Power Grid Market - Global Forecast 2026-2032

The Power Grid Market size was estimated at USD 296.33 billion in 2025 and expected to reach USD 311.10 billion in 2026, at a CAGR of 5.59% to reach USD 433.75 billion by 2032.

The electric power grid undergirds the functioning of modern society, yet much of this critical infrastructure is aging and under pressure from evolving energy demands and environmental challenges. In the United States, over 70 percent of transmission lines and distribution transformers have surpassed 25 years of service, placing them near or beyond their intended life cycles and increasing vulnerability to failure amid extreme weather events and rising load requirements. Compounding these physical stresses, the American Society of Civil Engineers assigned the nation’s energy infrastructure a D+ grade in its 2025 report, noting deepening gaps between grid capability and the demands of decarbonization, digitalization, and resilience needs.

This convergence of factors has led to a growing number of service interruptions and rising customer costs. In 2021, U.S. electricity customers experienced an average of more than seven hours of outage time, with major events such as hurricanes, wildfires, and winter storms accounting for the bulk of that total. Utilities are increasingly requesting rate increases-amounting to nearly $29 billion in proposed hikes for 2025-to fund critical transmission and distribution upgrades and maintain system reliability. However, regulatory delays, supply chain constraints, and financial shortfalls continue to stall many needed modernization projects.

Against this backdrop, federal and state policymakers have begun to mobilize. The Bipartisan Infrastructure Law and subsequent appropriations have earmarked billions for grid resilience, interregional transmission expansion, and advanced technology deployment. Notable examples include a $1.3 billion investment to link New Mexico with Arizona and another line connecting New England with Quebec, while the Department of Energy’s Grid Resilience Innovative Partnership program has allocated $10.5 billion toward smart grid and resilience initiatives. These efforts mark a critical inflection point in the drive to modernize legacy systems and prepare for the demands of the clean energy transition.

The global power grid is undergoing transformative shifts driven by the exponential growth of renewable energy, the proliferation of digital technologies, and an urgent need for resilience against physical and cyber threats. In 2024, wind, solar, and other zero-emission sources accounted for over 92% of new electricity capacity additions worldwide, with investments in renewables and grid infrastructure reaching unprecedented levels. Battery energy storage deployments surged to 69 gigawatts of new capacity in 2024 alone, bringing global installed storage capacity to approximately 150 gigawatts and showcasing the critical role storage will play in balancing variable generation.

Meanwhile, smart grid and digitalization initiatives are gaining momentum as utilities seek to improve operational efficiency, enhance situational awareness, and streamline maintenance. Global investment in electricity grids rose by 15% in 2024, reaching roughly $390 billion, as governments and development agencies prioritized network optimization and interoperability solutions. In the United States, the Department of Energy’s smart grid program has directed billions toward projects that integrate advanced sensors, automation systems, and analytics platforms to support real-time monitoring and adaptive control.

In parallel, the decentralization of energy production via distributed energy resources, microgrids, and prosumer frameworks is reshaping grid dynamics. The United Nations COP29 pledges called for the refurbishment of 25 million kilometers of grid infrastructure and deployment of 1,500 gigawatts of storage by 2030, underscoring the global commitment to grid flexibility and resilience. Advanced cybersecurity measures, artificial intelligence applications, and digital twins are being integrated to pre-empt disruptions, optimize asset performance, and accelerate restoration efforts, marking a new era of data-driven grid management.

In March 2025, the restoration and expansion of Section 232 tariffs on steel and aluminum imports reinstated a 25% duty on all such products, while a June proclamation raised those rates to 50%, effectively eliminating exemptions for key trading partners and encompassing downstream steel derivatives. Concurrently, a 10% baseline tariff on global goods and existing Section 301 measures increased levies on specific energy sector components, including conductors, cables, transformers, switchgear, and other critical infrastructure elements.

The power grid sector is particularly vulnerable to these measures, as the United States imports approximately 80% of its transformers-predominantly from Mexico and China-and relies heavily on imported grain-oriented electrical steel for core manufacturing. Industry analysts project that these tariffs could drive up equipment costs by as much as 1% for wind and solar projects and add an estimated $53 billion annually in tariff expenses across the clean energy supply chain. Prolonged lead times and higher capital expenditures are expected to delay critical grid upgrades, exacerbating reliability challenges and constraining the pace of renewable integration.

The cumulative impact extends to consumer electricity prices, as utilities pass through elevated procurement costs and extended project timelines. With lengthy certification processes and custom specifications hindering diversification of suppliers, utilities face limited flexibility to mitigate these cost pressures. Moreover, the uncertainty surrounding future trade policy and potential retaliatory measures abroad further undermines investor confidence and complicates long-term planning for large-scale transmission and distribution projects.

