Market Trends of North America Gas Insulated Switchgear Industry
High Voltage Hold Significant Market Share
- The power system that deals with voltages above 36 kV is referred to as high-voltage switchgear. As the voltage level is high, the arcing produced during switching operations is also very high. So, special care is to be taken during the design of high-voltage switchgear. High-voltage circuit breakers are the main component of HV switchgear; hence, high-voltage circuit breakers (CB) should have special features for safe and reliable operation.
- These switchgears have multiple usages across varied industries such as wind turbines, electrical motors, generators, solar power generation, residential power distribution, power supply systems, environmentally sensitive installations, underground stations, the steel, paper, and mining industries, and a growing number of marine applications. But the main application of the segment comes from large transmission and distribution networks that are being modernized and built across the globe.
- As of 2021, according to the BP Statistical Review of World Energy 2022 statistics, total renewable energy installed capacity accounted for 624.7 TWh in the United States, 50 TWh in Canada, and 39.7 TWh in Mexico.
- However, the segment has been plagued with downtime and maintenance issues. For this, companies such as ACTOM High Voltage (HVE), in May 2022, in conjunction with its technology partners, developed asset performance management solutions to help customers with condition-based maintenance strategies.
- Canada is expected to replace the older infrastructure and add transmission and distribution lines to increase the electrification rates to meet the electricity demand in the rural areas. Besides, the total investment in the T&D sector is likely to increase in the upcoming years. The capital expenditure in Canada's energy sector was USD 60 billion, with electric power generation and transmission accounting for more than USD 21.2 billion in 2020.
- Furthermore, in June 2021, under the Smart Renewables and Electrification Pathways Program (SREPs), the government of Canada announced a USD 713 million investment to support smart renewable energy and grid modernization projects. Such initiatives are expected to play a vital role in the growth of the GIS market.
- Such endeavors in the industry are expected to aid the growth of the market by providing a more feasible alternative to the market, especially when compared to its peers.
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United States Expected to Dominate the Market
- The United States is the largest electricity market in North America. In 2021, the electricity generated at utility-scale power generation facilities in the country had reached 4,116 terawatt-hours (TWh). About 61% of this electricity came from fossil fuels (coal, natural gas, petroleum, and other gases); around 19% was from nuclear energy; and 20% was from renewable power sources. Further, the United States Energy Information Administration (EIA) estimated an additional 49 billion kWh of electricity generation from small-scale solar photovoltaic systems in 2021.
- According to the EIA, the major power utilities spending on transmission operations reached USD 15.31 billion in 2021, up from USD 6.94 billion in 2010. The spending on the distribution network increased from USD 3.64 billion in 2010 to USD 5.65 billion in 2021. The expenditure on power delivery increased steadily as the utilities upgraded aging equipment, developed transmission infrastructure to accommodate new renewable generation, and installed technologies such as transformers, smart meters, etc.
- Hence, this indicates that the country's power generation mix is likely to change in the coming years, requiring subsequent developments in the transmission and distribution systems. This scenario is expected to create a massive demand for GIS during the forecast period. Moreover, the GIS is preferable for renewable plants such as solar PV projects where space is a constraint or the objective is to reduce the ample land area.
- The investments in the electricity transmission and distribution (T&D) networks and smart grid technology are also expected to increase the demand for gas-insulated switch gears. The United States has witnessed increasing investments in the transmission and distribution systems for years, with the annual investments by the utilities in the country spending more on delivering electricity to customers and less on producing the electricity.
- Therefore, the aforementioned factors are expected to drive the market during the forecast period.
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