- May 05, 2011
Automation.com, May 2011
By David A. B. Laing, VDC Research Group
VDC Research Group teamed up with Automation.com to conduct a survey on the market for power protection products including the hard wired surge suppressors often used in industrial machines and facilities. This article provides a summary of those survey results.
By David A. B. Laing, VDC Research Group
Usage Drivers within Industrial Machines and Facilities
In 2010, VDC Research Group’s Industrial Automation and Control Practice teamed up with Automation.com and other Industrial Automation partners to conduct a survey on the market for power protection products including the hard wired surge suppressors often used in industrial machines and facilities. This survey was in support of a comprehensive 11 volume report on Uninterruptible Power Supplies (UPS) and Power Line Surge Suppressors of all types. For this Automation.com article, VDC Research will provide its thinking about the market drivers for the types of hard wired surge suppressor products that are often found in industrial control and power panels. The VDC study also addressed some plug-in type surge protection products and a few of these are certainly used in industrial applications but, within this article, we will mainly focus on the hard wired types.
For this power protection study, VDC Research used 2 main strategies to get a 360 degree view of the market. We worked with over 100 suppliers and distributors of power protection products primarily through one- on-one interviews. We also used the aforementioned end user survey. Overall there were approximately 700 survey participants and 200 of those indicated that they had purchase, specification, design in and or end user experience with hard wired power line surge suppressors. You will now see some market insights we gained from this 360 degree market research. This first table shows the demand side purchase history and future estimates that were reported:
Table 1: Purchase History and Projected Demand for Power Line Surge Suppressors
In the last column, we see a very strong future to current ratio for Hard Wired products in the 2011 – 2014 time-frame.
What is this likely growth being driven by? We asked the respondents additional questions that provide some insight. In exhibit 1, we see the categories for these hard wired power line surge suppressor purchases.
Source: VDC Research
Exhibit 1: Hard Wire Surge Suppressor Spending by Category
We found that new facilities and expansion market comprises over half of the projected demand but we also see that users are also concerned with replacements and upgrades with 34.5% of spending in these product categories. At this point, it is worthwhile to take a quick look at the survey respondent markets. For this view, we looked at all respondents with a business role as the consumers are unlikely to purchase hard wired surge products. The Industrial Manufacturing segment is strongly represented which no doubt is influenced by the Automation.com readers taking the survey.
Source: VDC Research
Exhibit 2: Primary Business Related markets for Hard Wired Power Line Surge Suppressors
In this section, we will take a look at the Americas demand for hard wire power line surge suppressors and how that correlates with the overall strategy of deployment in industrial facilities and equipment. Our description of each product is intended to be only at a high level but, at the same time, give some insight into the market drivers for using them. Exhibit 3 shows the VDC estimate for the present level of supplier revenues and our estimate of the near future.
Source: VDC Research
Exhibit 3: VDC Estimate of Americas Market for Hard Wired Power Line Surge Suppressors By Category
Main Service Entrance (MSE): The protection of industrial facility power circuits typically start with Main Service Entrance surge suppressor. These, as the name suggests, are located at the main power entrance panel of the building or facility. These units are an integral part of total building lightning protection but also other types of power surges that come in from the power grid. VDC feels that the quality of grid power with respect to surges is likely to decrease as deferred spending on infrastructure and the variability of production from solar and wind sources all will contribute to anomalies. In many countries including the US and Canada, the stable base of power production comes from nuclear plants. Conventional natural gas, oil, or coal fueled power plants are then used to handle additional needs for the local grid beyond what the nuclear plants can provide. The seasonal / daily / and minute to minute variations are met by the conventional plant types that can be scaled up and down quickly. If nuclear plants are decommissioned and not replaced, which is increasingly likely given the events at Fukushima-daiichi, there will have to be more conventional plants filling that “base” role, and there will likely be more switching type of events. Even before this, surge suppliers have also called out the “Smart Grid” as being the source of more switching event surges. All of these things will likely increase the need for power line surge suppressors especially MSE.
