APAC HVDC Transmission Systems Market Analysis

Definition

High voltage direct current (HVDC) transmission of electricity is a form of DC current over long distance through overhead transmission line or submarine cables. HVDC transmission is preferred over HVAC transmission, as it is more cost-effective considering very long distance, losses, and other factors. HVDC is often referred as Power superhighway or Electrical superhighway. Moreover, HVDC has the ability to interconnect networks with fluctuating frequencies and features. HVDC system uses line commutated converter (LCC) and voltage source converter (VSC), in which LCC is a very economical technology based on Thyristor power semiconductors. On the contrary, VSC is relatively new technology in the market and is based on power transistors.

The APAC HVDC transmission systems market is estimated to account for US$ 1,767.8 Mn in 2018 and is projected to exhibit a CAGR of 10.1% during the forecast period (2019–2027).

Market Drivers

1. Higher efficiency and low cost benefits offered by HVDC over other systems is expected to drive growth of the APAC HVDC transmission systems market.

High voltage direct current transmission system leads to lesser transmission losses and are capable of transmitting more amount of energy through the system. Furthermore, HVDC is cost-efficient as it needs fewer transmission lines than HVAC systems, eventually reducing expenditure and land required for installing the system. Therefore, numerous utility companies are shifting to HVDC transmission systems, which in turn, is expected to propel the market growth in the near future.

2. Low negative impact on environment by HVDC transmission system is expected to propel the APAC HVDC transmission systems market growth over the forecast period.

Many companies around the world are focused on environment-friendly products, in order to enhance their market presence. This has led to shift towards HVDC technology, enabling efficient transmission and optimum usage of electricity. Moreover, it can be used an alternative when additional power plants are required and is beneficial in reducing carbon footprint. For instance, in April 2011, China Southern Power Grid Company entered into contract with Siemens AG for transmitting eco-friendly, hydro-electric power to major cities of Guangdong, China.

China dominated the APAC HVDC transmission systems market in 2019, accounting for 36.7% share in terms of value, followed by Japan and India, respectively

Source: Coherent Market Insights Analysis, 2019

Market Restraints

1. High cost required for installation of HVDC transmission system is expected to restrain growth of the APAC HVDC transmission system market over the forecast period.

HVDC transmission system requires installation of various components including smoothing reactors, converters, harmonic filter, etc. This is done in order to absorb or reduce harmonics that are produced during transmission process. For instance, the pie-chart below represents the costs involved in designing, engineering and installation for HVDC transmission systems in 2015, out of which valves, converters and AC filters account fort 19%, 15% and 11% respectively.

2. Lack of trained workforce required engineering and maintenance is expected to hinder APAC HVDC transmission market growth in the near future

HVDC is designed for different regions wherein it should comply specific region’s regulations and requirement. Such regions require specially designed HVDC transmission system where lack of skilled engineers is a major restraining factor. Moreover, its maintenance and monitoring requires skilled personnel. Appointing skilled and qualified engineers require hefty investment, which in turn, is expected to hinder the market growth over the forecast period.      

Market Opportunities (originally not mentioned in qualitative analysis document)

1. Growing rural electrification is expected to pose lucrative growth opportunities for market players

Electrification in rural parts of various emerging economies has increased in the recent past. Moreover, there is increasing demand for reliable power supply with due to rapid urbanization and proactive initiative taken by governments. For instance, in 2015, the Government of India launched ‘Deen Dayal Upadhyaya Gram Jyoti Yojana’ to provide continuous power supply to rural parts of India. 

2. Smart grid revolution is expected to offer excellent growth opportunities for market players in the near future

Smart grid is an electrical grid that facilitates reliable and efficient end-to-end intelligent two-way delivery system though incorporation of renewable energy source and smart transmission and distribution. Smart grid has emerged as cost-effective solution for long-distance power transmission due to its cutting-edge features. This, in turn, is expected offer conducive growth opportunities for market players.

Source: Coherent Market Insights Analysis, 2019

Market Trends

1. Insulated gate bipolar transistors are gaining traction in the market

Insulated gate bipolar transistors (IGBT) are rampantly replacing Thyristor valves. This is owing to faster work rate and relatively less consumption of energy by IGBT as compared to conventional valves. Moreover, HVDC transmission with IGBT can be used to work on VSC technology with pulse width modulation technique. 

2. Use of active DC harmonic filters has emerged as a major trend, in order to reduce harmonics

Growing adoption of active harmonic filters is one of the emerging trends in the market, which aids in decreasing high levels of harmonics without the use of additional circuits as compared to traditional filters. 

Based on the technology, LLC segment of Asia Pacific HVDC transmission system market was valued at US$ 484.29 million market in 2018 and it is expected to grow at a CAGR of 8.4% between 2019 and 2027

APAC HVDC Transmission Market, By Technology, Market Share (2018)

Source: Coherent Market Insights Analysis, 2019

Competitive Section

Key players operating in the APAC HVDC transmission system market are ABB Ltd., Siemens AG, Toshiba Corporation, General Electric Co., Prysmian SpA, Hitachi Ltd., TransGrid Solutions Inc., and ATCO Electric Ltd.

Key Developments

1. Major companies in the market are involved in various growth strategies, in order to enhance the APAC market presence. For instance, in April 2019, ABB, a Switzerland-based electrical equipment supplier, received 600 MW HVDC order to strengthen Japanese power supply. The order was placed through Hitachi-ABB joint venture.
2. Key players in the market are focused on various growth strategies such as winning contract agreement, in order to gain competitive edge in the market. For instance, in April 2019, Siemens AG, a German conglomerate company, was selected by Power Grid Corporation of India (POWERGRID and the Central Transmission Utility of India to upgrade 30-year old HVDC system in Madhya Pradesh, India.