APAC HVDC TRANSMISSION SYSTEMS MARKET ANALYSIS

APAC HVDC Transmission Systems Market size was valued at US$ 2435.37 Million in 2022, exhibiting a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030.

High Voltage Direct Current (HVDC) transmission system is a form of DC current that is responsible for distributing electricity over a long distance with the help of overhead transmission lines or submarine cables. Direct Current (DC) is a form of electric current whose flow is unidirectional, so the flow of charge is always in the same direction. The application of DC has a wider scope from use in electric circuits to distribution or transmission of electricity over a long distance in huge quantities. The HVDC systems are preferred in the fields where the unidirectional flow of charge is desirable as they are more cost-effective and efficient as compared to the High Voltage Alternate Current (HVAC) systems. These factors of being cost-effectiveness and minimum loss of electricity during the flow are expected to increase the demand for HVDC systems and drive the market growth in the Asia Pacific region during the forecast period.

Moreover HVDC has the ability to establish interconnectivity among the networks which operate on fluctuating frequencies and features. For this purpose the HVDC systems use Line Commuted Converter (LCC) and Voltage Source Converter (VSC). These technologies have similar application but are based on different framework and principles. LLC is economical as it used Thyristor power semiconductors and VSC is comparatively a newer technology based on power transistors and is a bit expensive. These new developments in the HVDC system would provide the end users several alternatives to choose from and thus cater to their specific requirements and fuel the expansion of the APAC HVDC Transmission Systems market even further during the forecast period.

 APAC HVDC Transmission Systems Market- Regional Analysis

Asia Pacific as a region is characterized by the presence of numerous developing economies like India, Vietnam, Singapore, etc. The presence of technological and Industrial superpowers like China, Taiwan, South Korea and other countries in the region are the factors which lay a strong foundation for the HVDC transmission Systems market to boom.     

Figure 1. APAC HVDC transmission systems Market Share (%), By Region, 2021

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China is projected to lead the HVDC Transmission systems market in the Asia pacific region. Due to the factors like growing population and economic growth with the help of an extensive manufacturing ecosystem, the electricity consumption in the region has increased significantly from the past few decades. The country is expected to show similar growth trends. The country has witnessed the highest demand for electricity in residential, commercial as well as industrial sectors in the last decade. China’s power consumption is estimated to be around 8,637 TWh as of 2022. This huge surge in demand for electricity makes it obvious that the country would expand its HVDC transmission network substantially during the forecast period and continue to hold a strong position in the APAC HVDC transmission Systems Market.

India is another country in the Asia Pacific region which is very similar to the Chinese market. India recently overtook China in terms of the most populous country in the world. Additionally, the country is also witnessing a massive economic growth continuously after the liberalization policy implemented in the 90s. The exponentially growing population, expanding industrial sector and the outlook of the government to supply electricity even to the remote areas of the country where electricity supply has not reached yet are expected to drive the market growth for HVDC transmission systems market in the country. Indian economy has witnessed an energy surplus in the past but still there are certain regions in the country that are deprived of electricity. This problem can be solved with the implementation of HVDC transmission systems effectively. Due to its growing nature and journey towards economic stability, the country is expected to emerge as a big market for HVDC transmission systems after China in the Asia Pacific region.

APAC HVDC Transmission Systems Market- Segmentation

The APAC HVDC Transmission Systems Market is classified into following segments based on system components, technology, development and power rating.

Based on the segmentation by development which includes sub-segments like overhead, underground and subsea, the overhead development segment has accounted for the majority of the market share. During the year 2022, the overhead segment accounted for almost 60% in terms of installation as this method is cheaper as compared to other methods. The developing countries that are still on the track to spread their electricity networks rapidly and cost-effectively at the same time are more inclined towards this method. The region of Asia Pacific has a presence of several developing countries which adopt the development method of overhead transmission for distribution of electricity throughout the country.  

Based on the segmentation by technology, the Line Commuted Converter (LLC) segment accounted for the majority of the market share. As this technology has been implemented since a long time and is proven to be cost-effective and efficient for transmission of electricity over long distances it enjoys a significant lead over the Voltage Source Converter (VSC) segment which is comparatively a new technology.

Figure 2. APAC HVDC Transmission Systems Market Value, By Technology (%) Analysis and Forecast,

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APAC HVDC transmission systems market was valued at US$ 2435.37 Million in 2022 and is expected to reach US$ 4983.65 Million by 2030, exhibiting a CAGR of 9.4% between 2023 and 2030.

APAC HVDC Transmission Systems Market- Key Competitors

Major players operating in the APAC HVDC transmission systems market include ABB Ltd., ATCO Electric Ltd., General Electric Co., Hitachi Ltd., Prysmian SpA, Siemens AG, Toshiba Corporation, TransGrid Solutions Inc.