Component-level insights reveal that cables, conductors, substations, switchgear, and transformers are the primary drivers of grid investment. Within the cables segment, high-performance EPR and XLPE insulation variants are capturing market share for their durability and thermal efficiency, while overhead and underground conductor installations are expanding to meet reliability and aesthetic requirements in urban and rural settings. Distribution and transmission substations are being upgraded with advanced monitoring and protection schemes to accommodate bidirectional power flows and distributed energy resource interconnections. Meanwhile, air-insulated switchgear continues to serve traditional networks, even as gas-insulated solutions gain traction in space-constrained environments. Dry-type and oil-filled transformers are both seeing rapid modernization, with manufacturers adopting novel materials and designs to enhance load-handling capacity and minimize environmental risks.

On the demand side, large commercial facilities and heavy industries are driving the deployment of robust grid infrastructure, while small commercial and light industrial users are increasingly investing in localized automation and energy management systems. Residential applications-both rural and urban-are characterized by growing adoption of smart metering, behind-the-meter storage, and electrification of heating and transportation loads. Transmission and distribution networks exhibit divergent requirements, with high-voltage corridors prioritized for long-distance energy transfer and low-voltage systems tailored for localized distribution resiliency. Ownership patterns reflect a balance between public utilities focused on regulatory compliance and investor-owned entities pursuing efficiency gains, while private microgrid operators and community energy cooperatives are emerging as niche innovators.

Service offerings across maintenance, repair, and upgrade are crucial for sustaining system performance over extended asset lifecycles. New installations and replacement projects are differentiated by their underlying drivers-expansion versus lifecycle management-while applications in grid automation, renewable integration, energy management systems, and smart metering overlap to create multi-layered solution packages. In particular, distribution and transmission automation platforms, along with hydro, solar, and wind integration services, are witnessing heightened demand as stakeholders strive to modernize legacy networks and accommodate unpredictable generation profiles.

In the Americas, the United States leads in large-scale transmission initiatives and digital grid modernization, leveraging $10.5 billion from the Grid Resilience Innovative Partnership and additional funding under the Bipartisan Infrastructure Law. Canada complements these efforts with targeted smart grid grants totaling $100 million, while Latin American markets such as Brazil and Mexico are prioritizing rural electrification and distribution upgrades to support industrial growth and reduce technical losses. The durability of regional utilities is being tested by extreme weather events, prompting heightened investment in resilience and microgrid installations.

Across Europe, the Middle East, and Africa, the European Union’s EUR 584 billion electricity grid action plan commits EUR 170 billion to digitalization and advanced network solutions by 2030, while deployment of grid-forming technologies in the Middle East addresses the integration of vast solar generation zones. African grid operators, supported by multilateral development banks, are pursuing distributed renewable systems to accelerate electrification in underserved areas, although financing and permitting bottlenecks remain significant hurdles; new interconnections with Europe via subsea links aim to optimize regional power flows and enhance security of supply.

In the Asia-Pacific region, China leads with a USD 17 billion transmission investment in the first four months of 2024 and a total grid modernization spend of USD 442 billion through 2025 under its Five-Year Plan. India’s INR 3.03 trillion program for distribution utilities mandates smart meter rollouts and infrastructure reinforcement, while Japan’s YEN 20 trillion fund supports grid connection upgrades and energy efficiency measures. Australia and ASEAN members are also scaling renewable integration projects, emphasizing cross-border interconnections and regulatory reforms to streamline grid expansion and enhance operational flexibility.

Leading companies are capitalizing on rising demand for robust, intelligent grid solutions through strategic investments and partnerships. Siemens Energy, for instance, has showcased its Xcelerator platform and Gridscale X software at major industry events, offering utilities AI-powered digital twins, advanced analytics, and cybersecurity frameworks to optimize performance and prevent disruptions. In Saudi Arabia, Siemens secured a $1.6 billion contract to supply and maintain technology for gas-fired plants totaling 3.6 gigawatts, reinforcing its position in the global thermal generation market while bolstering grid stability.

GE Vernova has emerged as a powerhouse in grid electrification and software solutions. In July 2025, it announced the acquisition of France’s Alteia to bolster its Visual Intelligence offerings, integrating computer vision and operational data for enhanced asset monitoring. Financially, its Q4 2024 results demonstrated robust growth in grid equipment orders-doubling year-over-year-and an improved electrification segment EBITDA margin of 14.6%, underpinned by surging demand from data center and industrial customers. Meanwhile, substantial capital expenditures, such as the planned $50 million expansion of Charleroi and Clearwater manufacturing facilities, are strengthening its domestic supply chain and supporting FLEXINVERTER production for utility-scale solar and storage applications.

