozeau, vice president of sales with Enercon Engineering. “Now some genset companies are building their own switchgear. They are gaining some traction in the market. That trend will only continue. People really do want that one source of supply today.” This doesn’t mean that there still isn’t a big slice of the market for traditional switchgear manufacturers, those companies that focus on switchgear and that don’t also provide products such as gensets. Lozeau says there will always be businesses and utilities that prefer buying from companies that specialize in switchgear. These manufacturers can create customized switchgear designed to meet the power-distribution needs of specific companies, Lozeau says. That appeals to companies that need to provide a top-level of protection to their equipment. “There are companies that want to build switchgear that is specific to their needs,” he says. “The bigger companies that produce a lot of different products won’t necessarily do that. That is where the third-party companies hold good space in the market. They are the better fit for customers who want a switchgear set tailored to their company’s specific needs.” The good news for data centers, banks, hospitals, and utilities? As the switchgear market grows—and as new providers enter this space—customers have more options available to them. At the same time, manufacturers in this space are always fine-tuning their products. New switchgear systems, for instance, are easier to install today. They cost less money to operate and to maintain, a positive for utilities and businesses looking to boost their bottom lines in a national economy that is still shaky. And as the technology behind switchgear continues to improve, the number of businesses that need the systems to protect their equipment and prevent electrical failures is also on the rise. Consider this the right recipe to inspire future growth in an already strong industry. A Growing Market The recently released Markets and Markets report, Switchgear Market by Type and by Application—Global Trends and Forecasts to 2019 (http://bit.ly/1MuJiEw), provides proof that the switchgear market continues to grow across the globe. According to the report, the global switchgear market is expected to increase from an estimated $74.77 billion in 2014 to $136.71 billion by 2019. In making this prediction, researchers studied the market’s top companies to track their key developments and business strategies. According to the report, the Asia Pacific region has become the most lucrative part of the world for the switchgear industry. And this is driven largely by the large number of upgrades, to the power distribution systems in Southeast Asia. Several companies are benefitting from this boom, in Asia and across the globe. The report identified such companies as ABB, Eaton Corporation, GE, and Siemens AG as the top switchgear manufacturers in the market today, and ones that should see their switchgear business continue to thrive in the next three years. Jacob Joseph, a switchgear development engineer at Toshiba International Corporation isn’t surprised at these predictions. He says that a wide variety of customers are investing in switchgear technology today to protect their facilities and their workers. Joseph points to the oil and gas industry as an example. Companies in this space have long relied on switchgear to keep their equipment running and to depower equipment that they need to test. “It is hard to fathom just how much power these companies require to dredge down deep into the oceans and mountains,” says Joseph. “There is a need for a lot of power there, and the companies in this space need a certain level of protection because of this. If there is a failure anywhere in their distribution system, they can protect the rest of their equipment or their employees with switchgear.” Joseph has a simple explanation for why switchgear remain so important to so many users today: everything in the electrical world cascades down to certain points. If there’s a failure on one side of a distribution system it can shut down power to a point clear on the other side. So users—everyone from utilities to oil companies to data centers—need protection throughout their entire systems. Switchgear technology provides that protection from faults and interruptions, Joseph says. “The goal is to separate the failure from the other transfer points in a system,” says Joseph. “That’s what switchgear systems do.” Alain Mercier, US energy vice president with Schneider Electric, says that the switchgear market will continue to grow because switchgear remain an essential part of the electrical distribution package. “Energy needs are growing around the world,” he states. “Because of that, you will see more end users investing in switchgear. The need is here. It is a must. The world is getting more electrical and connected. That’s just the way the trend is going.” Another market report, Global Switchgear Market 2015–2019 ( http://bit.ly/1RUCjoB ), also forecasts busy times for switchgear companies. According to this report, a growing number of both utility and non-utility power generators are replacing old equipment, including switchgear, and upgrading to more reliable and efficient models. These upgrades are causing a shift in the switchgear market, according to the report. Researchers found that users are steadily moving from conventional switchgear to more innovative modular switchgear equipment. The reason? It’s far easier to install modular switchgear. As the report says, conventional air-insulated switchgear products include such components as circuit breakers, transformers, and disconnectors. These pieces need their own individual insulation spaces. This makes installing these traditional switchgear systems more of a complex task. But modular switchgear systems are more flexible. They aren’t as large, and can fit into smaller spaces. This makes them easier and less expensive to install. As more data centers and financial institutions with limited space order switchgears, we can expect this end of the business to increase. A Diverse Market Lozeau from Enercon says that the majority of his company’s switchgear business—about 75% of it—comes from three big sectors: health care, data centers, and financial institutions. And in this market, it is the data center end of the business that is growing at the fastest rate. “Number one right now is data centers,” says Lozeau. “Data centers are our number-one market opportunity. There are just so many data centers across the country right now. They are the largest consumers of this type of equipment today. Then you have health care and some commercial-type industrial applications coming in behind them.” Lozeau says that demand for switchgear systems remains solid, though he would not call this demand booming. “Has the demand increased? I would say that it has been relatively flat for the last several years. That’s not to say that the market has been in an unfavorable position these last few years. This is still a very good market. But I wouldn’t say that the industry has seen great growth recently. It really hasn’t changed that much in the last five years or so.” What has changed, though, is the growth in cloud computing during this same period, he says. The data center industry was once dominated by colocation facilities. Today, data centers are focused more on cloud computing. Lozeau asserts that big tech companies such as Apple, Google, and Facebook continue to build their own data center spaces for cloud computing. These companies are turning to switchgear