Surge Arrester Market Size, Share & COVID-19 Impact Analysis, By Type (Porcelain and Polymeric), By Class (Station Class, Intermediate Class, and Distribution Class), By Voltage Level (High, Medium and Low), By Application (Utility and Industrial), and Regional Forecast, 2021-2028

The global surge arrester market size was USD 1.74 billion in 2020 and is expected to grow from USD 1.81 billion in 2021 to USD 2.50 billion in 2028 at a CAGR of 4.7% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, the industry witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, this market exhibited a decline of -5.5% in 2020. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

 This is a protection device that discharges or bypasses surge current to limit voltage on equipment. It prohibits continuing flow to follow current to ground and can perform these operations by ANSI standard C62.11. It does not absorb or stop lightning; it diverts lightning, limits voltage, and protects parallel-installed electronics. It has various applications, from safeguarding to an industrial to a utility substation. They are installed on circuit breakers in residential dwellings, pad-mounted transformers, pole-mounted riser poles, and substations. Rising demand for smart grids infrastructure replaces the existing infrastructure and introduces new end-use industries, especially in renewable energy projects, escalating the surge arrester market growth.

COVID-19 IMPACT  

COVID-19 Pandemic Severely Affects Surge Arrester Market Deveopment

Industry leaders anticipate delivery and construction slowdowns, either due to industry closures to minimize coronavirus spread. Many components/parts are sourced from China, the U.S., and Europe. Manufacturing difficulties in China and the U.S. due to this pandemic could significantly drop the market in the immediate future.

Furthermore, due to the COVID-19 outbreak, the value of numerous countries' local currencies has fallen, resulting in financial losses for metal manufacturers. The significant components used in the manufacturing process are often acquired in US dollars in increased component costs.

LATEST TRENDS

Enhancing Regulatory Efforts to Boost Investment

In the previous 20 years, energy network regulators' typical approach has been to avoid the risk of over-investing in well-meshed electrical systems, particularly in industrialized economies. Electricity is supplied by a small number of major utility-scale plants to meet slow-growing consumer demand.

According to IEA, While the European Commission's 2030 climate ambition plan which was launched in September 2020, calls for USD 70 billion in annual grid investments between 2021 to 2030. Citing another instance, the Fit for 55 plan, released in July 2021, calls for emissions to be 55% lower in 2030 than they were in 1990 (compared to the previous plan's 40% reduction).

DRIVING FACTORS

Increase in Deployment of Smart Grids Infrastructure Leading Market Growth

Surge arresters are critical components in transmission and distribution networks to protect electrical equipment. They are used in substations, transmission lines, and other electrical network components. Increased investment in transmission and distribution (T&D) networks is one of the primary reasons driving the industry. T&D network expansion and improvement directly impact the market growth. The growing number of electrification projects in China and India and network expansions to support renewable energy integration in the U.S., Europe, and other developed countries are expected to drive the market in the future years.

According to International Energy Agency (IEA), smart grid investments are estimated to reach USD 290 billion in 2021, up from USD 270 billion in 2019, and even surpassing it. The impressive development plans of state-owned utilities are likely to drive investment, with 2060 net-zero targets and an ambitious 14th Five-Year Plan for renewables on the horizon.

Increasing Investment in Renewable Energy Projects to Boost Market Growth

Global investments in renewable energy technology have increased during the last decade. Rapidly falling installation prices due to rapid technology breakthroughs and various countries converting to green energy power generation are assisting in the rise of renewable energy technologies. This is deployed in the upcoming renewable energy projects at connection points and substations. A substation is built-in grid-connected renewable energy installations to allow grid connectivity. This is used in these substations. Globally, the proportion of renewable energy generation is expanding, and increased investment in renewable energy projects presents prospects for manufacturers.

According to the IEA (International Energy Agency), worldwide investment in renewable energy increased, from USD 147 billion in 2009 to USD 282 billion in 2020.

RESTRAINING FACTORS

Growing Competition From The Unorganized Players Hampering The Market Growth

Major manufacturers face fierce competition from unorganized market competitors that sell low-cost, low-quality items without a license. These small local players sell products made in-house without obtaining the requisite approval. As the grey market grows, the brand names of the market leaders are being tarnished as low-quality goods are marketed under their names. Local key market players are increasing their sales, reducing the chance for global players to boost their profits.

