HVDC Converter Station Market Size, Share & Trends Analysis Report By Type (Monopolar, Bi-Polar, Back-to-Back, Multi-Terminal), By Technology (Line Commutated Converters, Voltage Source Converters ), By Applications (Power Industry, Oil and Gas, Powering Island and Remote Loads, Interconnecting Networks) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global HVDC converter station market was valued at USD 12.13 billion in 2023. It is expected to reach USD 21.19 billion by 2032, growing at a CAGR of 6.4% over the forecast period (2024-2032). The key driver of the global HVDC converter station market is the growing need for efficient long-distance power transmission, which is being fueled by grid connectivity and renewable energy integration projects. Market growth is stimulated by HVDC technology, which makes effective transmission over large distances possible while reducing energy losses and improving grid dependability.

HVDC converter stations are used to convert alternating current (AC) to direct current (DC) or vice versa in high-voltage direct current (HVDC) transmission systems. HVDC transmission systems are suitable for long-distance, point-to-point power transfers, submarine and underground cables, asynchronous interconnections, and access to remote renewable energy sources. HVDC converter stations can also provide benefits such as power flow control, voltage stability, and system isolation.

HVDC converter stations are useful for transmitting large amounts of power over long distances with lower losses and higher efficiency than AC transmission. They can also interconnect different AC systems that operate at different frequencies or voltages, enabling power exchange and grid stability. Moreover, they can integrate renewable energy sources, such as wind and solar, that generate DC or variable AC into the main grid. They can also provide dynamic control of power flow and voltage, improving the reliability and flexibility of the power system.

Highlights

• Europe is the highest shareholder in the global market

Market Dynamics

Global HVDC Converter Stations Market Drivers

Increasing Demand for Cost-Effective Solutions for Long-Distance Power Transmission

The increasing demand for cost-effective long-distance transmission fuels the growth of the HVDC converter stations market as countries strive to integrate renewables and expand their electricity grids. As the demand for integrating renewable energy sources, often located far from population centers, continues growing, cost-effective long-distance transmission solutions become crucial. High-voltage direct Current (HVDC) transmission offers a more efficient alternative. HVDC converter stations convert AC electricity from generation sources into DC for long-distance transmission. DC transmission experiences significantly lower power losses compared to AC, making it ideal for transmitting electricity across long distances.

For instance, the U.S. Department of Energy's (DOE) Office of Electricity (OE) and Wind Energy Technologies Office (WETO) released a funding opportunity announcement (FOA) that aims to fund research to drive innovation and reduce costs of high-voltage direct current (HVDC) voltage source converter (VSC) transmission systems, which are more efficient and flexible than traditional alternating current (AC) transmission systems for transmitting electricity over long distances and integrating renewable energy sources. The goal is to reduce the cost of HVDC systems by 35% by 2035 and promote widespread technology adoption.

Global HVDC Converter Stations Market Restraint

Long Approval Process For Installation 

The restraint for the HVDC converter stations market is the long approval process for installation. HVDC converter stations are complex and costly projects that require extensive planning, design, and coordination among various stakeholders, such as utilities, regulators, landowners, environmental groups, and contractors. The approval process for HVDC converter stations can involve multiple stages, such as feasibility studies, environmental impact assessments, public consultations, permitting, and licensing. These stages can take several years to complete, depending on the project's size, location, and scope.

Moreover, the lengthy approval process can delay the implementation of HVDC converter stations and increase the risks and uncertainties associated with the project. This can discourage potential investors and customers from adopting HVDC technology. Therefore, the long approval process for installation can be a significant restraint for the HVDC converter stations market.

Global HVDC Converter Stations Market Opportunities

Increasing Offshore Wind Farm Projects and Government Initiatives 

One of the key factors contributing to an opportunity is the rising number of offshore wind farm projects, which require HVDC transmission cables to connect them to the main grid. Offshore wind farms offer several advantages over onshore ones, such as higher wind speeds, lower noise and visual impacts, and lower land use conflicts. Another factor that supports the growth of the HVDC converter stations market is the favorable government policies and initiatives that promote the development of offshore wind energy and HVDC transmission technologies.

For instance, the U.S. Department of the Interior and the Bureau of Ocean Energy Management released a transmission expansion plan that detailed strategies to prepare the grid for increased offshore wind deployment in the Atlantic Ocean, including an interregional network of HVDC interlinks. The U.S. Department of Energy allocated USD 10 million to support innovation and cost-minimization strategies for HVDC VSC technologies.

Regional Analysis

Europe Dominates the Global Market

Based on region, the global HVDC converter stations market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Europe is the most significant global HVDC converter stations market shareholder and is expected to expand substantially during the forecast period. Europe is the largest market and is strongly dedicated to lowering its greenhouse gas emissions and increasing its share of renewable energy sources. HVDC converter stations help achieve these goals by integrating offshore wind farms, hydropower plants, and other clean energy sources into the grid. Europe has a large and diverse electricity market that requires efficient cross-border power exchange and transmission. HVDC converter stations facilitate this by allowing the interconnection of asynchronous grids, enhancing the stability and security of supply and reducing the congestion and losses in the AC network.