MSE devices are often required by local regulations and/or insurance company requirements. In the USA, suppliers have noted that Master Lightning (ML) certificates are now calling for MSEs to have the recently enacted 3rd edition of UL1449 with the product having been certified directly by UL. These ML certificates expire every 5 years and, as they do, this is likely driving demand for replacement units. Regardless of this, having a good MSE surge suppressor is a good baseline strategy. VDC estimates that the suppliers of MSE products to the Americas market are seeing ~$110M in revenues and it will likely grow at ~8% CAGR for the next few years.
Sub Panel (SP): Any building and facility that has a lot of motors and high power equipment will be likely creating power surges on their internal power wiring. For this reason, it is very good practice to have surge suppressors on all of the power panels for individual floors, areas and groups of equipment. Although similar in type and design to MSE surge protectors, the SP are obviously smaller and do not need quite as much ability to absorb surges.
Critical Load Protection (CLP): These are usually sold to OEMs and are designed into industrial, medical, and other systems as well as IT equipment such as servers and routers. This ensures equipment reliability in the face of uncertain power quality in the places where they are installed. This is generally good design practice as high speed networking, computer processing, and instrumentation semiconductor chips used throughout these types of products can be susceptible to disruption and even outright damage from surge events. In some cases, the power surges emanate from inside the equipment especially industrial and large medical equipment. VDC estimates that supplier revenues for this product are in the $50M range but unit volumes are likely higher as they are very small devices that only protect a single line and have to be grouped to cover all phases. This of course does not include the non power line surge suppressors that would often be used inside equipment but they were outside the scope of the VDC report.
Receptacle: There is one additional type of hard wired surge suppressor product and that is the Receptacle type unit that is essentially a wall plug with the surge suppressor integrated inside. VDC estimated that this market is very small in size and is not that relevant to either the business, industrial, or consumer markets as other surge protection products including plug-in units usually fill that role.
Other (Non Hard Wired): The VDC study did include coverage for categories for plug-in surge suppression and, of these, the line cord and sometimes power control center units can be deployed in industrial rack mounted equipment arrays particularly if the components used in the system are off the shelf plug in. In the report, VDC estimated that the Americas market for industrial grade line-cord surge suppressors to be ~$63M of supplier revenues in 2010. Not all of these would find their way into industrial equipment but, many of them will.
As we close this article, we look toward the significant suppliers (by revenue) for these hard wired surge suppressors and we estimated that the top 10 suppliers to the Americas were (listed alphabetically):
1. Advanced Protection Technology
2. Cooper (et al)
3. Eaton Corporation
4. Emerson Network Power
5. Leviton Inc.
6. Protection Technology Group (LEA, Transtector, Dowin)
7. Raycap (Incl. AC Data)
8. Schneider Electric (including EFI)
9. Surge Suppression Inc.
10. Thomas & Betts Power Solutions
In summary, VDC estimates that the needs for power line surge suppressors are trending toward multi-tiered coverage as well as being more extensive as the equipment being protected increases in complexity and circuit density. Manufacturers of equipment are always trying to reduce costs but will likely not cut spending with respect to power protection. At the same time, the power grids in many areas are under challenge from constantly increasing demand while simultaneously experiencing the variable effects of “renewable energy initiatives”.
Using a multi tiered power protection approach generally assures better equipment reliability and, as a result, less service and downtime costs. The insights provided by your participation in the VDC power protection market study make it possible for suppliers including many of the above to create new products that meet your needs. On behalf of VDC and our customers, the Industrial Automation and Control Practice want to thank the Automation.com subscribers for their participation and support.
ABOUT THE AUTHOR
David A. B. Laing, Senior Analyst/Program Manager – Industrial Automation and Control Practice, can be reached at VDC Research Group, Natick, MA; 508-653-9000, x-146, firstname.lastname@example.org.
VDC Research Group (VDC) is a technology market research and strategy consulting firm that advises clients in a number of technology markets including: Industrial Automation and Control. Using rigorous primary research and analysis techniques, the firm helps its clients identify, plan for and capitalize on current and emerging market opportunities. Our products and services consist of research reports, annual research programs and custom research and consulting services. Founded in 1971, the firm is located in the Boston area.
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