HVDC Transmission Market

Increasing demand for electricity transmission

Electricity is essential for developing an economy and is increasing in demand as nations develop globally. Factors leading to higher demand for electricity include increasing household incomes, electrification of transportation, and growing digitalization globally. According to the International Energy Agency (IEA), the demand for electricity will increase by an average of 2.1% globally per year till 2040.  As per IEA, there was more than 2.4% increase in electricity demand in 2022 itself compared to 2021.

Moreover, to compensate for the rising electricity demands, there is a demand for conversion of existing HVAC corridors with HVDC transmission systems, leading to the drastic expansion of HVDC transmission globally in recent years. This conversion is expected to be the least-cost option in comparison to upgrading the existing HVAC systems. An estimated 50-150% increase in power capacity can be achieved by the converted lines for distances of about 350 kms. All these factors are expected to reflect positively on the HVDC transmission market. To meet this growing demand, governments and utilities are investing in new transmission infrastructure.

This includes building new power lines, upgrading existing lines, and expanding substations.

Additionally, Asia Pacific region is expected to account for the significant growth, with China and India leading the way. These countries are rapidly expanding their economies, and the increasing adoption of electric vehicles is putting a strain on their electricity grids. China's electricity demand is expected to grow by 5% - 8% in 2023, according to the National Energy Administration. Whereas India's electricity demand is also expected to grow by more than 8% in 2023, according to the Central Electricity Authority due to the rising population and the increasing urbanization.

The increasing demand for electricity transmission in China and India is putting a strain on the existing transmission infrastructure. Moreover, to meet the growing demand, both countries are investing in new transmission lines and upgrading existing lines. The Chinese government is planning to invest USD 1 trillion in new transmission lines by 2030. Whereas the Indian government is planning to invest USD 200 billion in new transmission lines by 2025. The increasing demand for electricity transmission is also creating opportunities for new businesses. Companies that specialize in designing, building, and operating transmission infrastructure are seeing strong growth.

Growing demand for VSC technology

Hence, these factors are responsible to increase demand for VSC-HVDC transmission capabilities.

Additionally, VSC technology can be used with cable-based transmission, which is a more environmentally friendly option than overhead transmission lines which directly or indirectly helps to increase transmission capacity of grid as well as to improve power reliability and grid stability. For instance, In July 2023, Powergrid Corporation of India Limited has commissioned India's first VSC-based HVDC system, which will help to improve power reliability and grid stability in the southern region of the country.

In an addition in May 2023, Siemens has commissioned India's first VSC HVDC link which will help to improve power quality in the southern region of the country and will also help to increase the transmission capacity of the grid.

Government policies and incentives play a crucial role in shaping the Global HVDC Transmission Market Industry. Many governments are implementing regulations and financial incentives to promote the adoption of HVDC technology as part of their energy transition strategies. For instance, various countries offer subsidies for renewable energy projects that utilize HVDC systems, thereby encouraging investment in this technology. Such supportive frameworks are likely to accelerate the deployment of HVDC infrastructure, fostering market growth. As a result, the industry is expected to witness substantial advancements, aligning with global sustainability goals.

The Global HVDC Transmission Market Industry is experiencing a surge in demand for renewable energy sources, driven by the global shift towards sustainability. As countries aim to reduce their carbon footprints, investments in wind, solar, and hydroelectric power are increasing. HVDC technology facilitates the efficient transmission of electricity generated from these renewable sources over long distances. For instance, projects like the North Sea Wind Power Hub illustrate how HVDC can connect multiple countries to harness offshore wind energy. This trend is expected to contribute significantly to the market's growth, with projections indicating a market value of 9.52 USD Billion in 2024.

The Global HVDC Transmission Market Industry is benefiting from the growing interconnectivity of power grids across regions. As nations strive for energy security and reliability, the integration of HVDC systems allows for the seamless transfer of electricity between different grids. This interconnectivity not only enhances grid stability but also optimizes resource allocation. For example, the European Union's initiatives to connect national grids through HVDC technology demonstrate the potential for improved energy distribution. Such developments are likely to propel the market, with expectations of reaching 25.7 USD Billion by 2035.

Technological advancements in HVDC systems are a pivotal driver for the Global HVDC Transmission Market Industry. Innovations such as voltage source converters and improved control systems enhance the efficiency and reliability of HVDC transmission. These advancements enable better integration of renewable energy sources and facilitate the transmission of electricity over vast distances with minimal losses. The ongoing research and development in this field suggest that the market will continue to evolve, potentially achieving a compound annual growth rate of 9.46% from 2025 to 2035. This growth trajectory underscores the importance of technological progress in shaping the future of HVDC transmission.

The Global HVDC Transmission Market Industry is significantly influenced by the increasing urbanization and electrification needs across the globe. Rapid urban growth necessitates the expansion of electricity infrastructure to meet rising energy demands. HVDC technology offers a viable solution for transmitting large amounts of electricity efficiently to urban centers, where demand is highest. Countries in Asia, particularly China and India, are investing heavily in HVDC projects to support their burgeoning urban populations. This trend indicates a robust market outlook, as the industry adapts to the challenges posed by urbanization and strives to provide reliable energy solutions.

