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The gas-insulated substation market is expected to grow at a CAGR of more than 3% over the period of 2020-2025. Gas-insulated substations are more reliable, environment-friendly, and more flexible when compared to air-insulated substations (AIS). Fostered by the better space optimization, low maintenance cost, and enhanced protection against external elements, the demand for gas insulated switchgear is likely to increase during the forecast period. The high cost of gas insulated substations is likely to restrain the growth of the gas-insulated substation market in the coming years.

  • The power utilities sector is expected to be the fastest-growing market during the forecast period, owing to factors like growing demand for reliable power supply and an increase in investments on the power infrastructure.
  • Globally, the focus has increased on investments in clean energy projects and the development of renewable energy. As a result, the extensive development of new renewable projects, and rising electricity usage is likely to create an excellent opportunity for the gas-insulated substation market in the future.
  • Asia-Pacific has dominated the gas-insulated substation market in recent years and is expected to be the fastest-growing market in the forecast period, with the majority of the demand coming from China and India.

Key Market Trends

Power Utilities Sector to Dominate the Market

  • The power utilities sector is expected to dominate the market in the forecast period, owing to factors like rising electricity demand, and increasing investment in power infrastructure.
  • The global electricity production of 20433 TWh in 2008, grew over 30% and reached 26614 TWh in 2018. With a rise in population and urbanization, the electricity demand is bound to grow, and with it, the market for gas insulated substations are expected to grow in the forecast period. In March 2020, ABB was contracted to supply high-voltage gas-insulated switchgear to El Sewedy Electric T&D, which is working on the expansion of its Toshka 2 substation, Egypt. The project is part of a larger motive of making Egypt a regional hub for electricity exchange with Africa and Europe.
  • The robust economic growth in China reached nearly 7%, and the gross electricity consumption grew by 7.7%, exceeding 7,000 TWh, for the first time in 2018. China has witnessed high rates of demand for electricity, owing to the unprecedented growth of the economy, along with the rapid industrialization and urbanization of the region.
  • Increasing demand for clean energy is one of the primary drivers for the power utilities sector and, in turn, for the gas insulated substations in the sector. Electricity generation from renewable energy sources grew by around 14% from 2166.5 TWh in 2017 to 2480.4 TWh in 2018.
  • Therefore, with the increase in the demand for electricity and in particular clean energy, the power utilities sector is expected to rise, and in turn, the market is expected to grow for gas is insulated substations in the power utilities sector.

Asia-Pacific to Dominate the Market Growth

  • Asia-Pacific is the largest and is expected to be the fastest-growing market in the forecast period. Asia-Pacific is one of the fastest-growing regions in the world because of the increasing population, urbanization, and industrialization. As a result, the demand for guaranteed power supply is high. For addressing these demands, many countries are investing in the renewable energy sector and transmission and distribution infrastructure.
  • As per the International Energy Agency (IEA), the world’s most populated country China is likely to install 36% of total worldwide hydroelectricity generation capacity and 40% of all global wind energy between 2015-2021. Already, China has over 259,000 MW of new coal plants in various stages of development and accounts for more than 1/3 of the global coal plant pipeline. Gas-insulated substations are the most obvious choice for these developments owing to factors like low maintenance and safety.
  • On the other side, the coal consumption rate of India registered a growth rate of 8.7% in 2018, which indicated that the country is still highly dependent on coal for energy generation. India is also investing heavily in the renewable sector heavily, with USD 11.1 billion invested in 2018 alone.
  • The majority of these investments were directed towards the development of wind and solar farms. Gas-insulated substations are a viable option for all the new and upgradation projects due to the factors like lower maintenance and higher safety of the gas-insulated substations.
  • These, in turn, is likely to propel the demand of the gas insulated substation in the region during the forecast period.

Competitive Landscape

The gas-insulated substation market is partially fragmented. Some of the key players in this market include ABB Ltd, Toshiba Corp, Mitsubishi Electric Corporation, General Electric Company, and Siemens AG.

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