The shunt reactor increases the energy efficiency of a power system by absorbing reactive power. It is a piece of electrical equipment that is primarily used for the compensation of reactive power in cable systems as well as long high-voltage transmission lines. These reactors can also be connected to a tertiary winding of a three-winding transformer or directly to the power line.
The global shunt reactor market is poised to witness a decent growth over the course of the next five years. The major factors boosting the demand for shunt reactors include the constantly growing requirements for the enhancement of efficiency of systems coupled with the burgeoning requirements of reliable power globally. These reactors also offer protection from sudden voltage spikes which is also a key factor as there is a growing demand for voltage protection solutions, which is thereby providing an impetus for the market to grow in the near future. The market is also expected to witness a growth on account of the globally growing demand for power, especially in the developing economies such as India and China, which is further propelling the power demand, thus, playing a significant role in shaping up the global shunt reactor market growth during the forecast period. This has further propelled the investments in the utility sector across various countries which is further widening up the business opportunities for the manufacturers over the next five years. Furthermore, the inclining focus of the governments of various countries to reduce the dependency on fossil fuels has further fuelled the investments in renewable power projects globally. This, in turn, is further acting as a catalyst for the market growth during the forecast period.
Global Shunt Reactor Market, Forecasts From 2019 to 2025, in US$ Billion
Source: Knowledge Sourcing Intelligence Estimates
Globally Growing Electricity Demand
The continuously rising demand for electricity across the globe on account of rising population and rapid industrialization and urbanization is one of the key drivers for the growth of the global shunt reactor market throughout the forecast period. The burgeoning demand for strong heating and cooling needs in some of the regions is also projected to be one of the factors responsible for boosting the demand for electricity as well. According to the IEA, the energy demand globally increased by 2.3% in 2018, which was considered at the fastest pace in this decade. The growing focus towards renewable energy on account of the growing demand in countries like the United States and China owing to initiatives towards sustainable development is also expected to push the investments in new and advanced facilities for catering the energy needs. Thereby positively impacting the demand for shunt reactors and add up to the growth of the market throughout the forecast period.
The graph below shows the total final consumption of electricity at the global level from the year 2007 to 2017, According to the International Energy Agency (IEA), the electricity consumption around the globe reached 23,696 TWh by the year 2017 from 20,503 TWh in the year 2010.
Electricity Consumption, in Twh, World, From 2010-2017
The graph above clearly states that electricity consumption has increased significantly over the past years. This has further propelled the investments by the governments of various countries in the up-gradation of the infrastructure of the utility sector in various economies which also acts as a key driving factor for the market. Furthermore, the inclination of the various countries towards the investments in smart grid projects also plays a significant role in augmenting the demand for shunt reactors the governments are taking strict measures to reduce the carbon emission from the energy and power sector. Thus, smart grids play a crucial role in the adoption of renewable energy. Furthermore, the increasing investments as well as the growing penetration of electric cars further acts as a catalyst for the growing investments in smart grids, which in turn, is positively impacting the global shunt reactor market growth.
Rising Participation by the Market Players
The market is also poised to witness a healthy growth on account of the increasing participation by the market players in the form of partnerships, agreements, and investments in the R&D for the launch of new and enhanced products. This, in turn, further shows the potential for the market to grow in the near future. For example, in October 2017, Siemens AG, a globally leading industrial manufacturing company announced that it manufactured the world’s largest variable shunt reactor. Similarly, in August 2017, General Electric Company announced its partnership with the National Grid Corporation of the Philippines (NGCP) for the supply of a variety of electric components that included transformers, shunt reactors, and others for a new 500 kV transmission line project and substation. Additionally, in January 2017, Bharat Heavy Electricals Limited (BHEL) and ABB together announced the winning of a contract worth INR13.6 billion for the devilry of the ultra-high voltage direct current to from the Power Grid Corporation of India which was expected to be complete by the year 2019.
The global shunt reactor market has been segmented on the basis of type, end-user, and geography. On the basis of type, the market has been segmented on the basis of oil-immersed and dry type. On the basis of end-user, the market for shunt reactors has been classified as electrical utilities and industry verticals. Furthermore, on the basis of geography, the market has been distributed as North America, South America, Europe, Middle East and Africa, and Asia Pacific.
Asia Pacific to Hold a Considerable Market Share
Geographically, the Asia Pacific region is anticipated to hold a substantial market share throughout the forecast period. The major factors bolstering the market significant share of the APAC region includes the constantly growing expenditure in utilities by the governments of various countries on account of the growing demand of electricity due to rapid urbanization and industrialization in the major countries like India and China among others. Furthermore, the growing investments in renewable energy throughout the region further support the growth of the market in the Asia Pacific region throughout the forecast period.