By region, the global market is segmented into North America, Europe, Asia Pacific, South America and Middle East and Africa. Among these, the Asia Pacific region emerged as the leading and the fastest-growing region with a CAGR of 9.67%. The segment is projected to reach a value of USD 6,910.1 million by the end of the forecast period. The Europe region accounted for the second-largest growing region with a CAGR of 8.45%. The expansion of power infrastructure in this region presents numerous opportunities for participants operating in HVDC transmission market.

China is putting a lot of money into renewable energy and using the most up-to-date UHVDC technology for power transmission.

Moreover, Maharashtra (India), has also announced plans to build a 1GW underground transmission network capable of carrying 100 MW of electricity. The proposed 80 km HVDC transmission line will link Aarey to Kudus in Palghar District. The project will cost one billion dollars and will take three years to complete. Moreover, In February of 2020, GE upgraded the 300 MW, HVDC transmission line between Jeju Island and South Korea, the mainland. These are some HVDC projects which are helping to contribute to the growth of the Asia-Pacific HVDC transmission market.

The HVDC transmission market is characterized by the presence of many regional and local players. The market is highly competitive, with all the players continually competing to gain a larger market share. The need for integrating renewable energy generation such as solar and wind into the electricity grid is increasing and thus there is need for efficient solution for long-distance power transmission with minimal losses and this factor will positively impact the market of HVDC transmission in the estimated timeframe. The vendors compete in terms of cost, product quality, reliability, and aftermarket services.

It is crucial for vendors to provide cost-effective and efficient products to survive and succeed in a competitive market environment.

The growth of the vendors is dependent on market conditions, government support, and industrial development. Thus, the vendors should focus on expanding their presence and improving their services. ABB, Siemens, Hitachi, Mitsubishi Electric Corporation and Nexans are some of the key players operating in the global market. These companies compete in terms of availability, quality, price, and technology. They consider product development as their key strategy in the HVDC Transmission market.

Additionally, the companies are following both organic and inorganic strategies to strengthen their presence in the global market. They are focusing on product development and expansion to diversify their product portfolio and service offerings along with enhancing their customer relationship. Additionally, companies are also adopting various business development strategies that will further help in growing their business.

ABB: ABB Group (ABB) has various segments, including electrification products, robotics & motion, Stationary automation, and power grid segments. The company’s product offering includes control room solutions, drives, PLC automation, robotics, semiconductors, motors & generators, metallurgy products, PAFC & DMFC voltage products, robotics, transformers, and mechanical power transmission. The company used Voltage Source Converter (VSC), High-Voltage Direct Current Transmission (HVDC) power transmission technology, enabling interconnection between systems, with different frequencies implemented by converting alternating current into direct current. HVDC enables a secure and stable interconnection of power networks that operate on different voltages and frequencies.

HVDC also provides instant and precise control of the power flow and can increase the AC grid capacity. ABB also offers HVDC, FACTS, UPS & power conditioning, network management solutions, and smart building solutions. The company offers its products to automotive, construction, food & beverage, oil & gas, buildings & infrastructure, and mining industries through direct Deployments, distributors, wholesalers, and original equipment manufacturers (OEMs). The company operates in 100 countries across the Americas, Europe, Asia, the Middle East, and Africa.

Siemens: Siemens is a global engineering and manufacturing company specializing in electrification, automation, digitalization, innovation, and technology. It provides engineering solutions in automation and control, power, transportation, and medical diagnosis. The company operates transmission systems such as HVDC Classic and HVDC Plus. HVDC PLUS systems assist in meeting challenges such as ensuring reliable power supply in metropolitan areas, improving grid stability, and providing grid access for offshore wind farms. The company offers various products and services in technology, energy, financing, healthcare, industrial automation, mobility, services, software, and consumer products sectors.

It is considered the world’s largest producer of energy-efficient and resource-saving technologies and a leading provider of power generation, transmission systems, and medical diagnostic equipment. Siemens has a global presence with about 200 countries worldwide and operates through 289 production houses, manufacturing facilities, and R&D centers. The company’s business operations are segmented into six major categories: digital industries, smart infrastructure, gas & power, mobility, Siemens Healthineers, and Siemens Gamesa Renewable Energy.

HVDC Transmission Market Industry Developments

May 2021: Schneider Electric launched Edge Software & Digital Services Program to enable its partners to start new revenue streams with remote monitoring and management of their customers’ physical infrastructure. This initiative is anticipated to simplify and boost the speed of the time required for the establishment of managed power service practice.

February 2023: Mitsubishi Electric Corporation announced the acquisition of Swedish-based company named Scibreak AB, which is engaged in the business of direct current circuit breakers (DCCB). This acquisition will help the company to strengthen its business by developing DCCB technologies for HVDC systems.