LONDON--(BUSINESS WIRE)--Technavio analysts forecast the global high-voltage direct current (HVDC) converter stations market to grow at a CAGR exceeding 24% during the forecast period, according to their latest report.
The research study covers the present scenario and growth prospects of the global HVDC converter stations market for 2016-2020. The market size has been calculated from the revenue generated from the demand for the HVDC converter stations market from different end-users in all the regions, including the Americas, EMEA, and APAC.
EMEA led the global HVDC converter stations market in 2015, accounting for a 36.12% share. The main reason for this growth was the massive investments in offshore wind energy and hydropower development. EMEA was followed by APAC, accounting for a 32.65% market share in the global HVDC converter stations market. The Americas had a market share of 31.23% in 2015.
According to Sayani Roy, a lead analyst at Technavio for research on smart grid, “The high number of grid interconnections between countries in EMEA, particularly in Europe, and the high renewable power generation led to its dominance in the HVDC converter stations market. Europe is the leader for offshore wind power generation in the world, which requires power to be transmitted over long distances to be able to connect to the grid; this has driven the need for HDVC systems in the region.”
Technavio energy analysts highlight the following three factors that are contributing to the growth of the global HVDC converter stations market:
- Growth in offshore wind installations
- Increasing cross-border interconnections
- Surge in global demand for electricity
Growth in offshore wind installations
The growth in offshore wind farms is one the major drivers that is boosting the demand for HVDC as the power generated from the offshore wind power plants require connection to the grid. The growth in offshore wind farms is mainly the result of the rising concerns over carbon emissions. Offshore wind farms are usually located far away from the grid; for instance, in Europe in 2015, the average distance from the shore to the site was 45 km. This means it needs to be transmitted over long distances, which result in high technical losses, but HVDC can carry power over long distances without significant power losses.
3,019 MW of net offshore wind capacity was installed and grid connected in Europe in 2015 alone, which is 108% more than the installed capacity that was connected in 2014. Therefore, the additions in offshore wind will drive the demand for HVDC during the forecast period.
Increasing cross-border interconnections
Cross-border interconnections, especially in Europe, are expected to increase over the course of the forecast period. Apart from renewable energy obligations, which promote renewable energy trade between different countries, concerns over electricity security and reliability as well as rising electricity prices are expected to lead to the growth of electricity trading in Europe. However, most of the transmission lines have reached their maximum capacities.
“There are a number of new interconnections planned between the UK, Germany, Poland, France and Sweden and among various other countries, which will ultimately boost the global HVDC converter stations market in the coming years,” says Sayani.
Surge in global demand for electricity
The global HVDC converter stations market is expected to show steady growth shortly with the global demand for electricity expected to rise considerably. Growing electricity demand in countries in APAC and the need to transmit power over long distances with fewer transmission losses has increased. The share of clean and emission-free power from hydro, wind, solar, and other renewable energy sources in the global energy mix is expected to rise. Since the power plants producing these types of clean energy are expected to be situated away from major urban areas, HVDC transmission through the converter stations will transmit this clean electricity generated from renewable power plants to urban areas with minimum transmission losses.
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