The arc flash protection market is expected to grow at a CAGR of around 5% during the forecast period. Factors such as increasing investment in the electrical networks, growing manufacturing sector, and various fire safety regulations set by the Occupational Safety and Health Administration (OSHA) and National Fire Protection Association (NFPA) of the United States are expected to drive the market across the world. Although several regulations and efforts have been made to minimize electrical accidents and to have a high adoption of arc flash protection system, but factors such as high product and maintenance costs are likely to act as a barrier for the market to grow during the forecast period.
- The utility sector is likely to witness significant growth during the forecast period, owing to increasing uses of safety electrical and electronic equipment to maintain international safety standards.
- The government of the United Arab Emirates (UAE) is concentrating on having a higher share of the manufacturing sector in its country’s GDP. With its shrinking prospects for investment in the oil & gas industry, the country is planning to diversify its business to other business segments, such as manufacturing. For instance, the Abu Dhabi Economic Vision 2030 aims to grow the non-oil sector by more than 7.5% annually to help the UAE achieve a neutral non-oil trade balance. Thus, the initiative is expected to create an opportunity for the arc flash protection market growth in the near future.
- North America is likely to dominate the market during the forecast period, with the majority of the demand coming from the United States and Canada.
Key Market Trends
Utility Sector to Witness Significant Growth
- Arch flash protection system consists of relays, breakers, and fault current limiters. The system controls the flow of current to the electrical equipment and protects it from any electrical accident that may arise due to flaws in a network.
- From power generation to transmission and distribution, the utility sector puts huge investment and workforce to maintain and to operate a power grid. Safety being a prior concern of prevention from having an unnecessary incident, so the installation of an arc flash protection system is very much necessary within a power grid.
- To prioritize the safety of industry and workforce, an organization such as OSHA (Occupational Safety and Health Administration), and NFPA (National Fire Protection Association) has set different codes and standards for flames and electric arcs and is a mandate in many countries to abide by it, to have clearance for project development and installation.
- In 2018, global electricity generation was around 26614.8 terawatt-hours. Of the total electricity production, utility sectors such as fossil fuel and renewable have different contribution shares. With the growing concerns regarding environmental impacts, renewable sectors such as solar and wind are expected to grow further, increasing the use of safety protection equipment such as arc flash during the coming years.
North America to Dominate the Market
- The growing industrial safety norms and energy projects are expected to significantly drive the arc flash protection market in the region, mainly due to the United States being an early adopter of industry standards.
- The region is the second leading manufacturing hub after China, which contributes nearly 16.6% of the global manufacturing output. With high manufacturing and mandate safety standards, the region is estimated to have a high installation of arc flash protection systems.
- Additionally, the region has a significant presence in the oil and gas industry. With 135 operating refineries and the highest crude and natural gas production in the United States during 2018, it is estimated to have the highest number of arc flash protection system in the country.
- There is significant penetration of smart commercial buildings or infrastructure in North America, owing to the growing security concerns and awareness in energy conservation. The technological advancements in safety electrical devices and the adoption of those devices in infrastructure are expected to act as opportunities for the arc flash market in the region.
- As of 2019, nearly 19 gigawatts of wind projects are under construction in the United States. Commissioning of these projects, along with the power grid from transmission and distribution, is likely to install electrical safety and protection equipment, which is expected to boost the arc flash protection market during the upcoming years.
The arc flash protection market is moderately fragmented. Some of the key players in the market include Schneider Electric SE, DuPont de Nemours Inc., ABB Ltd, General Electric Company, Siemens AG, Arcteq Relays Ltd, Eaton Corporation Plc, Larsen & Toubro Limited, Littlefuse Inc, and NR Electric Co. Ltd.
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