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Asia Pacific Flexible Alternating Current Transmission Equipment Markets
Frost & Sullivan, Dec 2009, Pages: 114
This research service focuses primarily on the growing Flexible Alternating Current Transmission Equipment (FACT) markets in Asia Pacific. The FACT equipment market in the Asia Pacific is in growth stage of industry life cycle. The structure of the power factor correction industry is quite stable and the market demand for FACT equipment markets is expected to hit the rising trend. The factors that fuel the growth of FACT equipment markets are that the need for power reliability and stability from both T&D and industrial sectors is more and more increasing.
Research Overview
This Frost & Sullivan research service titled Asia Pacific Flexible Alternating Current Transmission Equipment Markets provides market dynamics, trends, competitive analysis, construction type, end-user trends, and revenue forecasts. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: static VAr compensator, capacitors bank, and reactors.
Market Overview
Need for Optimizing Power Factor Triggers Growth of the Asia Pacific Flexible Alternating Current Transmission Equipment Markets
The Asia Pacific flexible alternating current transmission (FACT) equipment markets are in the growth stage of the industry lifecycle. Between 2005 and 2008, the FACT equipment markets growth was fuelled by development in transmission and distribution (T&D) systems and increased investments in heavy industries such as metal mills, cement, mining, paper, food and beverage, and petrochemicals. In the future, the FACT equipment markets are expected to have a higher growth rate with up gradation in ageing T&D assets and development in renewable energy sector in major markets such as Australia, Japan, and South Korea. 'Southeast Asian countries are stepping up efforts to improve the power quality factor, ramping up prospects for the FACT equipment markets,' notes the analyst of this research service. 'Tends indicate a decline during the short term due to the adverse effects if the economic downturn; however, recovery is anticipated during the medium term.' Power quality problems also cost the economy billions of dollars annually because they result in unexpected process shutdowns, damaged equipment, loss of data, and so on. This poses a major risk to mission-critical businesses. Therefore, customers expect higher level of power quality and at least 95 percent of power factor ratio.
The key competitive factors in the Asia Pacific FACT equipment markets are price, product quality, reliability, and value-added services. The FACT equipment markets in east Asia and Australasia are highly driven by the reliability and experience of manufacturers, while in Southeast Asia, price is a major cause for angst for customers. High initial investment costs have been a restraining factor for the adoption of power electronics-based systems, but major savings can be attained in terms of maintenance expenditure, better reliability, and enhanced power quality. Multinational majors have a different set of products to address price-conscious markets and premium markets, which require superior functionality. Local participants mainly target the price-conscious markets. Manufacturers are spending huge amounts of money for research and development for the power electronics-based compensation systems, and these costs and related infrastructure costs are passed on to the customers. Moreover, power electronics components such as thyristors are high-priced. On account of this, power electronics-based FACT equipment are more expensive than the conventional mechanically switched capacitors and reactors. Advancements in semiconductor technology will certainly bring down the prices of thyristors, which, in turn, makes the FACT equipment cheap and affordable to many utility and industrial customers. Manufacturers are trying to overcome the high price competition by reducing production cost, seeking new customers, and partnering with local companies. A rational pricing strategy can ensure better realization of revenues and profits.
In many Southeast Asian countries such as Indonesia, The Philippines, Vietnam, and Thailand, low awareness of products among customers has slowed down market development. End users are ignorant of the causes of poor power factor, when it is necessary to install capacitors, and how best to select the ideal power factor correction solution. 'Manufacturers of power capacitors and reactors are confronted with the task of finding an easy but effective way to educate customers about power factor and develop an appropriate solution for them,' says the analyst. 'Effective communication channels should be opened up to convince end users that the selection and use of high-quality and well-designed capacitors/reactors are very important to ensure safety and reliability, and to maximize the return on investment.'
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By Geographic Region:
- East Asia: Japan, South Korea, and Taiwan
- Southeast Asia: Indonesia, Malaysia, Singapore, Thailand, the Philippines, and Vietnam
- Australasia: Australia and New Zealand
By End-user Vertical:
- Utilities
- Industrial
By Equipment Type:
- Static VAr compensator
- Capacitors bank
- Reactors
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