Product Code: 72381
The global switchgear market was valued at USD 93.38 billion in 2020 and is expected to reach a value of USD 127.40 billion by 2026, registering a CAGR of 5.24% during the forecast period. Electrical switchgear depicts a centralized collection of circuit breakers, switches, and fuses (circuit protection devices) that are intended to control, protect, and isolate electrical equipment. The circuit protection devices in switchgear are mounted on metal structures. A collection of one or more of these systems is called a switchgear assembly or line-up.
- Switchgear equipment is primarily used in complex electrical substations to function under fluctuating operating voltage in volatile environmental conditions. The development of new industrial infrastructure, including power plants for reliable and safe operations, is further anticipated to drive the growth of the market. Increasing investments to develop renewable energy and favorable regulations by the governments to support new technologies are expected to foster the industry landscape.
- The low-voltage type switchgear dominated the market landscape, with a revenue of USD 51.49 billion in 2020 with a market share of 55.14%. Moreover, It is expected to witness the fastest growth, registering a CAGR of 5.35% during 2021-2026. By end-user, the industrial sector held the largest share, with 52.75% share in 2020. The residential sector is expected to witness the highest CAGR of 5.56% over the forecast period.
- According to the IEA's World Energy Investment Report (2020), multiple support policies and maturing technologies are enabling cheap access to capital in leading markets. Sharp cost reductions over the past decade led solar PV to be cheaper than new coal- or gas-fired power plants. Renewables are expected to meet 80% of the growth in global electricity demand by 2030, with hydropower emerging as the largest renewable source of electricity.
- The growing competition from the unorganized sector and the lack of standardization and design parameters have been negatively impacting the quality of products and the overall growth of the industry. The market studied has also been witnessing the increasing trend of customization, which has been hampering the development of the switchgear market. Low-quality products are the reason behind several fire incidents that happen due to short circuits. This trend has been occurring primarily in developing countries like India.
- The switchgear market was significantly impacted by the COVID-19 pandemic, as the major suppliers of raw materials and end products were heavily affected. The industry faced decreased production, disruptions in the supply chain, and price fluctuations. The market was also affected by the impact of the COVID-19 on the energy sector, as the economic shock caused by the pandemic negatively impacted investments in this sector. According to the International Energy Agency's estimates, due to the COVID-19 pandemic, 2020 was expected to witness the largest decline in energy investment, with a year-on-year reduction of 20%, or around USD 400 billion, in capital spending.
Key Market Trends
Switchgear Market Segment by Type Voltage
- A rapid boost in the data center construction increases the need for low voltage switch gears to optimize colocation spaces with low voltage and ensure backup generators such as the de-centralized generators are set at low voltage levels. For instance, according to commercial real estate services, the construction of data centers power supply in the United States improved in 2020, accounting for 457.8 megawatts compared to 274.8 megawatts in 2019. This indicates the growing need for low voltage switch gears for datacenters.
- A low-voltage switchgear is a three-phase power distribution product that is designed to supply electric power to current up to 6,000 amps and voltage up to 1,000 volts and is typically used for low voltage switchboards, low-voltage motor control centers, and other feeder circuits. Some end-users who use low voltage switchgear are mining and metals, manufacturing, heavy industry, petrochemical, utility, water treatment plants, data center, healthcare, pulp, and paper industries.
- Further focusing on environmental factors, manufacturers are developing eco-friendly components to manufacture medium voltage switchgear. For instance, in December 2020, ABB released an eco-friendly medium voltage switchgear with a load brake that uses an alternative to SF6 gas. The load break switches are widely used in medium voltage secondary switchgear, and ABB manufactured the switches with Airplus, which is a fluoroketone-based gas mixture having 99.9 percent lower GWP compared to SF6. Thus, ensuring safety and abiding by the circular economy.
- The medium voltage switchgear is also being widely used in mining sectors to increase protection during direct medium voltage supply. For instance, mining projects in Brazil, such as the Eurasian Resources Group's iron ore mining project in December 2020, to extract at least 2 million mt/year, drives the demand and investment for medium voltage switchgear as it increases the need to protect operators and equipment from internal short circuits.
- High voltage switch gears, also called HV switchgear, deals with a voltage capacity above 36 kilovolts. Therefore, the arching produced by these switch gears is also high and is primarily used in industries like power grids, mining, oil and gas industries, heavy industry, petrochemical, utility, water treatment plants, data center, healthcare, pulp, and paper industries.
- Moreover, smart city projects and investments are also fueling the growth of high voltage switchgear. For instance, in April 2021, Eaton corporation purchased a 50% stake in Jiangsu YiNengElectric's busway business. This increases the demand for HV switchgear as the busway transports connect to electrical gears with HV switchgear.
Switchgear Market Demand in Asia Pacific
The Asia Pacific dominated the market landscape with a 40.84% share. The region generated a revenue of USD 38.13 billion in 2020. Asia Pacific is also projected to record the fastest CAGR of 6.01% over the forecast period.
