Market Trends of North America Medium Voltage Switchgear Industry
Gas Insulated Switchgear Hold Significant Market Share
- North America is the second-largest electricity market globally for electricity generation in 2021. The region's electricity generation, transmission, distribution, and consumption processes have been profoundly changing over the last decade. The electricity markets, particularly the transmission and distribution networks, have experienced significant restructuring, paving the way for the increasing demand for technologies, including gas-insulated switchgear (GIS).
- Gas-insulated switchgear is advantageous compared to air-insulated switchgear when there are harsh environmental conditions such as snowfall or a corrosive atmosphere, as GIS provides insulation to the atmosphere compared to air-insulated switchgear. The sulfur hexafluoride (SF6) gas insulating the switchgear is an inert, non-flammable gas providing insulation in harsh conditions. Thus, it requires less maintenance compared to air-insulated switchgear.
- The gas-insulated switchgear is also used in the industrial sector, including railway networks. In April 2022, ONxpress Transportation Partners agreed with Infrastructure Ontario (IO) and Metrolinx for the GO Expansion On-Corridor Works Project in Toronto, Canada. The On-Corridor Works Project, part of the GO Expansion program, is expected to improve collective mobility in the Greater Toronto and Hamilton Area (GTHA).
- The contract covers infrastructure upgrades, including 205km of new track and 687km of rail network electrification. It also comprises significant developments to platforms and tracks at the Union Station, construction of new maintenance and storage facilities, and installation of train control and signaling systems. These projects are likely to boost the gas-insulated switchgear market in the country directly.
- In 2021, the total installed renewable energy capacity reached 457 GW, recording an increase of over 6% compared to the previous year's value.
- Therefore, the abovementioned factors are expected to drive the switchgear market during the forecast period.
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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 reached 4,116 Terrawatthours (TWh). About 61% of this electricity came from fossil fuels (coal, natural gas, petroleum, and other gases), while 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 country was expected to increase its electricity generation from 4,116 TWh in 2021 to 4,133.33 TWh in 2022. Further, it aims to increase renewable energy's share in the power generation mix from 20.1% in 2021 to 80% by 2030, followed by 100% renewable electricity by 2035. This indicates that the country's power generation mix will likely change in the coming years, requiring subsequent developments in the transmission and distribution systems.
- Investments in 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 abovementioned factors are expected to drive the market during the forecast period.
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