SEGMENTATION

By Type Analysis

Polymeric Surge Arrester Held the Dominated Share Due to Their Wide Adaptability Across Various Voltage Ranges

Based on type, the market is divided into porcelain and polymeric. The polymeric segment held the largest share in 2020 and is expected to dominate the market during the forecast period. The market for polymeric is likely to increase due to its wide adaptability across various voltage ranges. Compared to porcelain, the product will be more popular due to its ease of handling and installation, dependable performance in challenging settings, inexpensive production, operational costs, and superior breaking resistance under overload situations. Furthermore, growing demand from numerous businesses to effectively combat system faults and significant investments to enhance existing power infrastructure would significantly improve the market globally.

The porcelain segment will also witness a significant share in the global market as it is self-sustaining and resist aging in the environment. The product's popularity will rise if it is stable, has low raw material costs, and has good mechanical strength. Industry giants are constantly making improvements to the technology of their products to make them more popular at high voltages. This, along with the material's technical maturity, will make it easier for people to use them.

By Class Analysis

Station Class Surge Arrester Held the Dominated Share as its Economic Adaptability

Based on class, the market is divided into station class, intermediate class, and distribution class surge arrester. The station class segment held the largest share in 2020 and is expected to dominate the market during the forecast period. Station class surge arrestors guard against lightning and overvoltage, which occur when an electrical item draws more current than it is designed to manage in the system. These arrestors are intended to protect equipment with a voltage greater than 20 MVA. Significant aspects driving the station class market size include high-pressure relief capability, high durability, improved contamination resistance, and outstanding cantilever strength.

Substations have long relied on station and intermediate class, while intermediate arresters perform at levels slightly less robust than station class arresters.  A wide range of industrial substations, big electric utilities, and the ability to protect substation equipment, multiple lines, and cable circuits from surges will continue to drive the intermediate class market share worldwide.

The distribution class segment also held a significant share in the global market. Increased reliability standards and the need to upgrade outdated distribution networks necessitate the development of distribution systems that offer stronger overvoltage protection, increasing the demand for the systems. The growing need for flexible distribution grids with excellent protection with the lowest let-through energy and zero internal watt loss would positively affect business growth opportunity.

By Voltage Level Analysis

High Voltage Level Surge Arrester Held Dominated Share due to its Numerous Utilization in Utilities and Industrial Sector

Based on voltage level, the market is divided into high voltage, medium voltage, and low voltage levels. The high voltage segment contributes the largest share in 2020 and is expected to dominate the forecast period. The High Voltage segment is intended to protect maintenance and installation staff by allowing the device to be safely earthed. It has a wide application in switchgear, transformer, and over the line to project the devices overvoltage transient.

The growth of the medium voltage segment will be fueled by both economic diversification and the need to protect heavy equipment from voltage surges. Unprecedented demand for transformers and switchgear will add to the industry's landscape. This is because old systems are being replaced and upgraded, which will add to the landscape.

Low voltage segments can be found in consumer-in-house supplies, distribution transformers, low voltage overhead lines, and other systems. Increased demand for distribution capacity plans to satisfy rising power demand from rapidly expanding residential and commercial establishments will benefit the business outlook.

By Application Analysis

Utility Segment Dominated Backed by Demand for Electricity for Enhanced Living Standards and Transportation Electrification.

Based on the application, the market can be segmented into utility and industrial. The utility segment held the largest share in 2020 and is expected to dominate the market during the projection period. These are primarily used in the utility because of the magnitude of the utility's electrical network, which is more significant than the industrial electric infrastructure. The best place to put the device is on the leading service or panel that feeds the facility, where it is often positioned. Because the overhead line system is operated at 25 thousand volts, adequate electrical clearance must be accounted for throughout the design and installation stages to ensure that the electrification infrastructure does not experience unnecessary flashovers between live conductors and the structure. In this method, if an overvoltage occurs (perhaps as a result of lightning strikes), the voltage can be limited to a level that is consistent with the electrical clearance values between the overhead line and structure.

