The global High-Voltage Direct Current (HVDC) converter stations market will expand significantly in the next few years, driven by the rising demand for electricity in the Asia-Pacific region and the growth in renewable energy generation, says research and consulting firm GlobalData.
According to the company's latest report*, the revenue of the global HVDC converter station market increased from $1.1 billion in 2006 to $8.3 billion in 2012. GlobalData forecasts the market to grow even further, reaching $89.6 billion between 2013 and 2020, with its cumulative capacity reaching 543.7 GW in the forecast period.
A major driver will be the need to transmit clean energy generated in renewable power plants to urban areas with fewer transmission losses. Additionally, the HVDC converter station market will also benefit from the increasing number of cross-border interconnections being implemented in Europe, Asia-Pacific and the Middle-East to improve electricity security and reliability.
Currently, China is leading the HVDC substation market, accounting for a cumulative share of 51% between 2006 and 2012. By 2020, the Chinese HVDC converter station market is expected to reach a value of $27.1 billion.
Ginni Hima Bindu, GlobalData's analyst covering Power, says: "Power plants in China are located close to the sources of fuel - hydropower and offshore wind power plants - and are far away from the urban areas. This means that power has to be transmitted over long distances, leading to a growing need for stable HVDC infrastructure.
"Furthermore, the advanced technology in HVDC systems is able to provide transmission systems with benefits such as transient stability improvement, voltage stability and control, absence of reactive power, and the removal of cascading disturbances. HVDC transmission lines enable power transmission over long distances - around 500km and over - with minimal power losses."
However, high implementation costs and the lengthy approval processes for transmission projects are major barriers to the growth of HVDC systems, as they only become economical when used over very long distances.
*High-Voltage Direct Current (HVDC) Converter Stations - Global Market Size, Average Pricing and Equipment Market Share to 2020