Global Transmission & Power Grid Modernization (2025–2040)

Key Findings

• Global transmission and power grid modernization is centered on upgrading high-voltage networks, substations, protection systems, and digital control layers to improve reliability and integrate renewables.

• Grid expansion is increasingly driven by renewable interconnection, electrification of transport and industry, and cross-border power trade requirements.

• HVDC corridors, advanced conductors, and flexible grid technologies are becoming essential for long-distance, high-capacity transfer and congestion relief.

• Digital substations, synchrophasor monitoring, and AI-enabled asset management are accelerating adoption of predictive maintenance and faster fault isolation.

• Aging infrastructure in North America and Europe is driving replacement capex, while Asia-Pacific and the Middle East focus on new-build capacity and resilience.

• Grid resilience is now a top investment theme due to extreme weather, wildfire risk, and growing exposure to cyber threats.

• Permitting, right-of-way constraints, and transformer/switchgear supply bottlenecks are lengthening project cycles in many markets.

• Utilities are shifting from purely capex-led builds to performance-based grid modernization with measurable reliability and loss-reduction outcomes.

• Financing is diversifying through regulated returns, green bonds, multilateral funding, and public–private partnership models for specific assets.

• The market is moving toward “grid-as-a-platform,” where software, analytics, and automation materially influence capacity, reliability, and total cost of ownership.

Global Transmission & Power Grid Modernization Market Size and Forecast

The global transmission & power grid modernization market was valued at USD 110.8 billion in 2024 and is projected to reach USD 178.6 billion by 2031, growing at a CAGR of 7.1%. Growth is supported by large-scale transmission buildouts, substation upgrades, digital control systems, and the need to connect renewable generation located far from load centers.

Utilities are increasing spending on asset replacement, grid hardening, and advanced monitoring to improve reliability and reduce losses. Although the horizon of 2025–2040 implies multi-decade investment, the 2025–2031 period will be defined by accelerated planning-to-execution cycles for critical corridors and modernization programs.

Market Overview

Transmission and power grid modernization includes expansion and reinforcement of high-voltage AC networks, deployment of HVDC lines and converter stations, substation automation, advanced protection and control, and wide-area monitoring systems. The modernization agenda also includes dynamic line rating, flexible AC transmission systems, digital relays, advanced transformers, and cyber-secure SCADA/EMS upgrades.

A key objective is to unlock additional hosting capacity for renewables and electrification without sacrificing reliability. The market spans utilities, system operators, EPC contractors, grid technology OEMs, and specialized software providers, with procurement increasingly tied to lifecycle performance and digital interoperability.

Future Outlook

From 2025 to 2040, grid modernization will increasingly focus on enabling higher renewable penetration, managing bidirectional flows, and improving resilience under climate stress. HVDC backbones and interregional interconnectors will expand to move clean power from resource-rich regions to demand centers.

Substations will become more digital, with automation and analytics enabling faster restoration and reduced outage durations. Utilities will prioritize non-wires alternatives and flexibility solutions where they can defer heavy construction, but major transmission build remains unavoidable. Over time, standardized architectures, modular substations, and digitally enabled maintenance will improve cost efficiency and shorten upgrade cycles.

Global Transmission & Power Grid Modernization Market Trends

HVDC Backbones and Interregional Interconnectors Scaling Up
HVDC is increasingly used for long-distance bulk transfer, offshore wind connections, and cross-border trading where stability and controllability matter. The economics improve when congestion costs and curtailment reduction are included in system planning. Multi-terminal HVDC and hybrid AC/DC architectures are gaining attention as grids become more meshed. Converter station technology and grid-forming capabilities are becoming key differentiators for OEMs. This trend is reshaping long-term transmission masterplans in multiple regions.

Digital Substations, Protection Modernization, and Automation Expansion
Utilities are upgrading to IEC-enabled digital substations with advanced sensors, digital relays, and automated switching logic. Faster fault detection and isolation improves SAIDI/SAIFI outcomes and reduces customer impact during disturbances. Digital protection supports adaptive settings needed for inverter-heavy grids and complex power flow patterns. Automation also reduces manual field work and improves safety, while enabling remote operations. The result is a steady shift from hardware-only upgrades to software-defined operational performance.