companies to protect their equipment from faults and to prevent electrical failures. “That is something that has significantly changed in the market,” he explains. “The individual customers that we serve are changing. It is the same application from our point of view, but the names on the buildings are different. The colocation companies have not gone away. But the bigger names in technology are increasingly entering this space and relying on switchgear.” Joseph says that he is seeing the same trend. A growing number of data centers and cloud companies are investing in switchgear technology to protect the data they are storing. And this is a segment of the industry that Joseph says will only continue to grow. “Every bit of information that is stored in these centers needs some level of protection,” he says. “The more information that is put out there, the more businesses that turn to data centers to store their information, the greater the demand we’ll see for switchgear installations.” Joseph points to the amount of cooling that the servers in data centers need. Air conditioning draws a significant amount of power. These air-conditioners can’t shut down. If they do, the servers storing all that data could overheat and shut down, too. That could be disastrous for both data centers and the clients they serve. Switchgear technology is becoming increasingly important, too, for businesses that are facing pressure to go green, Joseph says. Energy providers, for instance, are being encouraged to invest more in renewable energy sources such as solar and wind power. The new solar power facilities popping up across the country need protection from faults too, Joseph says. That protection will usually come from switchgear, meaning that another potentially lucrative market will be turning more frequently to these systems in the coming years. Asking the Right Questions Facility owners or managers who have decided to invest in switchgear technology face a big task: they have to order the right equipment for their facilities so that they end up with switchgear systems that are both reliable and effective in containing faults and protecting their equipment. Joseph says that the first decision end users need to make is to determine if it makes more financial sense to continue to repair and maintain older switchgear systems or if purchasing newer equipment that costs less to maintain and operate each year is the sounder move. “Typically when users are considering buying a new switchgear system, they already have some equipment that is a bit outdated,” he says. “Then it comes down to the annual costs they are paying for service and maintenance versus the price of getting a new system and starting over. That is the number-one question that users face.” If users do determine that it makes more sense to invest in new switchgear, they then face a new set of questions. First, they’ll need to decide if a standard switchgear system will serve their facility or if they’d prefer to invest in a customized system designed specifically for their building. Lozeau says that the decision to go with customized or standard switchgear is up to a facility’s owners and its engineering staff. “It depends on their comfort level,” he says. “With the traditional switchgear companies, the product support tends to be better. It’s not because the engine folks don’t have good product support people, but switchgear equipment is our core competency. We do a bit better with customer service because of that.” Mercier says that users need to look at their usage before investing in any piece of switchgear equipment. Some end users work in easier environments, he explains. For instance, a commercial building where there won’t be many faults won’t be as difficult on switchgear systems as will a manufacturing facility with high levels of dirt, dust, or grime. Other end users need power at all times. They can’t afford to lose power for even seconds. These users should make sure that they are investing in switchgear systems guaranteed to run effectively at all times, he says. “The level of availability that you need will influence the type of switchgear that you need,” says Mercier. “Do you need energy 24 hours a day? If you do, you’ll want the most reliable switchgear that you can find, and the highest-rated.” Then there’s safety. “Are we going to have people operating the switchgear very often or it will stay very quiet? That matters when you’re investing in switchgear equipment,” says Mercier. “The safety protection users need depends on the power situation and the type of voltage they are going to use.” Users need to consider their future goals, too. Do they want the most modern switchgear equipment possible? That will change their decision-making. Mercier, for instance, points to vacuum-insulated switchgear systems. These modern systems require little maintenance, often virtually none. That can help end users save money over the lifespan of this equipment, he adds. “A growing number of companies, because of the economy, can no longer afford to keep maintenance staffers at their facilities 24/7, seven days a week,” says Mercier. “Newer, modern switchgear equipment doesn’t require the same kind of maintenance. You can basically install it and let it go. For users that can’t invest as much into maintenance staff as they’d like, these systems might be a better choice.” Facility managers and owners need to look, too, at the service contracts that come with their switchgear equipment. Lozeau says that Enercon has begun selling maintenance contracts to their switchgear customers. When switchgear equipment needs servicing, then, these customers will know exactly who to call. That often isn’t the case at data centers, hospitals, and other facilities, Lozeau says. Many facility managers have no idea of who they need to contact to perform preventative maintenance on their switchgear. “We’ll ask a lot of our customers who maintains their switchgear and we’ll get a blank look,” says Lozeau. “Eventually, they’ll say that nobody does it.” Joseph says that speed matters today, too, with many facility managers focused on how fast they can get specific equipment to their sites. “We often hear the question, ‘How quickly can you get it to me?’” he says. “Sometimes that is an important factor. It comes down to how much users are willing to pay to get it quicker.” Most owners and managers who are spearheading a switchgear upgrade will replace their existing equipment with components that are similar to what they’ve already used, Joseph says. This makes sense: The learning curve for new equipment that doesn’t differ much from older systems is not as steep. But there are times when site owners and managers will invest in switchgear that is more efficient and reliable. For instance, facilities that were protected by air-insulated switchgear might make the move to gas-insulated switchgear when they upgrade, Joseph says. Those that have relied on gas-insulated switchgear might invest in vacuum-insulated equipment instead. “For a long time, air-insulated switchgear were the main type that users would turn to,” says Joseph. “Now users are looking at different technology, like gas-insulated and vacuum breakers. You have some companies who are merging and using the best of these technologies. The technology still has to be tested and improved upon. It has to be approved by the end users, really. They are the ones who approve it by saying, ‘Yes. We want it and we will pay for it.’” BE Dan Rafter is a technical writer and frequent contributor.
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