Market Trends of Europe Wire And Cable Industry
The Power Cables Segment is Expected to Witness a Major Growth
- The surge in power cable growth is experiencing increasing demand for power infrastructure, renewable energy initiatives, and transportation electrification. With a global shift toward sustainable energy and the expansion of electrical grids, the need for high-capacity power cables is increasing, propelling their rapid growth.
- There are growing government initiatives in European countries promoting energy efficiency and environmental sustainability. The installation of solar power plants and wind farms is increasing, driving the market for specialized power cables that can handle high voltage and withstand harsh environmental conditions. As per data by EurObserv'ER, the solar annual electricity generation is constantly increasing from 60,304 GW hours in 2022 to 61,216 GW hours in 2023, which signifies the growth of the sector.
- The Spanish robust solar sector has several large projects in various development phases. One of the crucial projects is the Zaragoza Solar Park, an 11.8MW solar PV power project situated in Aragon, Spain. Currently in the development stage, the Zaragoza and Teruel greenfield project is on track for commissioning in 2024. This project is under the ownership of Bruc Iberia Energy Investment Partners. Boasting a single-phase development plan and aiming for 2580 MWp/dc capacity, this solar farm is planned to rank among Europe's largest. These large-scale projects are propelling the market's growth in Europe.
- Moreover, the development of smart grids in Europe requires new and upgraded power cables and enables communication and digital communication efficiently. A smart grid is an electricity network that efficiently coordinates the actions of all its users, including both generators and consumers. Its goal is to create an economically efficient, sustainable power system, ensuring high-quality, secure, and safe power supply. With smart grids, businesses and households can generate electricity through photovoltaic panels or wind turbines and distribute it directly to other consumers via the grid.
- The ongoing urban development and construction of new residential, commercial, and industrial projects increase the demand for power cables. The UK construction industry, as per the Office for National Statistics, saw its GVA (Gross Value Added) rise from GBP 33.36 billion in Q1 2022 to GBP 37.41 billion in Q1 2023. Notably, private housing emerged as the dominant segment in the UK's construction landscape, driving a significant portion of the industry's output.
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Germany is Expected to Hold a Major Share in the Market
- Germany is known for its investments in wind, solar, and hydroelectric power projects, which involve extensive cabling networks for transmission and distribution. For instance, in 2023, Germany saw its renewable energy sources account for 22% of its total energy consumption. This uptick was primarily driven by the consistent growth of solar and wind power installations in electricity generation, coupled with a rising adoption of renewable heating systems, as the Federal Environment Agency (UBA) reported. As per data by BMWK (German Ministry), the investment in renewable energy plants reached USD 40.39 billion in 2023, compared to USD 23.77 billion in 2022.
- German companies invest in research and development, which helps develop innovations in cable technology, including higher efficiency, improved durability, and environmental sustainability. Moreover, adopting Industry 4.0 practices helps integrate smart technologies into manufacturing processes, which helps grow the sector.
- In June 2024, Amprion, the German transmission system operator (TSO), announced that it received two high-voltage direct current (HVDC) cable projects, valued at over USD 3.3 billion (EUR 3 billion), from Sumitomo Electric, a Japanese firm. Sumitomo Electric plans to manufacture these cables in Germany, a move facilitated by its acquisition of a 90% stake offering from Suedkabel, a prominent German high-voltage cable manufacturer. As part of the agreement, Sumitomo Electric is bolstering Suedkabel's capital by USD 32.39 million (EUR 30 million) and further injecting USD 97.17 million (EUR 90 million) to bolster the manufacturer's cable production capabilities.
- Germany Trade and Invest supports small and medium-sized companies, with a particular focus on aiding their digitalization efforts. The Mittelstand 4.0 Competence Centers play a pivotal role in this by raising awareness about digitalization and offering comprehensive support. This support encompasses information dissemination, training sessions, and hands-on opportunities to explore and test advanced solutions nationwide. Furthermore, universities and research institutes contribute by offering dedicated test and demonstration labs tailored for Industries 4.0 applications.
- Additionally, investment in infrastructure development, which includes smart grids, transportation networks, and telecommunication systems, is expected to drive the market for different types of cables. The government support for infrastructure development also ensures a steady demand for wires and cables.
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