EXCITATION SYSTEMS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Market Size and Trends

The excitation systems market is estimated to be valued at USD 3.24 billion in 2024 and is expected to reach USD 4.28 billion by 2031, growing at a compound annual growth rate (CAGR) of 4.1% from 2024 to 2031.

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The excitation systems market is expected to witness significant growth over the forecast period. The rising demand for reliable power supply and increasing investments towards the modernization of existing power grids are some key factors driving the adoption of excitation systems. Additionally, the growing emphasis on the integration of renewable energy is also augmenting the demand for excitation systems that help stabilize power grids with intermittent power sources.

Excitation System Efficiency

Newer digital static excitation systems provide advanced field forcing capabilities which allows generators to operate closer to their maximum continuous rating. This improves generator capabilities without requiring additional capital expenditure on the generating unit itself. Static systems also facilitate load-dependent voltage regulation and transient stability support which boosts overall plant efficiency. Technologies such as brushless exciters and fully controlled silicon diodes further enhance the power transfer efficiency from the auxiliary power source to the generator field. Overall efficiency gains from state-of-the-art static excitation systems range from 1% to 3% depending on the generator size and loading conditions.

For utilities with hundreds of generators in their fleet, such small efficiency improvements can translate into massive savings. Not only in terms of reduced fuel costs but also decreased maintenance needs and extended component life. The latest static systems also enable the integration of condition monitoring features to optimize scheduled outages and spare parts inventory. Utilities are finding that the returns from investing in excitation system upgrades substantially outweigh their costs, especially considering the assets are expected to operate for decades. This is a key factor driving end users to continually upgrade to newer and more advanced excitation control technologies.

For instance, in November 2020, ABB won a contract to provide excitation systems and speed regulation for four generator units at the Governador José Richa hydropower plant on the Iguazu River. The solution helped Copel (Companhia Paranaense de Energia) enhance the visibility of its operational data using predictive diagnostics.

Market Concentration and Competitive Landscape

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The increasing presence of intermittent renewable energy sources like solar and wind is presenting new operational challenges for conventional generators and grid operators. The variable and sometimes erratic power output from renewables needs to be balanced instantaneously with alterable "dispatchable" resources to ensure grid stability at all times. Here excitation systems play a crucial role in providing critical frequency and voltage support to compensate for renewable power fluctuations.

Utility-scale solar and wind farms are already a major part of the energy mix in many regions worldwide. Moreover, the individual and cumulative impact of distributed rooftop solar installations on low voltage distribution grids is also rising substantially. Maintaining grid code compliance and power quality norms under these dynamic conditions requires generators to rapidly adjust their reactive power and terminal voltage capabilities.

For instance, in March 2020, Nidec Leroy-Somer electric motors manufacturer, launched TAL 0473. TAL 0473 delivers a nominal power between 400 kVA and 660 kVA at 50 Hz (from 495 kVA to 825 kVA at 60 Hz). The alternator features a SHUNT excitation system and an R150 regulator as standard.

Key Takeaways of Analyst:

The excitation systems market is poised to grow substantially in the coming years. The rising investments in upgrading aging power grids across regions will drive more demand for excitation systems. Additionally, the increasing installation of renewable power plants connected to grids is expected to create opportunities for excitation system providers. However, volatility in raw material prices remains a concern for manufacturers.

North America currently dominates the market and is expected to continue its lead, supported by grid modernization programs in the U.S. and replacement of existing systems. Europe is also a major region riding on investments to achieve climate change targets. Meanwhile, the Asia Pacific region is projected to witness the fastest growth fueled by the growing energy needs of China, India as well as ASEAN countries.

On the technology front, static excitation systems have significantly outpaced brushless and brush-type systems due to their reliability and efficiency. Their maintenance-friendly design has further boosted installations at utility-scale generation and distribution levels. At the same time, synchronous condenser excitation systems are gaining traction to regulate voltage for unstable grids plagued by intermittent renewable power sources.

While original equipment manufacturers aim to consolidate their position, component suppliers must explore partnerships and mergers to gain access to newer geographies and applications. Overall, the rising decentralization of power generation portfolios is opening promising opportunities for suppliers to engineer customized decentralized excitation solutions.

Market Challenge: Rising Costs, Technological Obsolescence, and Evolving Demands

Manufacturers must contend with rising costs of raw materials amidst global supply chain issues. Customers are increasingly seeking more efficient and eco-friendly solutions as well. Technological changes also pose a challenge as older systems become obsolete. Striking a balance between price and performance can be difficult. Additionally, demand fluctuates across application areas like automotive, marine, and renewable energy. Further challenges stem from evolving electric grid infrastructure and intermittent renewable energy sources.

Market Opportunity: Transition to Cleaner Energy Driving Demand for Excitation Systems

The ongoing transition towards cleaner energy means increased demand for excitation systems that support the integration of renewable energy. Growth in electric vehicles and investment in smarter grid networks will spur opportunity. Advancements in power electronics, IoT, and digital controls allow for more innovative product designs. Partnerships across industries can help address new application requirements. Rising investments in rail and marine transport infrastructure also shows the opportunity for the market to grow further.

