Electronic Components Market for HVDC Systems Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The electronic components market for HVDC systems was valued at USD 4.10 billion in the previous year. It is expected to reach USD 6.8 Billion over the forecast period, registering a CAGR of 9.27%. High Voltage Direct Current systems, abbreviated as HVDC systems, transfer direct current for electricity transmission over long distances. They are often referred to as Superhighway or Power Superhighway. HVDC lines improve the efficiency of transmission lines and enable rapid energy transmission.

Key Highlights

• HVDC systems are gaining momentum across the wind and solar power plants owing to HVDC technologies providing power flow control, rapid stability control, and ability to segment parts of the power system which can improve the grid's reliability, flexibility, and resilience.
• HVDC systems are also deployed in submarine and subterranean applications where overhead lines are unfeasible, and HVAC has higher electrical losses. HVDC submarine cables possess reactive power components. Thus, it does not have the physical restrictions that AC cables have. This allows underwater transmission lines to connect to asynchronous networks and offshore solar/wind power plants. The government's efforts to transmit energy from one country to another through subsea HVDC transmission lines create demand for electronics components such as IGBT, thyristors, and capacitors.
• The rapidly growing advanced HVDC transmission projects worldwide, particularly in Europe and Asia, drive market growth. The German government has established a framework for further developing offshore wind energy capacities in Germany with the Wind Energy at Sea Act. Accordingly, the installation capacity is to reach 30 gigawatts by 2030 and up to 70 gigawatts by 2045. More powerful high-voltage direct current transmission systems must also be built to transport electricity over long distances.
• The ongoing economic downturn, Russia-Ukraine war, geopolitical tensions, increasing electricity prices, high-interest rates, and growing inflation are anticipated to challenge the market's growth.

Electronic Components for HVDC Systems Market Trends

Capacitors to be the Fastest Growing Passive Component

• An HVDC capacitor is considered one of the core components of the HVDC transmission system. It plays a crucial role in converting AC current to DC current, transporting power between HVDC convertor stations, and further changing the DC current back to AC to feed the electricity into the power grid. It significantly helps improve power quality, maintain voltage stability, and control power flow instantly, along with decreasing the possibility of short-circuiting current by swiftly managing the power flow in the transmission lines. An increased focus on utilities to avoid overload conditions, enhancing power flow between parallel lines, and the need for improving the system's stability is further increasing the adoption of power capacitors in HVDC transmission systems.
• Various HVDC capacitors include aluminum electrolyte capacitors, ceramic capacitors, glass capacitors, plastic film capacitors, reconstituted mica capacitors, and wet tantalum capacitors. Paper capacitors were one of the first types sold on the market. They are mainly made by sandwiching two sheets of aluminum foil with paper soaked in mineral oil. The product's entire assembly is rolled up, wire leads are attached to the aluminum foils, and the package is sealed with wax before being placed inside a cylindrical cardboard case.
• As renewable energy continues to surge worldwide, advancements in power capacitor technology, including flat winding technology, further contribute to efficient power transmission, lower transmission losses, and better energy savings. For instance, TDK's flat winding technology employed in its MKK DCi-R power capacitors facilitates a volume fill factor of about 95%, with a majority capacitance exceeding 10,000 microfarads, indicating a tremendous efficiency in storing electric charges. This energy density is about 10% higher than other technologies.
• Considering the working principle of flat winding technology, it first winds the conductive metalized foils and insulates dielectric films to form thousands of alternating capacitor layers. Further, the volume fills factor of a capacitor refers to how completely the case is filled with the capacitor, followed by further pressing the cylindrical winding into a nearly rectangular shape to save space in a stainless-steel case with very high energy density.
• With many characteristics enclosed, design engineers are essentially adopting this and other new power capacitor technologies for HVDC projects throughout regions such as Europe, the United States, and China. Concisely, capacitors are crucial components in the converter stations that transform the AC current fed in at the start of every HVDC link into DC current with stable voltage for transmission across long distances. Power capacitors allow more remote and eco-friendly renewable power generation that is more efficient with few losses.

Asia-Pacific is Expected to Hold Significant Share with China Dominating the Market

• China is one of the world's leading markets for HVDC installations. The market for electronic components in HVDC systems is anticipated to be driven by rising investments and impending transmission and distribution projects, increasing the uptake of renewable energy sources and expanding electricity infrastructure during the forecast period.
• China is the largest producer and consumer of energy in the world. According to IRENA, it also produces and consumes the most CO2, accounting for 28% of all greenhouse gas emissions. China has been the global leader in renewable energy deployment for nearly a decade. With 134 GW, it provided almost half of the renewable energy capacity added globally in 2021. In addition, in 2021, China's installed renewable power generation capacity totaled 1,063 GW, accounting for 44.8% of the nation's overall power generation capacity.
• By 2030, China aspires to meet 25% of its energy needs with non-fossil fuels. China has a manufacturing and technological advantage in ultra HVDC transmission lines, and the rising renewable energy installations are expected to propel China's high-voltage direct current (HVDC) transmission systems, creating a positive market outlook.
• The rest of Asia-Pacific, including Japan, India, Korea, Australia, and other APAC regions, has significant emerging applications for electronic components in widely used HVDC systems. As a result of several strategic investments, product developments, investments in HVDC lines, and governmental initiatives for the transition to renewable energy sources, it is anticipated that market demand will increase in these regions during the forecast period.
• South Korea is one of the first Asian countries to commit to carbon neutrality by 2050. It has plans to develop onshore and offshore wind energy to reduce its reliance on fossil fuels for electricity generation. This will lower carbon emissions. The energy industry expansion in the region is anticipated to drive demand for electronic components like capacitors and thyristors. These components may be subject to stricter grid performance standards during power transmission.
• In Japan, the rising cost of coal and issues with nuclear power have increased interest in renewable energy sources such as wind and solar power, among others. As a result of the region's advancements in the solar and wind energy industries with the adoption of HVDC systems, it is anticipated that the market for electronic components will experience significant growth.

Electronic Components for HVDC Systems Industry Overview

The electronic components market for HVDC systems comprises long-standing established players who have made significant investments in the product. The new players entering the market require high investments. Companies can sustain themselves through powerful competitive strategies. Product innovations can also favor new players as they can target emerging and less explored application areas to expand their market presence further. Some of the major players in the market are Infineon Technologies AG, Renesas Electronics Corporation, Toshiba Corporation, etc.

• In March 2023, Hitachi Energy signed an agreement with the Gulf Cooperation Council Interconnection Authority to upgrade the Al Fadhili HVDC converter station under the authority in Saudi Arabia. As per the project, the company would replace the existing hardware and software with Hitachi Energy’s MACH control and protection system.
• In January 2023, Renesas Electronics Corporation announced a new gate driver IC designed to drive high-voltage power devices such as IGBTs (insulated gate transistors) and SiC (silicon carbide) MOSFETs for electric vehicle (EV) inverters.

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