The global HVDC transmission market size was worth US$ YY million in 2021 and is estimated to reach US$ YY million by 2029, growing at a CAGR of 8.1% during the forecast period (2022-2029).
Market Overview
The High Voltage Direct Current or HVDC transmission uses direct current to transmit power across very long distances. The HVDC transmission technology offers effective and affordable power transmission across extremely long distances to fulfill the needs of rising load demands. The research and development authority found that it is used in modern power transmission because of its straightforward design and low level of complexity.
The HVDC transmission system ensures effective and economic power transmission across great distances and can handle increasing load needs. The HVDC transmission system mostly consists of converter stations, which transform AC power into DC at the sending end and inverter stations, which transform DC electricity into AC power at the receiving end.
HVDC transmission is far more cost-effective for bulk power transmission over large distances as it has lower losses than other distribution methods. Major nations use HVDC transmission with extensive territories to connect their grids.
Market Dynamics
Drivers
- The rise in demand for energy
- The rapidly growing popularity of VSC technology
Restraints
- High costs of installation
The rise in demand for energy
Since the first test line was built in Sweden more than 70 years ago, the High Voltage Direct Current (HVDC) transmission system is quickly gaining popularity and growing usage. Due to an increase in global energy consumption, there is an apparent trend shift in the power grid, emphasizing decarbonization and digitization.
Due to its capacity to resolve some of the most pressing difficulties that the modern grid faces, the trend shift is making HVDC one of the transmission markets with the quickest growth rates.
The industry is also driven by the expansion of utility-scale renewable energy facilities and the move away from fossil fuels. It facilitates long-distance energy-efficient electricity transmission from distant renewable power plants instead of the HVAC system.
HVDC grid technology is anticipated to advance with the rising integration of renewable energy and the increasing need to improve supply security.
Investments in the offshore wind sector, solar photovoltaic, grid expansion and energy storage projects are also necessary to balance the erratic supply of renewable sources.
As renewable energies are more integrated and there is a greater need to increase supply security, HVDC grid technology is likely to advance. Smart energy infrastructure is also necessary to balance the fluctuating supply of renewable sources, such as offshore wind, solar photovoltaic, grid expansion and energy storage projects.
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Geographical Analysis
The Middle East and Africa HVDC transmission market was US$ YY Million in 2021 and is expected to reach US$ YY Million by 2030, growing with a CAGR of 4.0% between 2022 and 2030.
The Middle East is one of the world’s wealthiest regions. The wealth is mainly concentrated in countries of the Persian Gulf, namely Saudi Arabia, UAE, Qatar, Bahrain, Kuwait and Oman.
The countries maintain a high standard of living by importing all necessary goods sustained by strong currencies buoyed by crude oil and petroleum sales. The Middle East is consistently diversifying away from the oil and gas industry to maintain a high standard of living for its citizens. Various countries of the region invest in emerging technologies to create an industrial and manufacturing base.
Modernization of electricity generation and distribution infrastructure are among the major projects undertaken to kickstart diversification and increase industrialization. In October 2021, Egypt and Saudi Arabia began work on a 350KV 1350 Km HVDC transmission link over the Red Sea to exchange up to 3000 MW of electricity between the two countries. It is one of the first large-scale HVDC projects in the region.
Gulf countries are also undertaking major HVDC projects to ensure grid stability and energy security. For example, in February 2022, UAE began construction on the first subsea HVDC transmission system in the middle east.
The 3.2 GW project will ensure stable bulk power transmission between UAE mainland and the country’s artificial offshore islands. The project is slated for commissioning in 2025.
North Africa is relatively more prosperous and developed than the rest of Africa. The region has established extensive energy and trade links with Europe. In early 2022, Morocco and the UK began work on an ambitious project to construct a 3800 Km subsea HVDC line to supply wind and solar energy generated in Morocco to the UK.
Many African countries have among the lowest rates of electrification globally, which has hampered the economic development of countries globally. The governments of many African countries are undertaking various projects to improve electrification.
One of the major projects currently underway in Africa is the Kenya-Ethiopia Electricity Highway. The project involves the construction of a bipolar 500 KV HVDC line with a capacity of 2000 MW from Ethiopia to Kenya, with a total length of 1068 Km, out of which 437 Km will be in Ethiopia and the remaining 631 Km in Kenya. The project was initially slated for completion by the end of 2020 but was delayed due to the COVID-19 pandemic and the Ethiopian civil war. The expected date of commissioning is late 2023.
African countries are also upgrading existing transmission lines to ensure a stable power supply for the region's development and growth of strategically important mining industries. In October 2021, the Democratic Republic of Congo’s (DRC) national grid operator signed a contract with ABB for the upgradation of the Inga-Kolwezi HVDC transmission line, which supplies power from hydroelectric stations on the Congo River to the mining areas of the Katanga region.
Due to the growing infrastructure and economic development, the demand for HVDC transmission in the Middle East and Africa is likely to increase in the coming years.
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