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In terms of type, static excitation systems is expected to contribute the highest share of 69.1% in 2024, due to various technological advantages over rotational systems. Static excitation systems utilize semiconductor devices like thyristors and transistors to provide DC excitation current to generators, offering more precise voltage regulation compared to rotating exciters. This makes static excitation well-suited for applications requiring grid interconnection and power system stabilization.

Static excitation also provides simpler, more compact, and lighter design compared to older rotating exciters which require brushes, slip rings, and rotating diodes. The lack of moving parts in static systems eliminates wear and tear issues, improving reliability. Additionally, static excitation responds much faster to voltage variations than rotary systems. This quick response time allows static systems to effectively support grid frequency and makes them an essential technology for integrating renewable energy sources like solar and wind.

Technological enhancements continue to broaden the capabilities of static excitation systems. Advancements in power electronics have increased conversion efficiencies while reducing size and costs. The use of insulated gate bipolar transistors (IGBTs) and gate turn-off thyristors (GTOs) in place of conventional thyristors provides faster response and lower power losses. Furthermore, the adoption of fully controlled devices like IGBTs has enabled advanced voltage regulation functions through independent control of field current. Modern static excitation systems also leverage digital signal processing for improved closed loop controls.

The growing role of distributed energy resources is a key driver for static systems. Their fast response, small size, flexible controls, and reduced emissions make them well-suited to support the intermittency of renewable sources in microgrids and distributed generation applications. Government incentives and regulatory mandates for cleaner power generation are also fuelling investments in static excitation technology. With continuous technology refinement expanding their capabilities, static excitation systems will likely hold the dominant share in the excitation systems market.

By Controller Type - Digital Controllers Drive Innovation in Excitation Systems

In terms of controller type, digital controllers is expected to account for 74.7% of the market share in 2024, due to superior performance enabled by digital technology advancements. Digital excitation provides faster, more flexible control compared to analog mechanisms. Digital voltage regulators process excitation signals through microprocessors rather than conventional electronic components. This allows more sophisticated closed-loop voltage regulation algorithms that are software-defined rather than hardware-limited.

Digital controllers offer sampling rates upwards of 1,000 times per second, compared to around 10-30 times for analog systems. Their high-speed processing ensures rapid, precise response to voltage fluctuations on power grids. Digital regulators can also incorporate advanced functions like automatic voltage regulation, power system stabilizers, load sharing and power oscillation damping - which are challenging or impossible with analog designs. This expanded functionality supports the complex coordination required between multiple generating units in modern interconnected grids.

The programmable nature of digital controls has also spurred more innovation in excitation product design. Software configurations enable tailoring regulation strategies for different generator/turbine OEM specifications as well as retrofitting existing units. Via software updates, digital systems gain new capabilities throughout their lifespan without hardware changes. By contrast, analog controllers undergo a costly redesign process for performance upgrades. Leveraging continued digital electronics scaling, manufacturers are making excitation systems smaller, more reliable, and affordable through standardized digital designs.

Overall, favorable flexibility, scalability, and future-proofing make digital excitation well positioned to align with the power industry's digital transformation. Utilities and independent power producers alike will likely adopt digital excitation at higher rates to support the evolving demands of smarter, distributed grid operations. These advantages of digital controllers underpin their growing dominance in the excitation systems segment.

By Application - Synchronous Generators Lead the Application Segment Due to Scale and Efficiency

Among excitation system applications, synchronous generator is expected to account for the largest market share of 68.4% in 2024. Synchronous generators remain the workhorse of centralized utility-scale and industrial power generation worldwide due to their enormous scale and high efficiency. Nearly all large thermal and hydroelectric power stations rely on synchronous machines to convert prime mover torque into electrical power.

The characteristic large size of utility generators, ranging from tens to hundreds of megawatts each, drives high excitation power demand to maintain synchronous speed under varying loads. Proper field excitation is critical for synchronous generators to produce smooth sinusoidal voltage waveforms in synchronization with the power system frequency. This ensures grid stability and power quality across transmission and distribution networks.

Moreover, synchronous generators can achieve efficiencies up to 99% due to synchronous operation with zero slip between the stator magnetic field and rotor. No other electric machine comes close to matching their immense power capacities or conversion efficiencies at utility scales. Their robust heavy-duty build also provides long operational lifetimes of 40 years or more. No other generation technology has so comprehensively dominated bulk power supply around the world for over a century.

While applications like renewable energy integration and distributed generation adopt other motor/generator types, the ubiquity and immense capacities of conventional centralized synchronous generator fleets will sustain their primacy in the excitation application segment. Even as the generation mix diversifies long-term, synchronous machines are projected to remain pivotal in Baseload, intermediate and peaking power plants that define baseload power systems for decades ahead. Synchronous excitation therefore comprises the lion's share of this excitation systems market portion.

