Market Trends of Europe Medium Voltage Switchgear Industry
Industrial and Commercial Segment to Dominate the Market
- The industrial and commercial segment comprises businesses, organizations, and industries that consume large amounts of electrical energy. This segment includes various types of businesses, such as factories, manufacturing plants, data centers, office buildings, hospitals, and other large-scale facilities requiring significant electricity.
- With increasing industrialization and urbanization, various commercial and industrial entities have started operations in Europe in recent years. Industries like manufacturing sectors, data centers, and various other industries have grown significantly in recent years, and the trend is likely to continue during the forecasted period.
- The FLAP regions, which stand for Frankfurt, London, Amsterdam, and Paris, remain the most significant data center markets, with the majority of the demand coming from these areas. Frankfurt is leading the way in growth and is considered the top data center market among the FLAP regions.
- For instance, in January 2023, Vantage Data Centers, a prominent provider of hyperscale data center campuses worldwide, revealed its plans to enter the London market by constructing a EUR 500 million (USD 680 million) campus capable of delivering 48 MW of power. The company has also launched a second data center capable of providing 40 MW of power on its existing campus in Cardiff.
- According to Ember, in 2022, electricity demand in the European Union (EU) reached approximately 2,794 TWh. The electricity deamand is likely to increase in the forecasted period.
- Therefore due to the abovementioned points, the industrial and commercial sectors are likely to dominate the medium voltage switchgears market.
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Germany to Witness Significant Growth
- Being the largest country in Europe in terms of size and population, Germany is also the biggest energy consumer in the region. In 2022, renewable energy sources contributed around 41% of the country's total electricity generation, aligning with the German government's target of increasing the share of renewables to a minimum of 40% of electricity production by 2050.
- International Renewable Energy Agency (IRENA) reports that Germany saw a 7% year-on-year increase in the total installed capacity of renewable energy, with nearly 9.81 GW installed in 2022. The country is expected to experience exponential growth in installed capacity for solar, onshore, and offshore wind, positioning it as one of the world's most significant markets for solar and wind EPC (engineering, procurement, and construction) services.
- In 2022, renewable energy was the primary power source in Germany's electricity industry, with coal and natural gas thermal power plants following closely behind. Of the total 576.6 billion kWh of electricity generated in the country, approximately 44.3% came from renewable sources, 45.9% from thermal sources, and the remaining percentage came from nuclear energy.
- The renewable energy industry is expected to increase significantly in Germany during the forecasted period due to carbon emission targets and reduced reliance on Russian Gas. This increase in renewables is expected to create significant demand for medium voltage switchgear.
- In June 2022, Vestas AS secured a contract to provide EnBW's He Dreiht offshore wind project with 64 V235-15.0 MW wind turbines, generating a capacity of 900 MW. Additionally, Vestas has inked a deal with Cadeler for the transportation and installation of the turbines, slated to begin in the second quarter of 2025.
- Therefore, due to the abovementioned points, Germany is expected to dominate the market during the forecasted period.
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