HVDC Converter Station Market size is projected to cross USD 25 billion by the end of 2035, growing at a CAGR of 8% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of HVDC converter station was over USD 10 billion. Increasing adoption of transmission systems that can improve utilization of grid assets is estimated to be a key factor to drive market growth in the coming years. Moreover, the growing number of offshore wind farms coupled with favorable government policies for the construction of HVDC converter stations is projected to bring ample growth opportunities to the market in the near future. The market growth can also be attributed to the increasing demand for renewable energy across the world. Renewable energy has become increasingly popular in recent years owing to the urgent need to reduce carbon emissions and mitigate climate change. In the year 2020, renewable energy accounted for nearly 73% of global net additions to power capacity, with solar and wind power leading the way.
The purpose of the HVDC converter station is to facilitate the transmission of large amounts of power over long distances, which is often more efficient and economical than using traditional AC transmission systems. HVDC transmission systems are used to transmit power from remote renewable energy sources such as offshore wind farms or hydropower plants to urban centers, or to interconnect power grids that operate at different frequencies or in different regions. HVDC converter station refers to a specialized facility used in high-voltage direct current (HVDC) transmission systems to convert alternating current (AC) power to direct current (DC) power or vice versa. The converter station typically consists of multiple components, including transformers, converters, filters, switchgear, and control systems.
The HVDC converter station market includes the various companies involved in the design, manufacturing, and installation of these specialized facilities, as well as the maintenance and service providers that support them throughout their operational life. The market is driven by the increasing demand for renewable energy, the need to upgrade aging power transmission infrastructure, and the growing interest in interconnecting regional power grids to enhance energy security and resilience. In addition to this, the power capacity is becoming more dependent on renewable energy day by day. The International Renewable Energy Agency (IRENA) estimates that renewable energy could account for 90% of the world's power capacity by the year 2050. In addition to environmental benefits, renewable energy can also bring economic benefits. The renewable energy sector has created millions of jobs globally and has the potential to create many more in the coming years. Furthermore, renewable energy can reduce dependence on imported fossil fuels, improve energy security, and provide access to electricity in remote and underdeveloped areas. Hence, it is estimated to fuel the growth of the global HVDC converter station market over the projected period.
Growth Drivers
Challenges
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~8% |
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Base Year Market Size (2022) |
~ USD 10 Billion |
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Forecast Year Market Size (2035) |
~ USD 25 Billion |
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Regional Scope |
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Power Rating (Below 500 MW, >500-1000 MW, >1000-1500 MW, >1500-2000 MW, >2000 MW)
The global HVDC converter station market is segmented and analyzed for demand and supply by power rating into below 500 MW, >500-1000 MW, >1000-1500 MW, >1500-2000 MW, and >2000 MW. Out of the five types of power rating, the >2000 MW segment is estimated to gain the largest market share of about ~35% in the year 2035. The growth of the segment can be accredited to the recent improvements in the power transmission capacity of valves. Apart from that, the need for high performance to connect renewable energy sources to the grid is also expected to drive the growth of the market segment in the future. Moreover, the line rectifier converter segment is estimated based on the technology to capture the largest share during the forecast period. This is owing to the low cost and high reliability of this technology compared to voltage source converters. The >2000 MW segment refers to large-scale power transmission projects that have a capacity of 2000 megawatts or more. The majority of >2000 MW projects are located in Asia, with China, India, and Pakistan leading the way. The most common technology used for >2000 MW projects is high-voltage direct current (HVDC) transmission, which is more efficient than traditional alternating current (AC) transmission over long distances.
Component (Converter, DC Equipment, Converter Transformer)
The global HVDC converter station market is also segmented and analyzed for demand and supply by component into converter, DC equipment, converter transformer, and others. Amongst these four segments, the DC equipment segment is expected to garner a significant share of around ~30% in the year 2035. DC is an abbreviation for direct current, which is a current that flows in one direction. In DC circuits, current flows in one direction, as opposed to alternating current (AC), where the current reverses 50 or 60 times per second, depending on the frequency of the power source. The growth of the segment can be accredited to the fact that production of DC equipment is growing rapidly as demand for renewable energy, energy storage, and electric vehicles continues to increase. According to a report by the International Energy Agency (IEA), global EV charger installations grew by 40% in the year 2020, reaching a total of 1.4 million chargers. While the COVID-19 pandemic may have temporarily slowed production and installation rates, the long-term trend is towards continued growth in the DC equipment segment.
Our in-depth analysis of the global market includes the following segments:
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By Component |
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By Power Rating |
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By Technology |
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By Configuration
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APAC Market Statistics
The HVDC converter station market in Asia Pacific, amongst the market in all the other regions, is projected to hold the largest market share of about ~35% by the end of 2035. The regional growth can majorly be attributed to the fact that there is a huge demand for transmission systems in China and India and a growing need for electricity to transport bulk goods in the region. Moreover, growing installations of electric vehicles throughout the region is also expected to fuel the regional market growth. According to a report by the International Energy Agency (IEA), China continues to lead the industry for EV chargers, accounting for nearly 80% of global installations in the year 2020. The demand for electricity in Asia Pacific is expected to grow significantly over the next few decades owing to population growth, urbanization, and economic development. This is driving the need for more efficient and reliable power transmission infrastructure, including HVDC converter stations. Many countries in Asia Pacific are investing in renewable energy sources such as solar and wind power to reduce their reliance on fossil fuels and address climate change. HVDC transmission technology is essential for integrating these variable renewable energy sources into the grid and ensuring stable and reliable power supply.
North American Market Forecast
The HVDC converter station market in the North America region market, amongst the market in all the other regions, is projected to hold the second largest share of about ~24% during the forecast period. The growth of the market in this region can primarily be attributed to the rapid expansion of the automotive industry in the region. Approximately 923,000 Americans are engaged in manufacturing automobiles and their parts, and 1,251,600 work in dealerships. As of the year 2021, the U.S. auto and parts industry will generate approximately USD 1.5 trillion in revenue. The automobile industry contributes 3% of GDP to America. In addition, increased per capita income for local residents is estimated to enable them to switch to individual, environmentally friendly vehicles. Nearly 75% of the Americans say they owned a car by the year 2022, and another 20% say they would own a business or family car. Hence, this is expected to drive the market growth in the North America region.
Europe Market Forecast
Further, the HVDC converter station market in the Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the early and rapid adoption of advanced technologies and the increasing number of offshore wind farms in the region. According to the WindEurope organization, Europe's offshore wind capacity increased by 2.9 GW in the year 2020. This year, 365 new offshore wind turbines were connected to the continent's grid. Moreover, increasing demand for electricity is expected to boost the market growth in the region in the coming years.
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Author Credits: Payel Roy, Dhruv Bhatia
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