Regional Insights

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The excitation systems market is poised for substantial growth, with the Asia Pacific region expected to dominate both in market share and growth rate in 2024. Holding the largest market share of 36.17%, Asia Pacific is set to lead the global market. The market growth in the region is driven by rapid industrialization, expanding power generation capacities, and increased investments in renewable energy projects across countries such as China, India, and Japan. This dominance is further bolstered by government initiatives aimed at upgrading aging power infrastructure and enhancing grid reliability.

Moreover, the region is projected to grow with the highest compound annual growth rate (CAGR) of 5.8% in 2024. This impressive growth rate can be attributed to the surging demand for electricity due to urbanization and the burgeoning population, coupled with a significant rise in manufacturing activities. Technological advancements and the adoption of smart grid technologies are also key factors contributing to this accelerated growth. As the demand for efficient and reliable power supply continues to rise, the Asia Pacific region is expected to maintain its leading position in the excitation systems market, underscoring its critical role in the global energy landscape.

Middle East and Africa present attractive prospects, driven by the ongoing railway modernization and new line projects under regional development programs such as GCC Railway, East African Railway Master Plan, and Trans-African Highways. Countries holding prospective mega projects include Saudi Arabia, the U.A.E, and Ethiopia besides Egypt aiming at boosting regional connectivity. While the demand is currently served through imports, local component manufacturing is gaining traction through technology transfer partnerships. This presents an opportunity for global players to cater to niche requirements of varying traffic conditions and expand aftersales and services. Developing economies in the rest of Asia Pacific and Latin America are also emerging as high potential markets, led by high-speed rail projects and industrialization respectively, augmenting freight transport requirements.

Market Report Scope

Key Developments

• In December 2020, Hitachi ABB Power Grids a technology Company, launched a year-long trial of the world's first hybrid solution, which combines a STATCOM (static compensator) with a synchronous condenser, a four-pole motor with brushless excitation system, working with SP Energy Networks, the University of Strathclyde, and the Technical University of Denmark.
• In November 2020, Emerson, a software company, was awarded a contract from Oklahoma Gas and Electric (OG&E) for the OG&E Redbud combined-cycle plant to upgrade and unify nine disparate control systems across four units. By installing Emerson’s Ovation technology at its Redbud combined-cycle power plant, Oklahoma Gas and Electric (OG&E) has realized numerous benefits, including the ability to cold start each unit 25 to 35 minutes faster, enabling the utility to more quickly generate megawatts while also reducing fuel costs.
• In September 2020, GE Renewable Energy, a technology company, was selected to be commissioned and supply 500MV of turbine capacity to the Kundah hydropower plant in India. GE was responsible for designing, manufacturing, and supervising of storage turbine, excitation system, control & protection system, and other systems for the plant.
• In September 2020, Basler Electric, manufacturer of power systems products, introduced the DECS-450 brushless digital excitation control system as the newest product in its line of integrated excitation systems. DECS-450 is built on the DECS microprocessor-based platform. It offers enhanced voltage regulation accuracy at 0.10%, five modes of excitation control, and integrated programmable logic.
• In May 2020, ANDRITZ , an international technology group, signed a contract with Companhia Hidrelétrica do São Francisco (CHESF) to perform the complete modernization and digitalization of the Sobradinho hydropower plant located on the São Francisco river, Brazil. The scope of supply comprises medium & low voltage cubicles, automation & control systems, spillway & water intake, conditioning monitoring system, HIPASE technology for synchronization, excitation, turbine governor and protection, repair service, transformers, cooling, and ventilation systems.
• In January 2020, ABB Ltd a technology company, won drive orders for two different Sun Paper projects. The first order includes drives for PM1 and PM2 (PM- Paper Machine) at the Laos mill. The second order includes a synchronous motor and drive project for the pulp production line in Shandong, China.

*Definition: The excitation systems market is used for power generation equipment which is used in utilities and industries. Excitation systems help regulate the voltage produced by alternators/generators by controlling the field current in the stator. They excite the rotor of generators in thermal, hydro, and renewable power plants to maintain a steady voltage output. The growing renewable energy sector and need to modernize the aging power infrastructure will drive the market growth for products like static exciters, brushless exciters, and rotating exciters.

Market Segmentation

• Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Static
  • Rotational
• Controller Type Insights (Revenue, USD Bn, 2019 - 2031)
  • Analog
  • Digital
• Application Insights (Revenue, USD Bn, 2019 - 2031)
  • Synchronous Generator
  • Synchronous Motor
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • South Africa
    • GCC Countries
    • Israel
    • Rest of Middle East & Africa
• Key Players Insights
  • ABB
  • Siemens Energy
  • General Electric
  • ANDRITZ Group
  • Voith Group
  • Nidec Corporation
  • KONCAR Group
  • Emerson
  • Melrose Industries PLC
  • Mitsubishi Electric Corporation
  • WEG
  • Tenel S.R.O
  • Basler Electric
  • Automation Electronics India
  • Amtech Power Ltd.
  • Reivax
  • Veo Oy
  • L & S Electric
  • PLUTON Group
  • NR Electric Co. Ltd
  • Birr Machines
  • SVEA Power
  • Excitation & Engineering Services Ltd
  • Nelumbo Icona Controls Pvt. Ltd
  • F&S PROZESSAUTOMATION GmbH