- The growing demand for renewable sources of energy has led to the increase in power generation capabilities, currently at 14 MW, and is expected to reach 20 MW by 2030. For instance, the first 66 kV offshore wind farm, Huadian Yuhuan Phase 1, is expected to supply 770 million kilowatt-hours (kWh) of electricity to power approximately 240,000 households in the Zhejiang province per annum by the end of 2021.
- The presence of several rural areas in India and the accent on providing power to these areas by the government of India are the factors expected to contribute to the demand for switchgear in Asia-Pacific. The rise in the application of switchgears is also reflected in developments in product design and an increase in the overall power grid efficiency.
- Apart from China and India, Japan and South Korea are the leading promoters of the switchgear market, with dominant industrial advancement due to Industry 4.0. According to World Bank, in 2020, the industrial sector of Japan contributed 29.07% of the country's GDP whereas, In South Korea, the industry sector contributed 32.8% of the country's GDP.
- According to World Bank, in 2020, the industrial sector generated almost 30.8% of China's GDP. Furthermore, with emphasis on factory automation, leading players, such as FANUC, have been investing USD 240 million to expand its Shanghai plant. Similarly, several other companies are making huge investments in industry upgradation following industry 4.0. Such investments are expected to increase the demand for industry switchgears in the industry.
- Moreover, the allied end users of the market studied; namely, power utilities, industrial sites, and related service and infrastructure sectors, with the ongoing network extensions and are gradually leading to the integration of renewable energy installations.
The innovations in technology drive the adoption of the solutions and influence the buyers' decisions. In recent years, the suppliers have been trying to capture more value by charging higher prices, regulating the supply of materials, and passing costs to product manufacturers.
- Jun 2020 - ABB has announced a partnership with an Italian switchgear designer for a significant water purification plant to provide technology for the expansion of a cooperative water purification plant in Northern Italy. This project is fundamental for protecting water quality in the rivers and lakes of one of the most industrialized areas of the Po Valley.
- Apr 2021 - Havells launches an anti-bacterial switch range to promote a safe lifestyle with Viruzsafe technology under the brand name Crabtree switches and electrical wiring devices. This has been innovated keeping in mind the consumers' health, safety, and hygiene needs.
- Jun 2021 - Siemens Energy and Mitsubishi Electric signed a memorandum of understanding (MoU) to conduct a feasibility study on the joint development of high-voltage switching solutions with zero global-warming potential (GWP) that substitute greenhouse gases with clean air for insulation.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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 Attractiveness- Porter's Five Forces Analysis
- 4.2.1 Bargaining Power of Suppliers
- 4.2.2 Bargaining Power of Consumers
- 4.2.3 Threat of New Entrants
- 4.2.4 Threat of Substitutes
- 4.2.5 Intensity of Competitive Rivalry
- 4.3 Key Market Trends in Hard (MEP) and Soft (Service) FM in Europe
- 4.4 Impact of COVID-19 on the Facility Management Industry
5 MARKET DYNAMICS
- 5.1 Market Drivers
- 5.1.1 Growth of Smart Electricity Grid Infrastructure
- 5.1.2 Growing Focus on Infrastructure and Renewable Energy
- 5.2 Market Challenges
- 5.2.1 Stringent Environmental and Safety Regulations
- 5.2.2 Increasing Competition from the Unorganized Sectors
6 Technology Snapshot
7 MARKET SEGMENTATION
- 7.1 By Type of Voltage
- 7.1.1 Low-Voltage
- 7.1.2 Medium-Voltage
- 7.1.3 High-Voltage
- 7.2 By Insulation
- 7.2.1 Gas Insulated Switchgear (GIS)
- 7.2.2 Air Insulated Switchgear (AIS)
- 7.2.3 Other Insulation Types
- 7.3 By Installation
- 7.3.1 Indoor
- 7.3.2 Outdoor
- 7.4 By End-User Industry
- 7.4.1 Commercial
- 7.4.2 Residential
- 7.4.3 Industrial
- 7.5 By Geography
- 7.5.1 North America
- 7.5.2 Europe
- 7.5.3 Asia Pacific
- 7.5.4 Latin America
- 7.5.5 Brazil
- 7.5.6 Middle East and Africa
8 COMPETITIVE LANDSCAPE
- 8.1 Company Profiles*
- 8.1.1 ABB Ltd
- 8.1.2 Havells India Ltd
- 8.1.3 Mitsubishi Electric Corporation
- 8.1.4 Schneider Electric
- 8.1.5 Siemens AG
- 8.1.6 Eaton Corporation PLC
- 8.1.7 Toshiba International Coporation
- 8.1.8 Meidensha Corporation
- 8.1.9 Hitachi Ltd
- 8.1.10 CG Power and Industrial Solutions Limited
- 8.1.11 Powell Industries
- 8.1.12 Fuji Electric Co. Ltd
9 INVESTMENT ANALYSIS
10 FUTURE OF THE MARKET