The air-insulated switchgear market is expected to witness a CAGR of more than 4% during the forecast period, 2020-2025. Air-insulated switchgear (AIS) uses air as the insulation medium and plays a vital role in controlling and protecting the power system equipment. Electricity demand in the developed countries has continued to stay higher, owing to the continued efficiency improvements in lighting, refrigerators, and motors, etc. Therefore, the increasing demand for electricity in developing countries is expected to drive the market, over the forecast period. Additionally, owing to the increasing electrification rate across the world, the electricity transmission and distribution infrastructure is expected to witness massive growth, which, in turn, is expected to drive the demand for AIS, during the forecast period. Gas-insulated switchgear (GIS) can be used as an alternative to AIS, as AIS substations require high maintenance, thus leading to high operational cost. The above-mentioned factor is expected to hamper the market studied.
- The power utility segment is likely to witness significant demand for the air-insulated switchgear market, as these switchgears are widely used in power distribution stations and compact substations in load centers.
- Growing investments in the renewable sector and the ageing power infrastructure are expected to offer huge business opportunities for the market studied.
- Asia-Pacific is expected to dominate the market, with majority of the demand coming from the countries, such as India and China.
Key Market Trends
The Power Utilities Sector is Witnessing Significant Growth
- Owing to an increasing focus on conserving and ensuring uninterrupted power supply, power utilities are focusing on substation and switchgear technologies that require less space and have a reduced outage.
- Utilities can also opt for a hybrid switchgear-based substation, which is a mix of AIS and GIS technologies. In the hybrid substations, only the busbars are air-insulated and all the other equipment, such as circuit breakers, bushings, current transformers, etc., are gas insulated.
- Existing substations are mostly outdoor air-insulated substations, and at the time when these were built, the location was in the outskirt of the city. Air-insulated switchgear is widely used in the power distribution stations and compact substations in load centers, such as residential areas, high rise buildings, etc.
- The global electricity demand rose by 4% in 2018, growing nearly twice as fast as the overall demand for energy. The world’s two largest power markets, China and the United States, accounted for 70% of the global electricity demand growth, in 2018.
- In China, electricity demand increased by 8.5%, and this increase was led by the industrial sector, including iron, steel and other metals, cement, and construction, as well as higher demand for cooling.
- Therefore, based on the above-mentioned factors, the power utilities sector is likely to witness significant demand, over the forecast period.
Asia-Pacific to Dominate the Market
- Many countries in Asia-Pacific have an inadequate electricity distribution network. The problem of lack of T&D networks is mainly concentrated in the remote and rural areas. To electrify these areas, the countries in the region are investing heavily in building transmission line networks.
- The expansion of these networks is expected to register significant growth, during the forecast period. As most of this expansion is expected to take place in rural areas, utility companies are expected to prefer AIS over GIS as they are a cheaper option, due to the lower cost of land in these areas.
- Developing countries, like India and China, in the region are extensively upgrading and installing new transmission lines and distribution networks to uphold the infrastructural developments, which is expected to be a major driving factor of the air-insulated switchgear market.
- The new power generation capacity additions in the Southeast Asian countries, such as Indonesia, Malaysia, the Philippines, Thailand, etc., are expected to boost the demand for the AIS market.
- Therefore, factors, such as the increasing demand for electricity, along with the ageing grid infrastructure, are expected to drive the demand for air-insulated switchgear in the Asia-Pacific region, over the forecast period.
The air-insulated switchgear market is moderately fragmented. Some of the key companies in the market include ABB Ltd, Siemens AG, Schneider Electric SE, Larsen & Toubro Limited, and Alfanar Group.
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