Utilities have a growing interest in smart grid investments that reach beyond meter reading and extend to automation technologies that actively monitor transmission and distribution (T&D) grids and take autonomous action to improve reliability and efficiency. Supervisory control and data acquisition (SCADA) devices, which operate at substations and individual distribution feeders, are key elements of this shift. According to a recent report from Pike Research, a part of Navigant’s Energy Practice, revenue from T&D SCADA devices will grow from $913 million in 2012 to more than $1.5 billion in 2020.

“SCADA devices perform a wide range of data collection, sharing, and coordinated control actions that make grids more efficient and reliable,” says senior research analyst Bob Lockhart. “As the global utility market emerges from pilot deployments into large-scale smart grid implementations, those vendors that solve those problems, while also enabling utilities to meet tougher sustainability mandates, will be in an enviable position.”

Providers of SCADA systems are making research and development investment choices today that will likely determine which vendors emerge as tomorrow’s leaders in smart grid automation. While vendors are working hard to address the needs of utilities, a gap is emerging between vendors’ understanding of the market and utilities’ perceptions of their needs, according to the report. Utilities are focused on basic outage reduction and reliability improvements, while vendors are reaching toward more advanced capabilities associated with distribution optimization.