Global high-voltage switchgear market to approach USD 28.8 billion by 2026 led by China and the US

Source: press release, 8 March 2022

HV Switchgear, Regional Market Value (USD billions), 2017, 2021, 2026 (source: GlobalData’s Power Intelligence Center)
HV Switchgear, Regional Market Value (USD billions), 2017, 2021, 2026 (source: GlobalData’s Power Intelligence Center)

The global market for high-voltage (HV) switchgears is estimated to grow to USD 28.8 billion in 2026 at a compound annual growth rate (CAGR) of 3.31% during 2022-2026 according to GlobalData. The data and analytics company found that the increasing demand for electricity in growing economic regions such as Asia-Pacific and the Middle East is propelling the HV switchgear market, with new capacity additions in the generation and transmission sectors.

GlobalData’s latest report, Switchgears for Power Transmission, Update 2022 – Global Market Size, Competitive Landscape and Key Country Analysis to 2026, reveals that urbanisation and industrialisation are the two leading factors contributing to the rising power demand. Environmental concerns, fuel resource challenges, and a changing technology landscape are influencing changes within the power sector.

Renewables and gas are the preferred fuel for new capacity construction due to the need to reduce emissions and coal supply constraints. The intermittent nature of renewable power generation would require the enhancement of the grid to support effective technology integration.

Bhavana Sri Pullagura, Senior Power Analyst at GlobalData, comments, “China, one of the fastest-growing economies with the largest fleet of transmission substations, topped the global HV switchgear market in 2021, accounting for 32.52% of the global market, and is expected to continue its leadership during the forecast period.”

“The need to build transmission infrastructure to move power from renewable sources in remote regions, the increasing domestic demand for electricity, large-scale renewable energy deployment, projection of considerable growth in the gross domestic product (GDP), and rural electrification initiatives are some of the major factors aiding the growth of the market in China. The country has a higher potential for Gas Insulated Switchgears (GIS) in the Asia-Pacific region,” Pullagura continues.

In Asia-Pacific, the growth is expected to be nominal during 2022-2026 at a CAGR of 1.40%. GIS is widely used in the region as it offers a smaller footprint for substations near urban load centres where the cost of land is high.

The US ranks second after China in the global HV switchgear market, accounting for 7.49% of the global market. Air-insulated switchgear (AIS) is the most popular in the Americas, with a market share of 69% in 2021, as most substation projects do not face space constraints. Brazil and Canada are the next largest markets in the Americas.

The HV switchgear market in the Americas as a whole, is expected to reach USD 3.05 billion by 2026 as the grid requires upgrades to replace aging assets and to accommodate the increasing sources of renewable energy.

In terms of HV switchgear market value, Europe, the Middle East, and Africa (EMEA) is expected to grow at a CAGR of 6.02%, which is higher than the growth in all other regions, during 2022-2026. The economic boom in countries in the Middle East led to an increase in demand for power, contributing to the growth of the market. Saudi Arabia is a major country in the Middle East with one of the world’s largest GIS markets, predicted to reach USD 806.76 million in 2026.

Pullagura adds, “The replacement of aging grid infrastructure, shift to renewable energy, grid reliability issues, improved policy and investment decisions, and technology innovations are the factors aiding the growth of the HV switchgear market in the Americas and Europe. Massive investment is expected in transmission and distribution (T&D) globally during and beyond the forecast period to accommodate the dynamic requirements of the future grid.”

GlobalData believes that policies established to address environmental challenges and capitalise on market opportunities afforded by technologies, would notably impact the switchgears market by the end of the forecast period.