APAC HVDC Transmission Systems Market- Recent Developments

1. In September 2022, ABB Ltd. A Swedish-Swiss multinational corporation operating in power and utility sector announced that it would sell the remaining stake in Hitachi Energy, a subsidiary of Hitachi group which operates in the utility sector to the later. The joint Venture that was announced in 2018 would officially come to an end after this buyback of stakes.
2. In October 2022, Sun Cables, an Australian start-up operational in the energy industry announced the formation of Asian Green Grid Network (AGGN). The primary objective behind this development was to foster innovation in support of faster cross-border transmission of electricity with the help of power grid in several countries across Asia.
3. In June 2022, Hitachi Energy, a subsidiary of Japanese business conglomerate ‘Hitachi Group’, announced that they are on the track to develop an improved HVDC transmission system to boost the supply of electricity. This new system would be initially installed for the Canadian hydropower project. This modernized system could have large scale implications in other regions of the world including the Asia Pacific if implemented seamlessly.
4. In November 2022, Toshiba Energy Systems and Solutions Corporation, a subsidiary of Japanese business conglomerate, Toshiba Group announced a strategic collaboration with Hokkaido Electric Power Company, a monopoly electric company in Hokkaido, Japan, to advance the thermal power plant operations and electricity distribution thereafter using IoT and AI Technologies.

APAC HVDC Transmission Systems Market- Driver

Higher Efficiency and Low-Cost benefits of HVDC systems over HVAC and other transmission systems.

The HVDC transmission systems are based on the principle of direct current which ensures the flow of charge or current in a single direction. This enables uniformity in the flow of energy and hence, this technology is highly used in power and utility sector where the distribution of electricity over long geographical regions have to be done. These systems are used since a long time and hence, the systems have developed and evolved over a period which has led to these systems being cost-effective and efficient as compared to newer systems like HVAC that are based on Alternate Current. For instance, According to a report by Cence Power, In July 2022, EE Power, a digital publication house on technical articles and reports pointed out that the HVDC systems reduce energy losses up to 5-10% as compared to the HVAC systems and hence prove to be more efficient in electricity distribution. This advantage of cost-efficiency and reduced losses is expected to grow the market for HVDC transmission systems in the Asia Pacific region.

Better environmental sustainability offered by HVDC systems:

The HVDC systems are more efficient in the transmission of electricity over long distances. The reports prove that the system reduces energy losses and increases efficiency of the transmission processes as compared to HVAC systems. This increase in efficiency means the energy required to be produced for distributing required amount of electricity would be lesser leading to saving of energy and leading to better environmental sustainability. For instance, according to an article published by EE Power, a leading publisher of articles on technical topics, in October 2020, the HVDC systems are more environmentally friendly than AC, providing more energy per square metre over greater distances more efficiently that AC systems as well as lower losses and lower space requirements. 

APAC HVDC transmission systems Market- Restraint

Increase in the prices of components used in HVDC systems:

HVDC transmission systems requires the installation of various components including smoothing reactors, converters, harmonic filter, etc. These components are used in order to absorb or reduce the harmonics that are produced during the transmission process.

Lack of trained workforce required engineering and maintenance efforts:

HVDC transmission systems are deployed in various geographic regions which generate power using different methods. These systems are deployed in different terrains and have specific requirements and they have to follow different regulations as well based on the region they are deployed in. This makes it necessary that all the HVDC systems are designed differently taking into the consideration all these variables. For instance, S&P Global, a market intelligence firm, published an article in September 2022. According to the article the challenge of skill shortage is expected to hamper the global energy transition.

APAC HVDC Transmission Systems Market- Opportunity

Increasing efforts taken by governments towards rural electrification:

The region of Asia Pacific has the presence of many developing countries where penetration of electricity is not as extensive as the developed countries. This provides a huge scope for these countries to expand the electricity transmission systems in the areas that are still deprived of electricity supply. These countries are on the track of economic growth and experiencing significant development in industrial sector as well as standard of living. This lays a huge foundation for the HVDC Transmission system market to grow substantially. For instance, according to an article published by Official Energy Asia, in 2020, Asia as a region is increasingly working towards the expansion of electricity supply. India has also made a significant improvement in the spreading its electrification network across the country. Where the electricity supply coverage stood at 76% in 2010, now the number has reached around 99% in 2020. This shows the huge scope for the developing countries in spreading the electricity coverage across the country.

APAC HVDC Transmission Systems Market- Impact of COVID-19:

The Covid-19 had impacted almost all industries such as automotive, manufacturing, semiconductor, electronics, and others. The production of all the electrical components and equipment required for the construction of HVDC transmission systems was disrupted during the period. The components like smoothing reactors, converters, semiconductors, etc. are essential parts of the HVDC systems whose manufacturing predominantly takes place in Asian Countries like China and Taiwan. These countries were severely impacted due to the covid-19 outbreak compromising the supply chain for these components. This led to a shortage of these parts in the region affecting the HVDC transmission projects in the region.

*Definition: Direct Current (DC) is a flow of current or charge in one single direction (unidirectional flow). It is the constant flow of electrons from high electron density to low electron density. In circuits this can be explained as a flow of electrons from negative pole to the positive pole.