New Revenue Pockets:
The global switchgear market is expected to reach USD 120.1 billion by 2027 from an estimated USD 90.9 billion in 2022, at a CAGR of 5.7% from 2022 to 2027. The growing integration of renewables in the power mix and the need to upgrade grid infrastructure are expected to lead to the rising demand for switchgear. With the dominance of IT and cloud-based operations, the demand for power distribution grows exponentially in every industry. Moreover, the demand for energy management and electricity consumption monitoring equipment is further driving the market. Malaysia and China signed 100 memorandums of understanding in April 2022 to promote future collaboration and expansion of the Malaysia-China Kuantan Industrial Park (MCKIP) and China-Malaysia Qinzhou Industrial Park (CMQIP). Many such industrial projects are planned across various economies. The situation indicates favourable prospects for switchgear, which are critical in industrial environments for power safety and regulation.
Leading Key Players:
There are several types of switchgear, each with a different voltage level—high voltage (HV), medium voltage (MV), and low voltage (LV) switchgear. A few major players have a wide regional presence and dominate the switchgear market. The leading players in the switchgear market include ABB (Switzerland), General Electric (US), Siemens (Germany), Schneider Electric (France), Eaton (Ireland).
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The gas-insulated switchgears is expected to be the fastest growing segment of the switchgear market. The Asia Pacific is estimated to hold the largest share of the GIS market, followed by Europe, as stringent standards and codes are to be followed by the industries and utilities to ensure reliable power supply and avoid hazards in these regions. Gas-insulated switchgears needs 35% less space than Air-insulated switchgears and requires less maintenance. Industrial areas utilize them to fulfill high-energy demands through a space-saving design of minimum cost. They are deployed in various industries, serving different needs at varying voltage levels.
The outdoor segment is projected to be the fastest growing segment of the switchgear market. The high-voltage switchgears are primarily installed outdoors and transfer electricity over long distances and larger loads (more than 66kV). It also provides reliable switching operations. The rising demand from transmission and sub-transmission sector is expected to fuel the market for such switchgears.
The medium voltage segment is expected to emerge as the fastest growing segment of the switchgear market. The 2–36 kV voltage rating switchgears are medium-voltage switchgears. These are majorly used in manufacturing and process industries. Equipment, such as circuit breakers, paralleling switchgear, AIS, main ring units, motor control centers, railway & marine switchgears, and surge arresters, make up medium-voltage switchgears. The increasing use of medium-voltage switchgears in railway AC & DC traction power supply substations would drive the market for medium voltage switchgears.
DC segment is expected to grow at the fastest CAGR in the switchgear market. DC power is generated by batteries, solar cells, and thermocouples. The emergence of renewable energy sources like solar and wind and electric vehicles that operate on batteries, as a result, is expected to increase the requirement for DC switchgears and drives its market. High-voltage DC transmits large amounts of power from remote generation sites and connects power grids across large geographic areas. Also, the contribution of renewables to the electricity mix is increasing at a rapid pace globally due to increased investments in renewable power generation. They are expected to receive a surge in demand during the forecast period.
The switchgear market has been segmented, based on end user, into transmission & distribution utilities, industries, commercial & residential, and others. The others segment includes power generation, transportation, marine, and offshore sectors. The Transmission & distribution utilities are projected to be the fastest-growing segment of the switchgear market, by end user. Transmission and distribution utilities include investor-owned and publicly owned cooperatives and nationalized entities, the major electricity providers worldwide, making them the largest end user for switchgears. Switchgear has always been the backbone of electricity grids. Switching equipment became a requirement to connect power generation sources and loads to a single electricity line, which resulted in a complex yet effective meshed topology that is today’s electricity grid. With the aim to achieve 100% electrification expanding the current infrastructure, the developing countries are expected to drive the growth of the transmission & distribution utilities, which will subsequently increase the demand for switchgears.
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Asia Pacific is expected to grow at the highest CAGR during the forecast period. According to the United Nations Industrial Development Organization (UNIDO), global industrial production registered a stable year-over-year output growth of 3.3% in 2021, primarily driven by emerging APAC industries like India and China. China’s pledge to achieve carbon neutrality by 2060 has prompted new short-term goals, such as 1,200 GW of total wind and solar PV capacity by 2030. The policies and regulations to limit the power blackouts and strengthen the power distribution networks are creating a market for power sector equipment. These factors are expected to drive the Asia Pacific power distribution unit market.