Grid Monitoring at Scale Using WAMS, PMUs, and Advanced Analytics
Wide-area monitoring with synchrophasors is expanding to improve visibility and stability management across transmission networks. Dynamic data supports early warning of oscillations, voltage instability, and cascading failure risks. Analytics platforms increasingly integrate asset health, weather, and load forecasting to optimize maintenance and dispatch decisions. This improves utilization of existing assets and defers some reinforcement capex through better operational control. Monitoring is becoming a core layer of modernization rather than an add-on.

Resilience-Driven Upgrades: Hardening, Fire Mitigation, and Undergrounding
Extreme weather and wildfire risk are accelerating investment in stronger structures, covered conductors, improved vegetation management, and selective undergrounding. Substations are being redesigned for flood resilience, higher heat tolerance, and improved redundancy. Utilities are also implementing sectionalizing, reclosers, and protection upgrades to reduce outage footprint. Resilience projects increasingly compete with capacity expansion for capital allocation, reshaping prioritization frameworks. This trend raises demand for climate-adapted engineering and risk-based planning tools.

Flexible Grid Technologies and Capacity Unlocking Without Full Rebuilds
FACTS devices, synchronous condensers, grid-forming controls, and dynamic line rating are being used to increase transfer capacity and stabilize voltage. These tools can reduce curtailment, improve inertia-like response, and manage congestion in high-renewable systems. Utilities are adopting “optimize-first” approaches before committing to new corridors, especially where permitting is slow. Flexibility solutions are also favored for faster deployment and targeted relief. This trend expands the modernization market beyond traditional wires-and-transformers procurement.

Market Growth Drivers

Renewable Integration and Long-Distance Power Transfer Requirements
Wind, solar, and hydro resources are often far from demand centers, requiring new high-voltage corridors and stronger interconnection capacity. Curtailment and congestion costs are pushing system operators to accelerate transmission upgrades. Inverter-heavy generation also increases the need for advanced protection, voltage support, and stability tools. New interconnections and reinforcements are essential for achieving decarbonization targets and maintaining reliability. This driver is a primary determinant of modernization investment through 2031 and beyond.

Electrification of Transport, Heating, and Industry Increasing Peak Loads
EV charging, heat pumps, data centers, and industrial electrification are raising load growth and changing peak demand patterns. Transmission systems must handle higher and more variable flows, often requiring transformer upgrades and network reinforcement. New load clusters create demand for additional substations and interconnection capacity. Grid operators are investing in forecasting and planning tools to manage uncertainty and prevent reliability degradation. Electrification therefore directly expands both capacity and modernization requirements.

Aging Transmission Assets and Reliability Mandates in Mature Markets
Many regions operate legacy lines, transformers, and protection systems approaching end-of-life, increasing failure risk and maintenance cost. Replacement programs are being accelerated where reliability metrics and regulatory scrutiny are tightening. Modern equipment reduces losses and improves operational visibility, supporting better system performance. Asset replacement also creates opportunities to embed digital and resilience features during refurbishment. This driver supports stable, multi-year spending even when new-build corridors face permitting delays.

Grid Resilience and Security Requirements Under Climate and Cyber Risks
Severe storms, floods, heatwaves, and wildfires are increasing outage risk, while cyber threats raise the stakes for grid control system security. Utilities must invest in hardening, redundancy, and cyber-secure architectures to protect critical infrastructure. Regulators and customers increasingly demand faster restoration and stronger contingency planning. These requirements push modernization spending beyond capacity needs into systemic risk reduction. Resilience and security are now key justifications for investment approvals and financing.

Operational Efficiency and Loss Reduction Through Digitalization
Digital substations, advanced sensors, and analytics reduce unplanned outages, optimize maintenance, and improve utilization of existing assets. Automation lowers operating costs by enabling remote control and faster switching during incidents. Better visibility supports congestion management and reduces technical losses in the network. Performance improvements can translate into regulatory incentives and improved customer outcomes. This driver makes modernization economically attractive even in low-demand-growth regions.

Challenges in the Market

Permitting, Right-of-Way, and Community Acceptance Constraints
Transmission lines often face lengthy permitting processes, legal challenges, and public opposition due to land use and visual impact. Right-of-way acquisition can extend timelines and increase cost uncertainty, delaying critical corridors. Environmental assessments and cross-jurisdiction coordination add complexity, especially for interregional projects. Utilities increasingly explore undergrounding or route redesign, but these can raise capex significantly. Permitting remains one of the most material constraints on modernization speed.

