A shunt reactor is a piece of electric equipment that has the ability to absorb reactive power thereby increases the efficiency of power systems. These are used in high-voltage transmission lines and cable systems for the compensation of reactive power.
The global market for shunt reactors is poised to witness a considerable market growth over the course of the next five years owing to the increasing investments in electricity infrastructure on account of the globally growing electricity demand. Booming industrialization and rapid urbanization primarily in the developing economies of the world such as India, China, and Vietnam among others are one of the major factors that are significantly playing a role in driving the demand for electricity.
Over the past years, the consumption of electricity has increased significantly, which in turn has led to an increase in the pressure on the existing infrastructure. This has further forced the government across several countries to invest in new and upgraded infrastructure and also in the up-gradation of the existing infrastructure in many countries as well. For example, according to the reports from the U.S. Securities and Exchange Commission, the potential investment gap for electric infrastructure is estimated to reach a level of around US$107 billion by 2020 and to reach US$732 billion by the year 2040. Furthermore, the booming investments in smart grid projects as well as the growing government focus towards the stay more dependent on renewable sources of energy is also poised to show an increased investment towards setting up the necessary infrastructure for clean energy projects as well. For instance, in 2018, the Indian government announced its plan to expand the renewable energy generation by a significant level and also aimed to attract investment worth ?1,155,652 crores in power generation sector in the five-year period between 2017 and 2022
Electricity Final Consumption by Sector, World, in Ktoe, 2010-2017
The figure above represents the final electricity consumption by industrial and residential sectors which represents that by 2017 the final consumption by the residential sector reached 496,583 ktoe from 427,986 in 2010. Similarly, by the industrial sector, it increased from 639,777 ktoe in 2010 to 769,106 by the year 2017 (Source: IEA).
Growing Investments in Clean Energy Projects
One of the key factor supplementing the global shunt reactor market growth over the course of the next five years includes the growing government focus across several economies to curb the emission of carbons and aim towards the generation of power from renewable sources and reduce the dependency on fossil fuels. Governments across the globe are implementing numerous strategies for the promotion as well as investments in clean energy projects. Some of the major examples to back up the factor include, Phase-II Grid Connected Solar rooftop program by the government of India for the achievement of 40,000 MW capacity from solar rooftop projects by the end of 2022 which includes an investment of more than ?11,000 crores. Also, the SunShot 2030 Goal set by the U.S Department of Energy further enables the use of solar energy more affordable and thus anticipates the market growth during the forecast period. Furthermore, the increasing price of fossil fuels is significantly playing a major role in shifting the preference of the governments of various countries to invest more in clean energy projects and thus saving huge costs. Fossil fuel energy is considered as the fundamental driver for the industrial revolution. However, the use of fossil fuels has negative impacts on both the environment and the economy being costly in comparison with the renewable sources of energy. Due to the high prices of fossil fuel, many regions across the globe are moving towards renewable sources for electricity generation. For example, as per the International Energy Agency, the electricity generation from fossil fell for five consecutive years in 2017 with the generation of 59.4% of total OECD gross electricity production.
The global shunt reactor market is segmented into type, end-user, and geography.
Oil Immersed to Show Promising Growth
By type, the market has been segmented as oil-immersed and dry type. The oil-immersed segment is expected to grow substantially throughout the course of the next years owing to the fact that there are growing investments in transmission and distribution networks in many countries. Furthermore, the growing adoption of oil-immersed reactors by electricity companies is further bolstering the growth of this segment over the course of the next five years. For example, in October 2017, L&T in Oman announced its partnership agreement with Siemens AG for the supply of four oil-filled shunt reactors the Oman Electricity Transmission Company (SAOC). Furthermore, the dry type shunt reactor segment is poised to hold a substantial market share over the forecast period owing to its wide applications across utility as well as industrial applications.
Electrical Utilities to Hold a Healthy Market Share
By the end-user, the segmentation of the market has been done as electrical utilities and industrial utilities. The electrical utility segment is projected to hold a notable amount of share in the market throughout the forecast period on account of the growing demand for electricity globally coupled with the rising investments by governments across developing economies to invest in new infrastructure due to the growing demands owing to rapid industrialization and urbanization. Furthermore, the increased spending in smart grid projects is also a key factor supplementing the demand for shunt reactors as the investments in smart grids is growing. For example, the smart grids market is expected to grow notably between 2018 to 2024 by reaching US$73.316 billion by the year 2024 from US$20.540 billion in the year 2024.
Smart Grid Market, Forecasts From 2018 to 2024, in US$Billion
Source: Knowledge Sourcing Intelligence Estimates
Apac to Hold a Noteworthy Market Share
Geographically, the market has been distributed into North America, South America, Europe, Middle East and Africa, and Asia Pacific. The Asia Pacific region is expected to hold a good share in the market throughout the next five years. Furthermore, the increasing government focus on the expansion of electricity distribution networks in a remote area in countries like India and China further support the market growth until the end of the forecast period.