The United Kingdom HVDC transmission systems market is expected to grow at a CAGR of approximately 7.37% during the forecast period of 2020 – 2025. The increasing demand for cost-effective solutions for long-distance power transmission, ease in controlling the active power link, the possibility of bulk power transmission, and low loss in transfer of power (over HVAC) are some of the significant factors that drive the United Kingdom HVDC transmission systems market. However, the growing demand for distributed and remote power plants that provide electricity in rural areas without the need for significant transmission & distribution infrastructure is expected to hinder the growth of the HVDC transmission systems market in the coming years.
- Submarine HVDC transmission system is expected to grow at the fastest rate in the United Kingdom HVDC transmission systems market by transmission type on account of upcoming development projects driven by the increasing focus on power trading between countries.
- Technological advancement in HVDC transmission systems is expected to help in mitigating operational issues with wind and solar-based electricity transmission system, as the phase difference does not matter in the HVDC transmission line. While conventional HVAC does not work on this principle, it requires transformers to match the phase generated from a different source. Hence, this is expected to provide a better opportunity for the growth of the HVDC transmission system market in the country.
- Increased penetration of renewable energy has been driving the HVDC transmission systems market in the country.
Key Market Trends
Submarine HVDC Transmission System to Grow at the Fastest-Rate
- The submarine transmission of electricity is gaining importance on account of increasing focus on power trading between countries. The HVDC submarine power transmission system is considered as a key technology for the development of future power transmission networks.
- It is also the only solution available for the transfer of high power across long subsea distances. For these reasons, HVDC lines are preferred for interconnecting offshore wind plants worldwide.
- In the HVDC transmission system, the submarine power cables can be less costly, especially on a long link where the capacitance of the cable requires too much additional charging current.
- In July 2019, a 50-50 joint venture high-voltage direct current (HVDC) interconnector project between National Grid Viking Link, a subsidiary of the United Kingdom’s National Grid, and the Danish system operator Energinet was announced. This project is expected to assist the bi-directional flow of electricity depending on the current energy demand and supply scenarios in both Denmark and the United Kingdom, resulting in the more effective use of renewable energy in both countries.
- The Viking Link Interconnector line stretches for nearly 760km-long, connecting the revsing substation in Denmark, with the United Kingdom. The transmission line is expected to cover most of its distance through the subsea route, as it passes through the economic zones of Denmark, Germany, the Netherlands, and Great Britain in the North Sea.
- Factors such as the increasing number of offshore wind farms along with inter-connections between countries through submarine cables are expected to increase the demand for submarine transmission systems over the forecast period. This, in turn, likely to propel the market studied.
Increased Penetration of Renewable Energy to Drive the Market
- The development of renewable energy is a trend in the current scenario. Most of the renewable installed capacity is located far away from the load centers. HVDC is essential for remote projects, as cable lengths of approximately 80 km or more usually require HVDC transmission technology.
- As the HVDC lines are better suited for long-distance power transmission, power transmission companies are increasingly using HVDC over HVAC transmission lines, to integrate the renewable power capacity.
- The cost of renewable power generation is continuously declining. The economics of renewables has improved dramatically, with both wind and solar costs going down by 50% in just two years. The major reasons behind the falling generation costs are innovations in the manufacturing and installation of PV power generation, improvement in wind turbine materials and designs, intense competition, and economies of scale.
- Due to lower costs, the renewable energy sector is becoming competitive and, in some cases, cheaper than conventional power plants.
- As of 2017, the United Kingdom installed 1.7 GW of new offshore wind farms, higher than any other country in the region. The growth is attributed to 13 new offshore wind farms in the country, including the world’s first floating wind farm at Hywind Scotland. Moreover, there are another 11 offshore wind farms currently under construction in the United Kingdom and Germany, which will add another 2.9 GW by 2020.
- Therefore, based on the above-mentioned factors, growing renewable energy sector is expected to drive the HVDC transmission systems market during the forecast period.
The United Kingdom HVDC transmission systems market is consolidated. Some of the major players includes Siemens AG, Toshiba Corporation, General Electric Company, ABB Ltd, and Prysmian Group.
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