Market Trends of Japan High Voltage Direct Current (HVDC) Transmission Systems Industry
This section covers the major market trends shaping the Japan HVDC Transmission Systems Market according to our research experts:
Increasing Demand for Underground and Submarine HVDC Transmission Systems
- The submarine transmission of electricity is gaining importance, on account of increasing focus on renewable energy, such as wind energy, and power trading with neighbouring countries.
- The submarine direct current transmission requires a converter station at each end to make the DC interact with the AC grid network. In an HVDC transmission system, the submarine power cables have a much more complicated structure, compared to the overhead transmission lines, which are only composed of conductors.
- To support its offshore wind energy plan, in June 2020, the government launched its first offshore wind energy auctions in the country, under its offshore wind promotion law of 2019. Further, in April 2021, construction began at the country's first large-scale offshore wind farm, called Akita Noshiro. Such developments in the country's offshore wind energy sector are expected to create demand for submarine HVDC transmission systems during the forecast period.
- Apart from wind energy, Japan's territory comprises the four large islands of Hokkaido, Honshu, Shikoku, Kyushu, and other smaller islands, which makes the submarine HVDC system a preferable and much-needed choice for the country's electricity connectivity.
- Therefore, owing to the above points, the installation and demand for underground and submarine HVDC systems are expected to increase during the forecast period, thus making is largest segment in the market.
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Growing Renewable Energy Sector Expected to Drive the Market
- The Japanese power supply has been undergoing a significant transition, shifting away from fossil fuels and renewable energy sources. Moreover, wind and solar PV are on track to become the cheapest sources of electricity, thereby, providing new opportunities for decarbonization. Furthermore, as a more significant number of coal plants are decommissioned, renewable generation is expected to play a vital role in fulfilling the increasing energy demand.
- The cost of renewable power generation, mainly solar and wind power generation, has been continuously declining. The primary reasons are manufacturing innovations, improvement in wind turbine materials and designs, economies of scale.
- Renewable power generation facilities, such as offshore wind energy in Japan, are generally located far from the end-users. They require long-distance transmission lines to provide generated electricity to the consumers.
- The HVDC has become an integral part of many transmission grids. It can connect remote sources of electrical generation (renewable sources, like hydro or wind) to load centers where it is needed, hundreds or even thousands of kilometers away.
- As the HVDC lines are better suited for long-distance power transmission; hence, for power transmission companies HVDC transmission lines are more attractive option over HVAC for renewable power plants. They ensure high availability, minimal maintenance, and lower losses (by around 50% than HVAC).
- The country's offshore wind energy sector is expected to witness a gradual growth in total installed capacity. Thus, this is expected to create a significant demand for renewable energy, integrating with the grid in the coming years. Therefore, in addition to solar and onshore wind farms, the offshore wind energy sector is expected to create a considerable demand for HVDC transmission systems in Japan during the forecast period.
- Moreover, according to the New Energy and Industrial Technology Development (NEDO), offshore wind power potential in Japan based on wind development criteria is about 1,380 million kW, distributed along the Japan coastal trip and primarily located away from large load areas. Approximately 70% of them are expected to be situated along the coast of the Hokkaido, Tohoku, and Kyushu regions.
- Therefore, owing to the above points, increasing installations of renewable energy are expectd to drive Japan high voltage direct current (HVDC) transmission systems market dirng the forecast period.
