The market for HVDC converter station is expected to grow at a CAGR of more than 9.05% during the forecast period of 2020 - 2025. High voltage direct current (HVDC) technology is one of the catalysts driving the transformation of the electricity market. The increasing cross border power transmission activities are expected to pave a way for development of HVDC systems, which in turn, is likely to drive the HVDC converter station market. Also, growth in renewable energy sector is also expected to drive the market during the forecast period as there is a significant rise in renewable energy generation capacity (onshore and offshore), supported by government's objectives. However, the implementation of the distributed and off-grid power systems is reducing the demand for HVDC transmission lines. Therefore, growing demand for these power plants is expected to restrain the market during the forecast period.
- Line commutated converter (LCC) is expected to dominate the market over the forecast period as they store energy inductively along with high power capability and lower station losses.
- Growing number of offshore wind farm projects and supportive government policies are expected to create immense opportunities for the market studied.
- Europe is expected to dominate the market with majority of the demand coming from the countries such as the United Kingdom and Germany.
Key Market Trends
Line Commutated Converter (LCC) to Dominate the Market
- Line commutated converter (LCC) is expected to dominate the HVDC converter station market due to its lower cost and higher reliability compared to voltage source converter (VSC).
- LCC uses thyristor, which converts AC to DC current. Thyristor is a silicon-based power semiconductor device, which is the heart of the converter station. Also, LCC converter for HVDC is also considered as a current-source converter due to the unidirectional flow of current.
- The thyristor technology has provided a big thrust to the demand for LCC HVDC systems on account of better reliability, which is likely to drive the demand for the market studied.
- The technological developments of thyristor have provided an edge for HVDC converter stations to transfer bulk power over long distances. Therefore, LCC technology finds applications in UHVDC projects proposed in major economies for bulk power transport.
- In August 2019, Siemens won a contract for two converter stations for Viking Link, the first high-voltage direct-current (HVDC) link between Great Britain and Denmark. Siemens will deliver a 1,400 MW converter system for DC voltage of ±525 kV (kilovolts) using HVDC Plus technology.
- Therefore, increasing demand for converter stations is expected to promulgate the market for converter stations during the forecast period.
Europe to Dominate the Market
- Europe is expected to dominate the HVDC converter station market due to its increasing power demand and increasing number of offshore wind farms during the forecast period.
- Factors such as early and rapid adoption of advanced technologies and high investment made in the research and development field are expected to boost the market growth for HVDC converter station in Europe.
- The energy transition continues to be an integral part of Germany's energy landscape with ambitious goals to cut CO2 emissions by 80% and increase the share of renewable energy in total energy consumption to 60%, and 80% of electricity generated from renewable sources, by 2050.
- In October 2019, the United Kingdom's first HVDC system eyed for world's biggest offshore wind farm i.e. Norwegian offshore contractor Aibel has won an order valued at over NKR 2.5bn to build two high voltage direct current (HVDC) converter stations for the giant Dogger Bank offshore wind power mega-project being developed in the United Kingdom North Sea by SSE Renewables and Equinor.
- The French government is also supporting the share of renewable energy (especially offshore wind) and has set a target to build approximately 6 GW of offshore wind power by 2020.
- Therefore, based on the above-mentioned factors, Europe is expected to dominate the HVDC converter stations market during the forecast period.
The HVDC converter station market is consolidated. Some of the key companies in the market include ABB Ltd., Siemens AG, Bharat Heavy Electricals Limited, GE Grid Solutions LLC, and XJ Group Corporation.
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