Supply Chain Bottlenecks for Transformers, Switchgear, and HV Equipment
Large power transformers, gas-insulated switchgear, and HVDC components have long lead times and specialized manufacturing capacity constraints. Delays in critical equipment can postpone commissioning and increase interest during construction. Commodity price volatility affects conductors, steel, and insulation materials, complicating EPC budgeting. Utilities are responding with framework contracts and multi-sourcing strategies, but constraints persist. Supply chain tightness can limit how fast modernization plans translate into on-ground execution.

Capital Intensity, Cost of Capital Sensitivity, and Rate Recovery Pressure
Transmission modernization requires heavy capex with long payback periods and a strong dependence on regulated cost recovery frameworks. Higher interest rates increase revenue requirements and can trigger political resistance to tariff increases. Utilities must balance affordability with reliability, often prioritizing projects with clear performance outcomes. In emerging markets, financing access and currency risk can raise hurdle rates and reduce project bankability. This challenge increases the importance of structured financing and phased investment planning.

Integration Complexity in Hybrid AC/DC and Inverter-Dominant Grids
As grids add HVDC links, renewables, and storage, protection coordination and stability management become more complex. Inverter-based resources change fault behavior, requiring updated relays, models, and operational procedures. Legacy SCADA and control systems may not easily integrate with modern digital substations and analytics platforms. Misalignment can lead to commissioning delays, reliability events, or underutilized capacity. Technical integration is therefore a growing execution risk in modernization programs.

Cybersecurity and Operational Skill Gaps in Digitized Grid Environments
Digital substations and connected sensors expand the attack surface, requiring stronger cyber governance and continuous monitoring. Utilities need specialized talent in OT security, data engineering, and advanced protection settings. Workforce shortages and training gaps can slow deployment and increase operational risk. Vendors must also align on secure-by-design architectures and patch management practices across long asset lifecycles. Talent and cybersecurity readiness are becoming gating factors for digital modernization success.

Global Transmission & Power Grid Modernization Market Segmentation

By Modernization Focus Area

• Transmission Expansion and New Corridors

• Substation Upgrades and Automation

• Grid Monitoring and Control Systems (SCADA/EMS/WAMS)

• Flexible Grid Technologies (FACTS, DLR, Voltage Support)

• Resilience and Hardening Projects

By Technology Type

• HVAC Transmission Systems

• HVDC Transmission Systems

• Digital Substations and Protection Relays

• Advanced Transformers and Switchgear

• Grid Analytics and Asset Performance Software

By Voltage Level

• High Voltage (HV)

• Extra-High Voltage (EHV)

• Ultra-High Voltage (UHV)

By End User

• Transmission System Operators (TSOs)

• Utilities and Grid Operators

• Independent Power Transmission Developers

• Industrial and Large Load Interconnection Sponsors

By Region

• North America

• Europe

• Asia-Pacific

• Middle East & Africa

• Latin America

Leading Key Players

• Siemens Energy

• Hitachi Energy

• GE Vernova

• ABB Ltd.

• Schneider Electric

• Mitsubishi Electric

• Toshiba Energy Systems

• Prysmian Group

• Nexans

• Eaton

Recent Developments

• Siemens Energy expanded grid technology portfolios aimed at digital substations and HVDC system deployments for large transmission corridors.

• Hitachi Energy advanced HVDC and grid integration solutions supporting offshore wind connections and long-distance power transfer projects.

• GE Vernova strengthened offerings in grid automation, protection systems, and transmission equipment to address modernization demand.

• Prysmian Group increased focus on high-voltage cable systems and turnkey transmission solutions for interconnectors and renewables evacuation.

• Schneider Electric enhanced software and automation capabilities targeting substation digitalization and power system monitoring.

This Market Report Will Answer the Following Questions

• What modernization investments create the highest reliability and capacity uplift per dollar spent between 2025 and 2031?

• How do HVDC corridors compare with HVAC expansions in economics, permitting complexity, and system stability benefits?

• Which digital substation and grid monitoring technologies most improve outage performance and maintenance efficiency?

• How are utilities financing modernization while managing affordability and regulatory rate recovery constraints?

• What are the most binding execution bottlenecks—permitting, equipment lead times, or power system integration—and how are they mitigated?

• Which regions and corridor types offer the strongest long-term modernization opportunity through 2040?

• How will cybersecurity requirements reshape procurement, architecture choices, and operating models for grid modernization programs?