ABB has responded proactively to tariff and supply chain challenges by committing $120 million to expand low-voltage equipment production in Tennessee and Mississippi, targeting a goal of over 90% local production for critical portfolio segments. Its data center business-accounting for 15% of electrification orders in 2024-continues to grow at a double-digit rate, driven by demand for energy-efficient power management products. Through acquisitions and organic R&D, ABB is enhancing its power electronics capabilities and cementing partnerships that span decarbonization initiatives and grid resilience projects across multiple continents.

Industry leaders must adopt a multi-faceted approach to navigate the complexity of modern grid challenges. First, prioritizing investments in digital monitoring and predictive analytics can dramatically reduce unplanned outages and maintenance costs. The American Society of Civil Engineers emphasizes the need for streamlined permitting and interagency coordination to accelerate transmission line deployment-recommendations that can be extended to smart grid pilot programs and microgrid permitting frameworks.

Second, supply chain resilience should be strengthened through diversification of component sourcing and targeted domestic manufacturing expansions. Companies like ABB and GE Vernova have demonstrated the benefits of local production investments to mitigate tariff risks and shorten lead times, a strategy that utilities and government agencies can support through incentive programs and strategic partnerships.

Third, fostering public-private collaboration on regulatory reforms, such as permitting harmonization and cost-recovery mechanisms, will catalyze aligned investments in grid modernization. The IEA recommends mandatory long-term planning protocols and priority status for critical grid expansion projects to ensure investor confidence and project continuity. By engaging policymakers early in the planning process and leveraging federal funding streams effectively, project sponsors can reduce approval timelines and secure more predictable returns.

This report synthesizes primary and secondary research to deliver an authoritative analysis of the global power grid market. Primary insights were gathered through structured interviews with senior executives, technical experts, and regulatory authorities, providing firsthand perspectives on project pipelines, technology adoption rates, and strategic priorities. Secondary data sources include publicly available databases from the U.S. Energy Information Administration, International Energy Agency, World Bank, and American Society of Civil Engineers, ensuring robust statistical foundations for infrastructure and investment trends.

Each data point underwent triangulation via multiple sources, including industry white papers, peer-reviewed publications, and company disclosures, to validate accuracy and mitigate biases. Market segmentation was established based on comprehensive component, end user, voltage, ownership, service, installation, and application criteria, aligning with standard frameworks used by leading consulting firms and industry associations. Regional analyses leverage macroeconomic indicators, policy frameworks, and grid asset inventories to contextualize growth drivers and investment barriers across key geographies.

The research methodology incorporates scenario analysis to assess the impact of policy shifts-such as U.S. tariffs and regulatory reforms-under varying market conditions. Sensitivity testing was conducted to evaluate cost implications and project lead-time fluctuations. All findings were subjected to a rigorous quality assurance process, featuring expert peer reviews and executive validation workshops, resulting in a high-confidence outlook for stakeholders seeking to navigate the evolving power grid landscape.

The convergence of aging infrastructure constraints, climate resilience imperatives, and the rapid proliferation of renewable and digital technologies has positioned the power grid at a crossroads. Coordinated investments in transmission expansion, distribution automation, and energy storage are no longer discretionary; they are critical to ensuring reliable, secure, and sustainable power delivery. Governments and utilities must align policy frameworks with long-term grid planning to unlock the full potential of electrification and decarbonization.

Furthermore, the private sector must continue to innovate in grid components, software solutions, and services, leveraging cross-industry collaborations to address supply chain vulnerabilities and accelerate technology deployment. The enhanced role of artificial intelligence, advanced materials, and modular infrastructure will redefine asset performance metrics and project delivery models. Stakeholders that embrace integrated solutions and prioritize resilience will be best positioned to capitalize on emerging opportunities.

Ultimately, the path to a future-proof grid requires a shared vision among policymakers, utilities, technology providers, and investors. By harnessing data-driven insights and adopting flexible investment strategies, industry leaders can drive transformative change that secures energy access, fosters economic growth, and advances global sustainability goals.

To gain unparalleled insights into the dynamic power grid market and secure a competitive edge, reach out directly to Ketan Rohom, Associate Director of Sales & Marketing at 360iResearch. Ketan’s team can provide you with a tailored consultation, answering any questions you may have about report customizations, enterprise licensing, data delivery formats, and value-added services designed to maximize your research investment. Whether you seek executive briefings, deep-dive data tables, or interactive dashboards, Ketan will guide you through the options to ensure you receive the exact intelligence your organization needs. Contact Ketan today to begin your journey towards comprehensive, data-driven strategic planning and accelerated decision-making in the evolving power grid landscape.