The industrial segment is expected to contribute significantly during the forecast period. Increasing attention to power quality issues in industrialized economies due to widespread voltage spikes and surges will substantially impact the adoption of these units. In addition, as the economy grows and develops, electricity's part in total industrial energy consumption is expected to rise.

According to the IEA (International Energy Agency), the worldwide industrial sector consumed approximately 31.9 quadrillions Btu of electricity in 2016, and this figure is expected to rise to nearly 37.2 quadrillions Btu by 2024.

REGIONAL INSIGHTS

The regional analysis of the global market has been done across five key regions, including North America, Europe, Asia Pacific, South America, and the Middle East & Africa.

Asia Pacific holds the largest share in the global market. Electricity demand is surging, and utilities in these countries are investing in transmission and distribution facilities—a rise in EHV and UHV transmission investments in China and India fuel Asia pacific market growth. The region has seen exceptional growth in recent years, and this trend is projected to continue. China and India have increased their electricity generation to accommodate burgeoning populations and industrial and commercial sectors in recent years. China's energy generation climbed from 4207.2 TWh in 2010 to 7511.4 TWh in 2020. India's electricity generation increased from 937.5 TWh in 2010 to 1381.8 TWh in 2020. This increase is likely to continue in the forecast period, boosting the market in the region.

North America is held the second largest in the global market. The region's significant industrial and electrical infrastructural growth is projected to increase demand as replacements and new installations. Furthermore, North America was an early user of this technology, this critical factor in this region's stronghold in the market.

Europe expected to contribute significantly during the forecast period. European utilities are reassessing their assets and focusing on long-term sustainable business. The region's power generating, transmission, and distribution infrastructures are mature. The grid deployment business's growth will increase investments in modernizing the smart grid infrastructure due to more strict EU regulations. International Energy Agency (IEA) estimates that the EU's 2030 climate ambition plan issued in September 2020 foresees yearly grid investments of over USD 70 billion from 2021 to 2030. (more than double 2011-2020 spending).

Latin America is another potential market for surge arresters. Automation and digitalization will create a wide range of new growth avenues for market participants in this region. It is owing to the govt. Initiatives and increasing grid expansion projects have been approved for electrification in countries such as Mexico, Brazil, and others are the key factors accelerating the growth in this region.

The Middle East & Africa is expected to show significant growth in the global market. Rapid industrialization, the up-gradation of the aging electricity infrastructure, and the expansion of the power network to meet the electricity requirements are the prime driving the growth in this region.

KEY INDUSTRY PLAYERS

Key Participants to Concentrate on Technical Advancements

The global market is highly fragmented due to many regional and international key players. Most companies are concentrated on enhancing their production capabilities and investing in research & development by adding advanced features to the system. For instance, in January 2021, Hitachi ABB introduced a wireless monitor for surge arresters. These technological advancements will provide clients with quick, actionable data to ensure the reliability of their substations and electrical equipment.

List of Key Companies Profiled:

• Hitachi ABB (Switzerland)


• Siemens (Germany)


• Schneider Electric (France)


• General Electric (U.S.)


• Eaton (Ireland)


• Mitsubishi Electric (Japan)


• Toshiba (Japan)


• Hubbell (U.S.)


• Legrand (France)


• CG Power (India)


• Meidensha (Japan)


• Tripp Lite (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• November 2021 – Hitachi ABB Power Grids opened a new surge arrester factory in Xiamen, Fujian Province, east China, to address safety demand for transmission and distribution systems.


• September 2021 – Toshiba to increase Polymer-based production. Toshiba announced that its current polymer-based capacity would nearly triple by April 2022. Toshiba ESS manufactures a surge arrester that protects electricity transmission/distribution infrastructure and equipment from lightning-induced overvoltage and operates circuit breakers for Hamakawasaki Operations in Japan.


• March 2021 – Eaton has completed its acquisition of Tripp Lite, which will grow Eaton's power quality business in the Americas. Though leveraging power management technologies and services, the goal is to improve people's lives and the environment.

REPORT COVERAGE

The surge arrester market analysis research reports provide a detailed analysis of the market and focus on key aspects such as leading companies and the application. Besides this, the report offers insights into the surge arrester market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.

REPORT SCOPE & SEGMENTATION