Market Trends of Air Insulated Switchgear Industry
This section covers the major market trends shaping the Air Insulated Switchgear Market according to our research experts:
Power Utilities Segment to Witness Significant Demand
- Owing to an increasing focus on conserving and ensuring uninterrupted power supply, power utilities are focusing on substation and switchgear technologies that require less space and have a reduced outage.
- Utilities can also opt for a hybrid switchgear-based substation, which is a mix of AIS and GIS technologies. In the hybrid substations, only the busbars are air-insulated and all the other equipment, such as circuit breakers, bushings, current transformers, etc., are gas insulated.
- Existing substations are mostly outdoor air-insulated substations, and at the time when these were built, the location was in the outskirt of the city. Air-insulated switchgears are widely used in the power distribution stations and compact substations in load centers, such as residential areas, high rise buildings, etc.
- Electricity demand registered its fastest growth in more than 10 years, as of 2021. The demand rose by 4.5% in 2021 with almost 80% of the projected increase came from emerging markets and developing economies. The world's two largest power markets, China and the United States accounted for around 45% of the global electricity demand in 2021.
- In China, electricity demand increased by 10% in 2021, and this increase was led by the industrial sector, including iron, steel and other metals, cement, and construction, as well as higher demand for cooling.
- Therefore, based on the above-mentioned factors, the power utilities sector is likely to witness significant demand, during the forecast period.
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Asia-Pacific to Dominate the Market
- Many countries in Asia-Pacific have an inadequate electricity distribution network. The problem of lack of T&D networks is mainly concentrated in remote and rural areas. To electrify these areas, the countries in the region are investing heavily in building transmission line networks.
- The expansion of these networks is expected to register significant growth, during the forecast period. As most of this expansion is expected to take place in rural areas, utility companies are expected to prefer AIS over GIS, as they are a cheaper option, due to the lower cost of land in these areas.
- Developing countries, like India and China, are extensively upgrading and installing new transmission lines and distribution networks to uphold the infrastructural developments, which is expected to be a major driving factor of the air-insulated switchgear market.
- The new power generation capacity additions in the Southeast Asian countries, such as Indonesia, Malaysia, the Philippines, Thailand, etc., are expected to boost the demand for the AIS market.
- Furthermore, Southeast Asia, one of the fastest-growing regions in electricity demand in recent decades, and expected to return to its previous growth rates by adding 5.4% of demand in 2021 compared to 2020.
- Therefore, factors, such as the increasing demand for electricity, along with the aging grid infrastructure, are expected to drive the demand for air-insulated switchgear in the Asia-Pacific region, over the forecast period.
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