Market Trends of Germany High-Voltage Direct Current (HVDC) Transmission Systems Industry
This section covers the major market trends shaping the Germany HVDC Transmission Systems Market according to our research experts:
Submarine HVDC Transmission System to Dominate the Market
HVDC links are mainly employed to transmit large amounts of power over a long distance with low losses, especially for offshore generation sites that are far from shore (>70km). HVDC submarine cables are typically single-core cables with extruded insulation and metallic radial water barrier.
The submarine transmission of electricity is gaining importance on account of the increasing focus on power trading between countries. The submarine direct current transmission requires a converter station at each end to make the DC current interact with the AC grid network. In an HVDC transmission system, the submarine power cables can be less costly, especially on a long link where the cable's capacitance requires too much additional charging current.
In the HVDC transmission system, the submarine power cables can be less costly, especially on a long link where the capacitance of the wire requires too much additional charging current. In 2021, the European country's generation stood at 588 terawatt hours, up from 574 terawatt hours in 2020. In the same year, Germany's gross electricity consumption amounted to 569 terawatt hours. In November 2022, Sumitomo Electric Industries Ltd was awarded a contract from the Prysmian Group to supply 150 km of HVDC submarine cable for NeuConnect Interconnector, a 1.4 GW power interconnection project between the United Kingdom and Germany. This is a private project financed and developed by a group of international investors, including Meridiam, Allianz Capital Partners, and Kansai Electric Power.
Factors such as the increasing number of offshore wind farms and interconnections between countries through submarine cables are expected to increase the demand for submarine transmission systems over the forecast period. This, in turn, is expected to propel the growth of the market studied.
Increased Penetration of Renewable Energy to Drive the Market
Given the increase in renewable generation in recent years, it has become increasingly important to deploy direct high-voltage current (HVDC) transmission lines. The HVDC transmission lines have a significant role to play when additional renewable generation sources become integrated into electrical grids.
The German government has been promoting the deployment of HVDC lines to transfer large amounts of power over long distances. They are now being proposed as a way to move electricity generated from wind in high-quality wind resource regions to other parts of the country.
The offshore wind installation is expected to create an opportunity for an increase in demand for the HVDC transmission lines during the forecast period.
However, Germany imports its power from the neighboring countries, owing to the increasing power demand, which is likely to grow by 30% until 2050, given the economically less attractive renewable sites and nuclear phase-out. Thus, the grid connecting Germany to other countries is expected to increase fivefold.
In February 2022, McDermott International was awarded the largest renewable energy contract from German transmission grid operator TenneT for the BorWin6, an innovative 980-MW High-Voltage, Direct Current (HVDC) converter project in the North Sea.
The refurbishment of the aging infrastructure of transmission lines in the country, and increasing renewable power generation, which requires a new installation of the HVDC transmission system, is expected to drive the demand for the HVDC transmission system in the country during the forecast period.