Furthermore, several leading companies and research institutions are based in Europe and have contributed to the advancement of HVDC converter station technologies, such as HVDC Light, hybrid HVDC circuit breakers, and HVDC meshed grids. The European Union (EU) has set ambitious targets for renewable energy and decarbonization, which require the expansion and integration of the electricity grid across the continent. HVDC technology is a key enabler for this, as it can efficiently transmit large amounts of power over long distances and connect different grid systems. The EU has also launched several initiatives to support the development of HVDC infrastructure, such as the Trans-European Networks for Energy (TEN-E) program, which provides funding and regulatory incentives for cross-border energy projects, and the European Green Deal, which strives to make Europe the first climate-neutral by 2050.

Moreover, Europe's HVDC converter station market is highly competitive, with several major players vying for contracts and market share. Some of the top competitors in the region are ABB, Siemens, GE, Hitachi, and Mitsubishi Electric. The region has several ongoing and planned HVDC projects, such as the North Sea Link between Norway and the UK, the SuedLink and SuedOstLink in Germany, and the EuroAsia Interconnector between Cyprus, Israel, and Greece.

Asia-Pacific is expected to be the second-largest market. The region has a huge demand for power transmission systems owing to the high population and rapid urbanization. HVDC converter stations enable efficient and reliable bulk power transmission over long distances, reducing losses and costs. The area has several renewable energy sources, including solar and wind power. However, they are frequently found in isolated locations. Moreover, HVDC converter stations facilitate the integration of these sources into the existing grids, enhancing grid stability and supporting clean energy goals. The region has several cross-border power transmission projects which aim to improve regional cooperation and energy security. HVDC converter stations enable the interconnection of different power systems, allowing power exchange and trade.

Segmental Analysis

The global HVDC converter stations market is bifurcated into type, technology, and application.

Based on type, the global HVDC converter stations market is segmented into monopolar, bi-polar, back-to-back, and multi-terminal.

Bi-polar systems are expected to dominate the type segment of the HVDC converter stations market, owing to their superior performance and advantages over monopolar systems. Bi-polar systems utilize two conductors, allowing them to transmit twice the power compared to monopolar systems that use a single conductor and rely on earth or seawater for the return path. This becomes crucial for long-distance, high-capacity power transmission projects. Moreover, bi-polar systems have a lower ground potential difference than monopolar ones. This reduces the risk of ground faults and associated problems like corrosion of underground cables and interference with nearby communication systems. Therefore, bi-polar systems will likely witness higher demand and growth in the HVDC converter stations market.

Based on technology, the global HVDC converter stations market is segmented into line commutated converters and voltage source converters.

The market for HVDC converter stations is largely driven by line-commutated converters (LCCs), known for their dependability and efficiency in high-voltage direct current (HVDC) transmission networks. Compared to conventional alternating current transmission, LCCs offer fewer energy losses and facilitate the efficient conversion of alternating current (AC) to direct current (DC) for long-distance power transmission. LCC-based HVDC converter stations are crucial for transmitting bulk power over long distances, addressing energy demand, and bolstering grid stability, which is driving the expansion of the global HVDC converter station market. This is due to the growing demand for renewable energy integration and grid interconnections.

Based on the application, the global HVDC converter stations market is bifurcated into the power industry, oil and gas, powering island and remote loads, and interconnecting networks.

The market for HVDC converter stations is dominated by the powering island and remote loads segment. These are locations that are remote from conventional power sources and need effective long-distance electricity transmission. HVDC technology is superior to traditional AC transmission, as it reduces power losses due to line resistance. Moreover, HVDC converter stations enable the integration of renewable energy sources, such as wind and solar power, that are abundant in remote areas but have variable output and must be connected to the main grid.

The demand for electricity in island and remote areas is growing due to increasing economic activity and development. HVDC converter stations offer a reliable and efficient solution to meet this demand by delivering bulk power from distant generation sources. However, many governments are actively promoting the use of renewable energy and investing in infrastructure development to support it. This includes initiatives to build HVDC transmission lines and converter stations to facilitate the integration of renewable energy sources in remote areas.

Impact of covid-19

As part of steps to control the transmission of the COVID-19 pandemic, governments in several nations have limited the movement of commodities and people and suspended the functioning of manufacturing facilities. It has impacted power usage throughout the world. As per the short-term forecast of the United States Energy Information Administration (EIA), electricity consumption in the United States is expected to fall by a record 4.5% by the end of 2020, as businesses have temporarily shut down due to the government lockdowns to stop the prevalence of the coronavirus. As a result, global demand for and manufacturing instrument transformers is expected to fall.

Recent Developments

• March 2024 – Siemens and GE announced a joint venture to combine their energy businesses, creating a new company called Siemens GE Energy. The joint venture was expected to leverage the complementary strengths and expertise of both companies in HVDC and other energy solutions, as well as increase their competitiveness and innovation in the market.
• November 2023 – Hitachi Energy, a global technology leader that is advancing a sustainable energy future for all, announced it won an order to provide Taesa, one of Brazil's largest private electric energy transmission groups, with an extensive upgrade of the Garabi high-voltage direct current (HVDC) converter station in Brazil. The link can transmit up to 2,200 megawatts of electricity, making it the world's most powerful back-to-back HVDC system.