SWITCHGEAR MARKET ANALYSIS

The global switchgear market size was valued at US$ 104.12 million in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 5.98% from 2023 to 2030. Switchgear market is projected to witness significant growth during the forecast period, driven by the rising energy demand, growing urbanization, and industrialization. The market is also expected to grow due to increased investment in renewable energy and increasing construction and expansion of new industrial infrastructure. The growing population and aging infrastructure will drive the market growth in Asia Pacific region.

Global Switchgear Market: Regional Insights

North America is projected to exhibit substantial growth in the global switchgear market during the forecast period. This is owing to rise in investments in the end user industries such as chemical, oil and gas, and power generation, as the production of natural gas is increasing in the region. The presence of countries such as Canada and the U.S. with abundant oil reserves in the region is driving the market growth.  Moreover, growing use of advanced technologies to replace existing equipment by oil and gas companies is also expected to drive growth of the global switchgear market during the forecast period.

Furthermore, Asia Pacific is also projected to witness promising growth in the global switchgear market over the forecast period due to increase in demand for renewable energy sources leading rise in power generation capabilities in the region. Countries across this region are shifting towards revolutionized generation of energy for embracing cleaner, high-efficiency digital technologies. For instance, as per the International Energy Agency (IEA), by 2024, China will have 40% share in the global renewable capacity. Thus, the market is likely to witness robust growth across the region.

Figure 1: Global Switchgear Market Share (%), By Region, 2022

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Global Switchgear Market Drivers:

Growing infrastructure of smart electricity grid to drive the market growth

Electric infrastructure is aging in several countries and burden on these infrastructure is also growing. The global power generation and transmission sectors are adopting modernization of the grid in order to make it more resilient and smarter with the use of advanced technologies, controls, and equipment. Smart grids are capable of communicating and working together to deliver electricity more reliably and efficiently. Using these grids can offer vast reduction in the duration and frequency of power outages, storm impacts, and it can restore services at faster pace, whenever there are power outages. Thus, adoption of smart electricity grid infrastructure is growing all over the world, which is expected to drive growth of the market.

Increasing government initiatives to boost the market growth

Growing number of governments of countries around the world are focusing on adoption of renewable energy sources and advancing existing infrastructure of power generation. For instance, as per the International Energy Agency (IEA) Renewables Report 2020, governments around the world, in October 2020, announced energy-related stimulus packages work US$ 470 billion that aim at production and consumption of energy. These stimulus involve grants, loans, tax incentives, and rebates. Thus, such initiatives by governments of countries are anticipated to boost growth of the global switchgear market during the forecast period.

Global Switchgear Market Opportunities:

Growing adoption of switchgear intelligence is expected to bring growth opportunities in the global switchgear market over the forecast period. The inherent intelligence is growing in switchgear systems, which allows predictive maintenance for minimizing the failure and downtime in the electric grid sites. Digitization has become the next revolution in the switchgear industry, which is driving the demand for low voltage switchgear industry. Thus, the global market is likely to witness lucrative opportunities in the global switchgear market during the forecast period.

Increasing penetration of advanced technologies such as Internet of Things (IoT) and Smart technologies in switchgear industry is anticipated to generate business opportunities in the global switchgear market over the forecast period. The penetration of such advanced technologies is transforming the operation of medium-voltage switchgear systems. The usual lifespan of these equipment is 15 to 30 years, or longer. However, technology and equipment standards continue to change at faster pace. The technological advancements in switchgear systems are enhancing the offerings such as increased lifespan, due to which demand for these systems is growing, which in turn is driving the market growth.

Global Switchgear Market Trends:

Decentralizing activities in administration of buildings and services is a recent trend

The decentralize activities in administration of services by a medium-sized industrial plants or a building have increased in recent years. The increase in connectivity is offering more visibility of the facilities and increased control over health of operations. Moreover, the edge control capabilities are now a possibility for making proper decisions at needed times in order for improving operational efficiency and uptime. Thus, this trend is likely to drive growth of the global switchgear market during the forecast period.

Increasing inclination toward SF6 free switchgear is a new trend

There is a growing shift toward SF6 free switchgear, specifically in the EU countries. Despite the small percentage contributed by SF6 to greenhouse gases, the percentage seems to be increasing, owing to extensive use of SF6. For instance, according to NOAA atmosphere analysis in Alaska, the SF6 contribution to greenhouse gases is increasing 108% from 2000, and it is likely to continue to increase in the coming future. Thus, technological advancements in the market is growing to offer more eco-friendly, low carbon solutions, which is further expected to augment growth of the market.

