|Study Period:||2019- 2026|
|Fastest Growing Market:||Asia Pacific|
|Largest Market:||Asia Pacific|
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The global variable frequency drives (VFD) market was valued at USD 9.38 billion in 2020, and it is expected to reach USD 13.32 billion by 2026, registering a CAGR of 5.51% from 2021 to 2026. The Internet of Things (IoT) is a global trend in every industry, having an impact on VFDs by speeding and simplifying the flow of information from the machine to the technician and back again. Manufacturers are making changes to everything from their machines to their information technology (IT) departments to facilitate the collection, analysis, and application of drive data.
- The rising demand for process optimization is driving the market. Communication between modern motor controllers, such as VFD and process automation controllers, it is now possible to achieve much higher efficiency along with process improvement with reducing peak demand charges on an electricity bill by understanding in greater detail where and why power consumption varies.
- Rising demand for energy efficiency is driving the market. VFD uses an AC motor to control pumps and fans in a system without using valves and dampers. Traditionally, fixed-speed motors have to be controlled using valves and dampers, but they are a source of large amounts of energy loss. VFDs can create the same energy flow without the high pressure and power needed to adjust the flow, saving a high amount of energy.
- Additionally, advanced and modern drives integrate networking and diagnostic capabilities into better performance and increased productivity. Intelligent motor control, energy savings, and reduction of peak-current drawn are some of the major reasons to choose a VFD as the controller in every motor-driven system.
- The COVID-19 outbreak had an unprecedented impact on the VFD market, with several end-user industries that deploy variable frequency drives facing several difficulties. The industries were riddled with nationwide lockdowns, which brought them to a standstill. However, with the reopening of the offices and industries in the post-COVID-19 era, the industry is expected to witness an increasing need for energy-efficient devices creating an ancillary demand for Variable Frequency Drives.
- Furthermore, various companies are investing significantly in the R&D of advanced products, with researchers working on developing next-generation drives, like regenerative energy drives, hybrid safety drives, and others. For instance, in May 2021, Emerson launched the Copeland VFD product line, which is available in two series. The Copeland EVM VFD series is intended for chillers, medical refrigeration, display cases, walk-ins, reach-ins, and other applications where less control functionality is needed. Such developments are expected to lead to product innovations and drive the market during the study period.
Scope of the Report
The variable frequency drives market is growing with the increased usage of VFDs across major industry verticals, rapid industrialization, urbanization, and increasing investments in infrastructure development and shifting focus on energy efficiency. Advanced and modern drives integrate networking and diagnostic capabilities into better performance and increased productivity for the market in applications like energy and power, mining and metals, etc.
Key Market Trends
Energy and Power Segment to Hold Significant Market Share
- Variable Frequency Drives (VFDs) play the critical role of saving energy, improving performance, simplifying the system, and cutting downtime in Nuclear Reactors. For instance, during operations when the fast passage of liquid is required to cool down the reactor core, it is usual to have four big 6kV recirculation pumps and more than 100 control values to operate simultaneously. This factor accounts for over 25% of the energy costs to run a nuclear power plant.
- Further, the applications of drive technology are assisting the plants with protecting nuclear fuel and fuel rods, both of which are vulnerable to turbulence, by ensuring the continuous circulation of water without disruption. The regulations are very stringent in this respect. When the electricity supply is increased, its ascension should be gradual, which can be achieved through precise control of VFDs.
- As the advanced energy revenues are increasing, energy conservation is necessary for various applications because, with the ever-increasing demand, the need for electrical power can only be met by conserving electrical power in addition to the installation of new generating units. Variable frequency drive is one of the well-known energy-efficient drives, especially used in HVAC applications in the motor.
- Furthermore, wind energy is one of the most important sources of renewable energy in the world, variable speed wind turbines used with different types of generators depend on many causes. The doubly-fed induction (DFIG) generator is one of these generators. Recently, researchers presented the stand-alone performance of DFIG using variable frequency drive (VFD) to improve variable speed constant frequency (VSCF), where it implemented the system practically by MATLAB simulation. Such research reflects a sign for the implementation of VFD in the wind energy sector.
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Asia Pacific to Witness Significant Growth Rate
- The variable-frequency drive market is anticipated to hold a significant share in China, owing to the increasing operations primarily across power generation and the oil and gas industry, along with bold spending towards the establishment of manufacturing facilities.
- China domestic VSD manufacturers are taking advantage of their accumulation in the market, technology, brand influence, and other aspects of the industry to develop low-voltage and high voltage VFD business. In addition to their domestic markets, vendors are also focusing on expanding their market share in foreign countries.
- Furthermore, the Indian variable frequency drives market is obtaining a growth phase, with increasing energy prices leading to a need for efficient motor control systems and drives. Moreover, several government regulations to cut down energy usage, carbon emission, and electricity are likely to result in consumer inclination to uses energy-saving variable frequency drives.
