Middle East High-Voltage Direct Current (HVDC) Transmission Systems Market - Growth, Trends, and Forecasts (2022 - 2027)

The Middle East high-voltage direct current (HVDC) transmission market is expected to register a CAGR of more than 6.9% during the forecast period. COVID-19 adversely affected the Middle east high-voltage direct current (HVDC) transmission market due to strict lockdown. Furthermore, many projects got delayed due to a lack of funding. Factors such as the significant rise in investment and development of renewable energy projects and EV-related infrastructure are expected drivers for the Middle East high-voltage direct current (HVDC) transmission market in the forecast period. However, increased investment in distributed renewable energy generation is expected to hinder the battery cell market in the near future.

Key Highlights

• HVDC Overhead Transmission System was the dominating segment in the Middle East high-voltage direct current (HVDC) transmission market due to the lower investment required in overhead transmission projects.
• Increased focus on the submarine HVDC transmission system to increase the energy trade with nearby regions is expected to provide a significant opportunity for high-voltage current (HVDC) transmission market in the near future.
• Saudi Arabia has dominated the high-voltage current (HVDC) transmission market. The government's supportive policies for developing renewable energy sources are expected to drive the market in the country.

Key Market Trends

HVDC Overhead Transmission System is Expected to Dominate the Market

• High-voltage overhead transmission is a popular means of power transmission in the Middle East. DC supply decreases the cost of long-distance power transmission with overhead lines and cables. Many HVDC systems use overhead transmission lines. In most cases, this is due to very high-power transmissions and long distances, approximately 600 km or more, usually from remote power generating stations.
• Moreover, the high-voltage overhead transmission is much less expensive to build and much quicker to repair than the underground transmission. Thus, the transmission line development companies are investing more in the overhead transmission system.
• For instance, in October 2021, a consortium led by Hitachi ABB Power Grids was awarded a contract by the Saudi Electricity Company and the Egyptian Electricity Transmission Company for the first-ever large-scale HVDC interconnection in the Middle East and North Africa. This project would enable the Kingdom of Saudi Arabia (KSA) and the Arab Republic of Egypt to exchange up to 3000 MWe of electricity, which is expected to generate from renewable energy sources.
• HVDC overhead transmission systems are emerging as the new energy system based on renewable sources is being developed and implemented. Renewable energy systems, such as solar and wind power projects, are often highly volatile and located in remote areas. The ever-evolving HVDC technology is gaining ground in the new energy economy with long-haul overhead transmission lines that can transport power with maximum efficiency and minimal losses.
• Additionlly, the electricity generation in the Middle-East region have been witnessing significant growth in recent years. Eletricity generation grew from 959.1 TWh in 2012 to 1305.6 TWh in 2021.
• Hence, due to various benefits associated with long-distance HVDC power transmission, many overhead HVDC projects are under development, thereby leading to the growth of this market.

Saudi Arabia Dominate the market

• Saudi Arabia is one of the leading countries in the Middle East region in terms of electricity generation. As of 2021, the total electricity generation was around 356.6 terawatt-hours, out of which more than 60% comes from the natural gas-based power generation, 30% from oil and 0.8% from renewables.
• The Saudi power industry is expanding and working hard to meet the nation's rising demand for electricity. The government is pursuing structural power sector changes with the primary goal of privatizing the industry, including decoupling the publicly owned Saudi Electricity Company (SEC). In net-zero emissions, more than USD 340 billion in investments are expected to be made in the electricity sector by 2030.
• The nation oversaw a Gulf Cooperation Council effort to better connect the member states' grids to prepare its grid system for peak power consumption. Additionally, Saudi Arabia uses 380 kV, 60 Hz, for its energy transmission network, while the other five GCC nations use 400 kV, 50 Hz. The best solution was to add an HVDC interconnection based on the asynchronous nature of the interconnected state's electricity.
• The region has been exposed to international electricity trade thanks to this connectivity. Consequently, it is possible to identify the main reason propelling the market for HVDC transmission systems in the nation as the development of the HVDC system for National and Cross Border Grid Interconnections.
• Furthermore, in October 2021, Saudi Arabia is looking to build a 3 GW link worth USD 1.6 billion with Egypt. The project involves a 1500 km DC line and 16 km DC cable. The country is under discussion to build connections with Turkey, Yemen, and other parts of the Middle East.
• Moreover, in October 2021, The Kingdom of Saudi Arabia (KSA) and the Arab Republic of Egypt are expected to be able to exchange up to 3000 MW of electricity for a large-scale HVDC interconnection that will be constructed in the Middle East and North Africa. This electricity will primarily be produced from renewable energy sources in the future. The connection will support power flow in multiple directions between three terminals and will be the first interconnection allowing the exchange of electric power between both countries.
• Thus, the factors above are expected to drive the demand for HVDC transmission systems in the Middle East region over the forecast period.

Competitive Landscape

The Middle East high-voltage direct current (HVDC) transmission systems market is moderately fragmented. Some of the key players in the market include Siemens AG, ABB LTD, General Electric Company, Hitachi Energy Ltd., and Schneider Electric SE.

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