Market Overview
Europe's low to medium voltage cables market was valued at USD 16,139 million in 2018 and is projected to reach USD 28,147 million by 2026 with a CAGR of 7.3%.
Low to medium voltage cables are used for transmission of electricity in populated areas, in substations from transformers to main distribution panels, and from main distribution panels to individual distribution panels. Apart from this, workshops, maintenance shops/sheds, and industries are also some of the applications where low voltage cables are used to a certain extent. Conducting wires, insulation, and protection are the essential components of these cables.
Regional Analysis
European countries such as Germany and the U.K. contribute the largest share to the regional market, backed by the strong presence of prominent manufacturers in the region and increased government support in terms of FDI. Europe's electricity distribution network plays an important role in the functioning of societies, which demand high quality, environmentally sustainable, and affordable services.
France
France is one of the prominent contributors to the growth of the low to medium voltage cables market in Europe. The low to medium voltage cables market in France is primarily influenced by the development strategies adopted by prominent players such as Nexan. For instance, Nexan has signed an agreement for the SMAC project in the Ardennes Metropolitan District, which aims to use wind energy to encourage the use of electric vehicles to reduce the region’s carbon footprint. The company aims to achieve this by establishing a local electricity grid in the Champagne-Ardenne region. Moreover, energy and electricity are one of the major sectors in France, and it produces energy mainly through the nuclear reactor, which generates 78% of the country’s electricity consumption. This is expected to propel the demand for low to medium voltage cable market during the forecast period.
Segmental Analysis
Transmission Segment
Upgradation of the transmission medium and immense pressure to increase the reliability and efficiency of grid structure design drives the low to medium voltage cable market. The rapid growth of digital technologies is generating a large amount of data, which, in turn, has raised the demand for data management facilities and centers. For instance, increased Google activity in Europe related to data centers has led to significant fiber investment in every European country. Additionally, data centers host files and apply computational processes so that the information can fulfill user demands.
Construction Segment
The construction sector is witnessing rapid growth, mainly in the northwestern and southern parts of Europe, with total investment in the construction sector having increased by 9.5% during 2005–2015. This is attributed to increased demand for renovation and development activities of construction in the residential and commercial sectors.
Power Infrastructure Segment
Growing demand and improving power infrastructure have collectively boosted the overall demand for low to medium voltage cables. This has put pressure on existing resources and increased dependence on renewable sources such as solar and wind energies for power generation over coal. Significant investments have already been made in the sector to fight this issue, which further fuel the demand for low to medium voltage cables. Additionally, the European Union is aiming to reduce greenhouse gas emissions to 40% and generate 27% of its electricity from renewable sources by 2030. This is further supported by efforts to decrease pollution, and favorable government incentives and tax rebate policies to install solar panels.
Solar Segment
The demand for solar energy systems has gained traction among the middle class as well as the upper-middle-class populations. For instance, a solar power system having 8 GW of power generation capacity is installed in the European Union in 2018, 36% higher than 5.9 GW in 2017. According to the International Renewable Energy Agency, the European Union would double the renewable share in its energy mix from 17% in 2015 to 34% in 2030. However, volatility in copper and aluminum prices may hamper the growth of the market. In many commercial applications, copper or aluminum is used as a base material, which differs in terms of many key characteristics such as mechanical properties, conductivity, corrosion density, and price. The price of the material is primarily determined by the ability of the supplier to extract and transport the product and the demand for goods and services requiring conducting materials.
Economic growth, availability, the attractiveness of substitute goods, and political consideration affects the overall price. Among these characteristics, the price plays a key role. According to the forecast of the World Bank, the variation in copper prices in the years 2016, 2017, 2018 was USD 4868, 6170, and 6530/metric ton, while that of aluminum was USD 1604, 1968, and 2108/metric ton, respectively.
Low Voltage Cable Type to Note Significant Growth
The low voltage cable market is expected to grow at a CAGR of 7.2% during the forecast period 2019–2026. Low voltage cable is known for its AC voltage rating between 50V to 1000V and between 75V and 1500V for DC voltage. The segment is projected to experience considerable growth in renewable energy sources in the coming years, as many governments and private organizations are taking initiatives to generate more power from renewable sources. For instance, Croatia’s state-run power utility HEP is aiming to increase renewable energy by up to 50% of its total capacity from the current 35% by investing USD 153.96 million each year until 2030. This initiative would enhance the need for an efficient power distribution medium — in solar power generation, the low voltage cables connect the panel to the combiner box, the combiner box to the inverter, and the inverter to the transformer.
Copper is Widely Used in Low to Medium Voltage Cables
The copper segment was a key contributor to Europe's low to medium voltage cable market in 2018, and its predominant use in electrical installation work in buildings makes it one of the most preferred amongst other alternatives. According to the European Copper Institute, 60% of the total copper produced is consumed by the energy and renewable sector.
PVC Notes Widespread Use in Low to Medium Voltage Cables
The PVC (Poly Vinyl Chloride) cables segment is projected to grow at a CAGR of 7.2% during the forecast period. PVC cables are used in the construction of electrical wires for insulation, sheathing, and bedding. There are two types of PVC, namely, general-purpose and fire resistance, which is suitable for voltages up to 11kV. Fire resistance is an important aspect considered in electrical cables. Moreover, PVC can be made resistant to a wide range of chemicals, including acids, oils, and alkalis, and is durable, tough, and resistant to abrasion. PVC is primarily used in low voltage cables, and thus, it finds its applications in household and industrial electrification. According to Agora Energiewende, in 2017, the electricity consumption in European countries increased by 0.7%. Some of the factors influencing electricity consumption are progressed in energy efficiency, an increase in industrial production, an increase in the European population, and power demand from new sectors.
Impact of covid-19
The COVID-19 pandemic has severely impacted various industry verticals for the entire first half of 2020 and is continuing to have its impact on the rest of the year as well. The industries have been shut down and workers sent home, resulting in halted production almost for the entire year. However, there has been a constantly emerging demand for work from home culture across the world is a significant factor for the growth of Continuous Performance Management. The advancement in technology has a considerable potential to meet the mounting scalable and growing data transmission requirement. The rising demand for performance monitoring interfaces explicitly used for mobile device computing is anticipated to create lucrative opportunities for universal Continuous Performance Management in the post-COVID-19 era.
Increasing Need to Improve Business Performance
Without data collection, subjective analysis becomes the basis for performance review, leading to overall imprecision and bias in performance management. Organizations are leveraging the wealth of available digital insights and embracing the power of business intelligence to make more informed decisions that would facilitate business growth and evolution.
Currently, most business-based decisions are backed by metrics, facts, or figures. Several companies are adopting and implementing various reporting tools for accurate analysis and measurement of data. For example, according to Sisense Inc., more data-driven organizations are at the top of their game than those whose decisions are driven by instincts. Therefore, different organizations attach importance to data-driven decision-making for employee performance management. According to Atiim Inc., only 8 % of companies consider the annual review to be beneficial in the case of employee performance management. The increasing need to improve business performance and the increasing adaptation of data-driven decision-making by organizations drives the demand for continuous performance management software.