- For instance, according to the India Brand Equity Foundation (IBEF) 2021 data, India's Electric Vehicle Industry has recorded USD 3.37 Billion Investments in 2020-2021, with commercial electric vehicles taking the lead, comprising 32% share of the investments. This is likely to promote the VFD industry demand within the Indian automobile industry.
- The surge of industrial automation and process control in Southeast Asia is mostly backed by government initiatives, rising demand for industrial automation supported by growing production demands, and the advent of Industry 4.0. The growing requirements for mass production and mounting pressure for decreasing operational costs are some of the key factors contributing to the overall development of the VFD market in this region.
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The variable frequency drives market is highly competitive owing to the presence of many small and large players in the market. The market has observed a growing need for energy-efficient equipment, by which international players in the market are fast increasing their footprints, and local vendors find it difficult to compete with them in terms of quality, safety, and price, which is giving a high competition. Some of the key players are Eaton Corporation, ABB Ltd., Honeywell International Inc., etc.
- July 2021 - ABB drives and motors helped test tracking vehicles in the simulated mountainous areas for a company specializing in turnkey testing and data acquisition equipment, CATE. The braking features provided by the two motors and the drive from ABB allow the customer to test tracking vehicles up to 650HP.
- June 2021 - Eaton announced the PowerXL DM1 micro variable frequency drive launch, designed for commercial, industrial, and original equipment manufacturer (OEM) customers. The new VFD offers the most value in its class through onboard Ethernet-based communications, IoT, webserver, Bluetooth, safe torque off, SIL2, and more.
- April 2021 - TotalFORCE technology, which enables more precise speed and torque control, diagnostic information for tracking system health, and automatic changes to keep operations operating smoothly, was added to Rockwell Automation's Allen-Bradley PowerFlex 6000T medium voltage drives.
- May 2020 - Mitsubishi Electric Automation Inc. launched the FR-E800 Series lineup of variable frequency drives. Micro-drive features a built-in PLC and will include safety functionality meeting IEC 61508 standards and support various networks, including Ethernet/IP, MODBUS/TCP, and CC-Link IE TSN. The FR-E800 Series is designed for engineering, technology, and product management in industries, such as packaging, material handling, food and beverage, water, and pumping, and industries that adopt PM motors to improve energy efficiency.
Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Buyers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
4.4 Technology Snapshot
4.4.1 By Type
22.214.171.124 AC Drives
126.96.36.199 DC Drives
4.5 Assessment of the Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rapid Industrialization and Increased use of VFDs across Major Vertical Industries
5.1.2 Growing Demand for Energy Efficiency
5.2 Market Restraints
5.2.1 Technical Concerns of the Equipment
5.2.2 High Cost of the Equipment
5.2.3 Cybersecurity Apprehensions
6.1 By Power Rating
6.1.1 Low Voltage
6.1.2 Medium Voltage
6.2 By End-user Industry
6.2.2 Food Processing
6.2.3 Energy and Power
6.2.4 Mining and Metals
6.2.5 Pulp and Paper
6.2.6 Other End-user Industries
6.3 By Geography
6.3.1 North America
188.8.131.52 United States
184.108.40.206 United Kingdom
220.127.116.11 Rest of Europe
6.3.3 Asia Pacific
18.104.22.168 Rest of Asia Pacific
6.3.4 Latin America
6.3.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
*List Not Exhaustive
7.1 Company Profiles
7.1.1 Eaton Corporation
7.1.2 ABB Ltd (GE Industrial)
7.1.3 Crompton Greaves Ltd
7.1.4 Honeywell International Inc.
7.1.5 Rockwell Automations Inc.
7.1.6 Hitachi Group
7.1.7 Siemens AG
7.1.8 Mitsubishi Corporation
7.1.9 Toshiba Corporation
7.1.10 Schneider Electric SE
7.1.11 Johnson Controls Inc.
7.1.12 Nidec Corporation
7.1.13 Danfoss A/S
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Variable Frequency Drives Market market is studied from 2019 - 2026.
What is the growth rate of Variable Frequency Drives Market?
The Variable Frequency Drives Market is growing at a CAGR of 5.51% over the next 5 years.
Which region has highest growth rate in Variable Frequency Drives Market?
Asia Pacific is growing at the highest CAGR over 2021- 2026.
Which region has largest share in Variable Frequency Drives Market?
Asia Pacific holds highest share in 2020.
Who are the key players in Variable Frequency Drives Market?
Eaton Corporation PLC, ABB Ltd., Honeywell International Inc., Rockwell Automation Inc., Hitachi Group are the major companies operating in Variable Frequency Drives Market.