Global Switchgear Market Restraints:

Stringent regulations towards safety and environment to hinder the market growth

When switchgears are not operated properly with safety precautions, they can cause hazards, such as fire and explosions, shock and burns, mechanical hazards, and heat build-up. Switchgears are subjected to the EU Regulation 517/2014. The use of SF6 is playing a major role in electrical energy technologies, however; it also has disadvantages such as a very high potential of global warming. Thus, governments around the world are imposing stringent regulations regarding safety and environmental impact of this technology, which affects adoption of this systems. Thus, this factor is expected to restrain growth of the global switchgear market during the forecast period.

Functional disadvantages of switchgear systems to limit the market pace

The use of switchgear systems also has disadvantages such as arc flashing, high temperature, and over pressure. An arc flash generates only a brief light flash before it extinguishes itself in a domestic condition. In industrial or commercial settings, voltages and currents are very high due to which, more energy is released due to electrical breakdowns. The result of this occurrence can be a major explosion with extreme heat, blinding light, toxic chemicals, massive pressure waves, and deafening noise. Thus, this factor is expected to hinder growth of the global switchgear market during the forecast period. However, market players are focusing on technological development to offer solutions to overcome these problems. This is likely to support growth of the global switchgear market over the forecast period.

Figure 2: Global Switchgear Market Share (%), By End user Application, 2022

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Global Switchgear Market Segmentation:

The global switchgear market report is segmented into Type, and End User Application.

Based on Type, the market is segmented into Voltage (Low Voltage, Medium-Voltage, High-Voltage), Insulation (Gas Insulated Switchgear (GIS), Air Insulated Switchgear (AIS), Other Insulation Types), Installation (Indoor, Outdoor). Out of which, Low Voltage is expected to dominate the global market over the forecast period and this is attributed to the growing initiatives from governments towards use of low voltage switchgear. For instance, in November 2020, the Ministry of Heavy Industries and Public Enterprises of India announced a technical regulation for low voltage switch gears and control devices, and this technical regulations will come into effect by November 2021.

Medium Voltage segment is also expected to witness significant growth in the near future and this is owing to the increasing number of manufacturers focusing on development of eco-friendly components for manufacturing medium voltage switchgear. For instance, in December 2020, ABB launched an eco-friendly switchgear with medium voltage having a load brake, which uses an alternative to SF6 gas.

Based on End User Application, the market is segmented into Commercial, Residential, and Industrial. Out of which, Commercial is expected to dominate the global market over the forecast period and this is attributed to the various advantages of using switchgear systems. The adoption of these switching systems is growing across modern commercial building. Thus, the segment is likely to see strong growth in the coming future.

Residential segment is also expected to witness significant growth in the near future and this is owing to the growing adoption of switchgear systems due to its features and functions. The demand for switchgear in residential sector is growing for maintaining the security levels at all the distribution substations and units, as installing safety mechanisms and devices has become crucial. Switchgear systems are preferable choice for this, due to which adoption of these systems is growing in residential sector.

Global Switchgear Market: Key Developments

In July 2021, ABB Limited introduced its low voltage switchgear, Emax2 air circuit breaker technology which integrates with the AKD switchgear of GE Industrial Solutions for satisfying demanding applications such as hospitals, data centers, water/wastewater, food and beverage, infrastructure, and oil & gas.

In April 2021, Havells India Ltd. introduced an anti-bacterial switch range for promoting a safe lifestyle with Viruzsafe technology under Crabtree switches and electrical wiring devices brand name.

In April 2021, Mitsubishi Electric Power Products Inc. made its 245kV gas-insulated switchgear available, which is newly added to the high-voltage product portfolio of the company.

In June 2021, Siemens AG, signed a memorandum of understanding with Mitsubishi Electric for conducting a feasibility study on the joint development of high-voltage switchgear products having zero environmental impacts.

Global Switchgear Market: Key Companies Insights

The global switchgear market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global switchgear market are ABB Ltd., Fuji Electric Co. Ltd., Havells India Ltd., Powell Industries, Mitsubishi Electric Corporation, CG Power and Industrial Solutions Limited, Schneider Electric, Hitachi Ltd., Siemens AG, Meidensha Corporation, Eaton Corporation PLC, and Toshiba International Corporation (Toshiba Corporation).

*Definition: Switchgear is a type of electrical equipment that uses fuses, switches, relays, potential transformers, and lightning arrestors for controlling and isolating an electric power system. It is a component of an electrical supply system that connects to the low and high voltage of the power transformer.