The market for HVDC transmission systems is expected to grow at a CAGR of 9.07% during the forecast period of 2019 - 2024. The increasing demand for cost-effective solutions for long distance power transmission, ease in controlling the active power link, the possibility of bulk power transmission, and low loss in transmission of power (over HVAC) are some of the significant factors that drive the HVDC transmission systems market. However, the growing demand for distributed and remote power plants which provide electricity in rural areas without the need for large transmission & distribution infrastructure is expected to hinder the growth of HVDC transmission systems market in the coming years.
- Submarine HVDC transmission system is expected to account for the largest share in the HVDC transmission systems market by transmission type on account of upcoming development projects driven by the increasing focus on power trading between countries.
- The growing energy demand, as well as the growth of the renewable energy sector in the Middle East & Africa, is expected to create significant opportunities for HVDC transmission systems market in the near future.
- Europe dominated the market across the globe in 2018 as the region witnessed increasing offshore wind farms development in the countries, such as Germany and the United Kingdom.
Key Market Trends
Increasing Demand for Submarine HVDC Transmission System
- The submarine transmission of electricity is gaining importance on account of increasing focus on power trading between countries. The HVDC submarine power transmission system is considered as a key technology for the development of future power transmission networks. It is also the only solution available for the transfer of high power across long subsea distances. For these reasons, HVDC lines are preferred for interconnecting offshore wind plants worldwide.
- In HVDC transmission system, the submarine power cables can be less costly, especially on a long link where the capacitance of the cable requires too much additional charging current.
- Factors such as increasing number of offshore wind farms along with inter-connections between countries through submarine cables are expected to increase the demand for submarine transmission systems over the forecast period.
Europe to Dominate the Market
- The European power generation mix is expected to change considerably in favor of renewables over the next few years, with countries, such as Germany, Spain, Belgium, and France, increasingly moving towards a low-carbon economy. The region also has several policies in place, such as the EU's Renewable energy directive and national renewable energy action plans that support the transition to a low-carbon energy system.
- 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.
- By the end of 2017, a grid connection capacity of 5.7 GW was available for offshore wind projects in the North and Baltic Sea. Moreover, an additional 2.6 GW, either in the pre-construction phase or under construction, is scheduled to be completed by the end of 2019.
- In December 2017, together with the transmission lines already confirmed in offshore network development plans, the Federal Network Agency had confirmed two more connection systems in the North and Baltic Seas by 2030. This is expected to spur the growth of the HVDC transmission systems in Germany over the next decade.
- 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.
- Excess of renewable energy generation capacity in France and Spain is expected to be more easily transmitted between the two countries, following the granting by the European Union of EUR 578 million to build an undersea power cable across the Bay of Biscay. This, in turn, is likely to require HVDC transmission lines to transmit with low transmission losses, to improve supply security, and resource diversification, as well as pave the way for power market integration in southwestern Europe.
- Therefore, the increasing requirement of renewable energy integration is expected to drive the HVDC transmission systems market in the region during the forecast period.
The global HVDC transmission systems market is consolidated with the top 10 companies accounting for almost 70% of the market share. The key players in this market include ABB Ltd, Siemens AG, Toshiba Corporation, and General Electric Co.
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