Low Voltage Oil Insulated Switchgear Market Trends

Growth Drivers

• Rising demand for renewable energy sources: The increasing adoption of renewable energy sources such as wind and solar, is significantly influencing the demand for low voltage oil insulated switchgear systems to manage distributed energy generation. According to the International Energy Agency, the share of renewables in global electricity generation hiked to 29% in 2020 from 27% in 2019.
  
  Low voltage oil insulated switchgear provides necessary protection mechanisms for both the grid and the renewable energy systems. These prevent faults and isolate problems, safeguarding equipment and maintaining operation integrity. As more industries and municipalities adopt renewables, the need for robust and reliable low voltage oil insulated switchgear solutions is expected to boost in the coming years.
• Advancements in switchgear systems: Innovations in switchgear technology including digitalization and automation are enhancing their efficiency, reliability, and maintenance capabilities. The integration of smart sensors, data analytics, and remote monitoring and control boosts the operational efficiency of switchgear and provides real-time insights into the health of the infrastructure. The innovative structure and design enhance safety by utilizing 92% fewer bus bar components than conventional switchgear systems. Owing to rapid shift in digital trends, AI and IoT-based switchgear solutions are foreseen to gain widespread adoption among several end use industries.

Challenges

• High oil insulated switchgear costs: The upfront costs associated with oil insulated switchgear can be significant compared to air-insulated alternatives, which may deter potential buyers. Low voltage oil insulated switchgear requires specialized materials for both the insulation and the enclosure. The raw materials incorporated and the complex manufacturing steps increase the overall product costs, hampering the market growth to some extent.
• Threat of alternatives: Air insulated and gas insulated switchgear is often perceived as more environmentally friendly and affordable compared to oil insulated switchgear systems. Gas insulated switchgear requires less space compared to oil insulated systems, in urban spaces where space is at a premium, the compact nature of gas insulated switchgear systems drives their demand growth. The presence of alternatives can significantly hamper the sales of low voltage oil insulated switchgear technologies during the forecasted period.