Air Insulated Switchgear Market: Current Analysis and Forecast (2021-2027)
Air Insulated Switchgear Market is anticipated to display a CAGR of around 5% over the forecast period (2021-2027). The Global Air Insulated Switchgear Market is experiencing significant growth due to the increased demand for building automation systems, rising global demand for energy-efficient electrical products and increase in urban population and rise in industrialization activities are the key factors complementing the Air Insulated Switchgears market. In addition, rising investments in power transmission and distribution networks coupled with the growing augmentation and modernization of transmission and distribution networks across the globe, are expected to drive the market. For instance, to meet the demand of China's cities and industrial zones for electricity, the State Grid Corporation of China (SGCC) is building 12 electricity transmission lines linking the coal production and hydropower centers for a project valued at US$ 33.7 billion. According to China's state grid company, the line can transmit up to 12 gigawatts, which is enough to power 50 million Chinese households.
Furthermore, Increasing expenditure in electrical networks and low capital investment of switchgear coupled with increasing focus of power companies on installing technologies such as air-insulated switchgear that have a lower outage and can ensure uninterrupted power supply, are major driving factors in the market.
Moreover, the surging consumption of electricity in developing countries is escalating the adoption of smart grids coupled with the increasing need to upgrade existing infrastructure has positively influenced the market growth. In 2021, China witnessed an increase in electricity demand of 10%. This was mainly led by the industrial sector such as cement, construction, steel and metals, among others.
However, in early 2020, the majority of the countries and regions witnessed a countrywide lockdown due to the spread of COVID-19. This has influenced the overall demand for Air Insulated Switchgear market. Globally countries witnessed an economic slowdown. The industrial sector witnessed a major decline, where countries had imposed shut down of manufacturing facilities to reduce the spread of COVID-19. All these factors affected the market for Air Insulated Switchgear in a negative way.
Insights Presented in the Report
"Amongst Voltage Level, High Voltage Category to Witness Tremendous Growth During 2020-2027"
Based on voltage level, the market is bifurcated into Low Voltage, Medium Voltage, and High Voltage. Among these, the high voltage category is expected to witness the fastest growth during the forecast period owing to the expansion of power transmission and distribution (T&D) infrastructure to achieve high rates of electricity access in both developing and underdeveloped nations. It is widely used in power distribution stations and compact substations in load centers such as residential areas, high-rise buildings, large public buildings, and factory enterprises. Thus, with the growing construction of high-rise residential as well as commercial buildings coupled with heavy government investments across the world, the market for high-voltage air insulated switchgear to witness tremendous growth opportunities during the forecast period. For instance, The Government of India in the Union Budget 2014-15, has announced a project to develop 'One Hundred Smart Cities' as satellite towns of larger cities by modernizing the existing mid-sized cities in the country, US$ 1 billion (INR 70.6 Billion) were allocated in FY2014-2015 for the same.
"Amongst End-User, Power Utilities Category to Dominated the Market in 2020"
Based on end-user, the market is categorized into Power Utilities, Industrial, and Commercial and Residential. In 2020, the Power utilities category accounted for the majority share in the market. The growth of the category is mainly due to the growing regulations towards energy efficiency, upgradation & modernization of aging infrastructure for safe & secure electrical distribution systems, and increasing rate of industrialization and urbanization. The power and utilities industry is undergoing a radical transformation. Distributed renewable generation, new digital technologies, and shifting consumer expectations are resulting in a more complex, competitive, and challenging energy world. In addition, the need to invest in building and replacing assets, regulatory pressure to reduce costs, and the growth of distributed energy resources are some other major factors for the major share of power utilities category in the air insulated switchgear market. Thus, the category is expected to witness steady growth of XX% during 2021-2027.
"Asia-Pacific will Dominate the Market During the Forecast Period"
Asia Pacific constitutes the largest market for the industry and generated revenue of USD XX billion in 2020 on account of growing investments in the upgradation of old power transmission and distribution equipment, growing development of smart cities coupled with increasing industrialization in different countries of the region. The region is expected to dominate the Air Insulated Switchgear market during the forecast period as the region is a hub for manufacturing electronics components and devices corresponding to various industries.
In addition, an upsurge in renewable power generation projects is expected to positively influence the market demand for shunt reactors. For instance, in 2021, China's total renewable energy capacity increased 10.2 percentage points as compared to 2015. The capacity exceeded 1,000 GW in 2021, according to the National Energy Administration, accounting for 43.5% of the country's total power generation capacity.
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Deep dive regional level analysis of the industry
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