18 July 2012 – Demands to incorporate renewable power sources into the transmission network will drive the switchgear industry, while efforts to reduce power transmission losses and connect the increasingly electrified world continue, says technology expert GlobalData in one of its reports.
Its report on the topic says that expansion and upgrades within the global transmission network will drive the high voltage switchgear market in the coming years, as rising population levels and industrialisation encourage the global electricity demand to grow. This necessitates growth in the installed power generation capacity, and the upgrade of supporting transmission infrastructure.
China and the US are the two leading high voltage switchgear markets in the world, holding respective shares of 20.5% and 6.3% in 2011. During the 2012 to 2020 period, the high voltage switchgear markets in China and the US are predicted to reach over US$13,374 million and US$5,421 million respectively.
The main driver for the growing high voltage switchgear market in China will be the new build market, as the Chinese Electricity Council’s investment plan has allocated around US$390 billion to be spent on grid construction by 2015. Several generation and transmission projects are already under construction, and many more will enter the pipeline in the immediate future.
In the US, growth is expected to be driven by increased investment in transmission and distribution infrastructure and replacements, and the Edison Electric Institute (EEI) states that electric utilities will continue increasing their transmission investments from approximately US$12.6 billion in 2011 to US$13.5 billion in 2014.
However, both China and the US will have to make way for a third switchgear superpower, as Russia is also expected to boast a booming market in the next few years. The cumulative market value contribution of these three countries is expected to amount to more than 35% by 2020. The high voltage switchgear market in Russia is expected to be driven by a need to upgrade the existing power transmission network and lay new power transmission lines. The country has big investment plans for the modernisation of the existing transmission network, and under the revised investment plan for 2010-2014, the Federal Grid Company (FGC) plans to invest US$21.3 billion on grid infrastructure upgrades and new power transmission lines.
In 2010, the total high voltage switchgear market stood at US$5,095 million, and it is expected to reach US$7,332 million in 2015. It is expected that it will surpass US$10,000 million in 2020, growing at a compound annual growth rate (CAGR) of 7.8% between 2010 and 2020.