HVDC Transmission Market To Generate Revenue worth $16.4 Billion by 2030
- Published: December 2023
The HVDC transmission market will grow at a CAGR of 5.5% during 2024–2030, reaching USD 16.4 billion by 2030. This is due to the boom in the usage of the VSC technology, better transmission efficiency of high-voltage direct current systems over high-voltage alternating current systems, swift urbanization and industrialization, expansion of renewable energy capacity, and initiatives by governments to augment electricity access.
Rise in Renewable Energy Production Is Driving Market
Across the world, climate change is being battled by shifting to renewable energy, led by government initiatives at the regional, national, and provincial/state levels. For instance, to prepare the network for a large-scale integration of renewable energy, the IEEE1 European Public Policy Initiative (EPPI) urges European Union policymakers to fully utilize DC transmission. This technology has the potential to improve international energy cooperation, such as among North Sea countries. Moreover, HVDC transmission networks are gaining significance due to the growing need for system interconnection, the usage of long-distance cables, and a strong focus on better energy efficiency.
Moreover, till 2021, only 30% of the Indian Railways network was electrified. During COVID-19, it achieved 37% network electrification, and as per reports, by the end of 2023, it will be totally electrified. This will help the Indian Railways save a lot of money in diesel bills and cut its emissions massively. Therefore, if the targets are met, then from 2024, it will need about 30 billion units of electricity per year, which will present incredible prospects for the producers of renewable energy.
In turn, the demand for the equipment used in overhead power lines, such as conductors, transformers, and insulators, will inevitably rise, thus propelling the market. Further, with additional solar and wind power installations, the number of direct power purchase agreements between electricity producers and the railways will probably increase. This will boost the need or HVDC transmission systems as all utilities produce AC current, and to supply it, it is first converted to DC. Then, it is transferred and, finally, converted back to AC for the railways.
Increasing Number of Offshore HVDC Installations
One of the fastest-growing renewable energy sectors is offshore wind. Europe stands as a leader in offshore wind with the largest operating wind farms. Further, European governments have aimed to deliver up to 160 GW of wind capacity by 2030. The high-voltage direct current technology is necessary for connecting wind farms to grids when they are located far from the shore. The primary factors to be taken into account when deciding between AC and DC to connect offshore wind installations to the grid are distance to shore, rated power, and the distance to the nearest grid connection.
Here, lower cable costs are a key benefit of a DC connection. Cable losses over a particular distance are also smaller than AC systems, because the cables carry a charge only when energized, and the full current-carrying capacity can be employed for power transmission. These elements make up for the greater DC converter expenses.
Additionally, XLPE-insulated HVDC cables are lighter than others, which facilitates their offshore installation and reduces the cost of the process. They may be transported over longer distances because of their lower mass per unit length, which also results in fewer cable joints, quicker installation, and a lower failure risk.
APAC Is Largest Market
APAC generates the highest revenue in market, and it will further grow at a CAGR of 5.8% in the forecast period. With the rising demand for electricity, countries are focusing on expanding their power generation, transmission, and storge capacities. For example, In India, the government installed 7,200 MW of interregional transmission capacity in FY 2021–2022 for a total of 112,250 MW. Further, in China, the HVDC systems are under development for renewable energy to control carbon emissions.
Some of the key players are Hitachi Ltd., Siemens AG, Toshiba Energy Systems & Solutions Corporation, General Electric Company, NR Electric Co. Ltd., Prysmian S.p.A, Mitsubishi Electric Corporation, Nexans S.A., ABB Ltd., and NKT Group of Companies.