Static VAR Compensator Market Size, Share & COVID-19 Impact Analysis, By Type (Thyristor Based SVC, MCR Based SVC), By Component (Phase Shifting Transformer, GIS Switchgear, Control Protection System, Harmonic Filter, Thyristor Controlled Reactors (TCR), Thyristor Switched Capacitors (TSC), Advanced Thyristor Valve (ATV), and Others), By Application (Electric Utility, Railway, Metallurgy, Renewable Energy, Mining, and Others), and Regional Forecasts, 2022-2029

The global static VAR compensator market size was valued at USD 731.4 million in 2021 and is projected to grow from USD 765.1 million in 2022 to USD 984.9 million by 2029, exhibiting a CAGR of 3.7% during the forecast period. Asia Pacific dominated the global market with a share of 34.45% in 2021. The global COVID-19 pandemic has been unprecedented and staggering, with static VAR compensator experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels Based on our analysis, the global market exhibited a decline of -2.2% in 2020 as compared to 2019.

Static VAR Compensator (SVC) is mainly used to control voltage fluctuations in transmission lines and power supply quality in large industrial sectors. In recent years the adoption of SVC has increased in the railway sector to replace the existing grids and in the upcoming solar and wind stations.

COVID-19 IMPACT 

Lower Electricity Demand Disrupted the requirement for Static VAR Compensator 

Electricity demand has fallen due to the global pandemic in 2020. Major countries with high volume electricity consumption have seen a downfall in consumption during the first phase of the pandemic. According to the International Energy Agency (IEA), China's electricity demand fell by over 13% in February 2020 compared to the previous year. The sales of static VAR compensator decreased with reduced electricity demand during the pandemic.

LATEST TREND

Smart Grid Infrastructure Development Fueling the Demand for Static VAR Compensator

The SVC market has observed significant development owing to a considerable rise in smart grid infrastructure development, and smart meter roll-outs are set to boost the industry pace further. For example, in January 2022, the Department of Energy of the U.S. introduced the “Building a Better Grid” Initiative to catalyze the nationwide development of new and upgraded high-capacity electric transmission lines, as enabled by President Biden’s Bipartisan Infrastructure Law. Building a Better Grid will work with the community and industry stakeholders to classify national transmission needs and sustain the buildout of long-distance, high-voltage transmission facilities critical to reaching President Biden’s goal of 100% clean electricity by 2035 and a zero-emissions economy by 2050. Such government programs are predicted to spur SVC adoption.

Furthermore, static VAR compensators are used in railway electrification systems to regulate voltage and prevent any mishaps with the train engine. The increased electrification of the trains globally is anticipated to drive the market.

DRIVING FACTORS

Rising Copper Mining is Increasing the Demand for Dynamic Compensation Systems

The rising demand for copper requires higher production capacities at mine sites across the globe. An increasing number of greenfield mine projects are being developed across the globe. Additionally, existing brownfield mining plants evaluate the extension of their production capacities. This capacity increases the demand for electricity consumption as the drives operated in mining plants are primarily electrical drives.

Generally, the mine facilities are very often present in remote locations and connected to the general public high voltage transmission grid. Usually, harmonic filter systems or only reactive power compensation systems were fully sufficient for any power factor requirements or perhaps for mitigating any voltage/current harmonics problems in the past. But nowadays, the grid code requirements have become more restrictive than before.

In addition to any harmonic and power factor-related requirements, the control of the voltage profile becomes more important. Also, the necessity for the latency for any power factor correction measures becomes less. Due to this and to go with the newest grid code requirements, the requirement for dynamic compensation systems such as SVC, STATCOM, and TCR is increasing quickly.

Demand for more Technically Sophisticated Solutions from Utility Customers Requiring Advanced Voltage Control Devices

The increase in demand and renewables combined with aging infrastructure can cause the voltage on the grid to fluctuate, including power oscillation, harmonics, flicker phenomena, and unbalanced loads, which might impact power quality and power transfer capability.

The utility customers are now looking for more technically sophisticated solutions than in the past, including hybrid Flexible AC Transmission Systems (FACTS) solutions and networked solutions to wide area networks. With time, grid challenges are becoming more complex and demand significant engineering analysis and studies to ensure the correct solution is in situ.

Static VAR Compensator controls transmission line voltage to generate capacitive reactive power when voltage is too low and too high and makes amends for reactive power balance by absorbing inductive reactive power. Additionally, SVC provides a flexible solution with improved return on investment, rapid implementation time, minimal infrastructure investment, and low environmental impact compared to the investment required for different transmission networks.

RESTRAINING FACTORS

Growing Adoption of STATCOM May Hinder the Static VAR Compensator Market Growth in the Long Run

Many electricity transmission and distribution challenges have been observed over decades globally. To overcome those challenges, FACTS devices have gained popularity across end-use industries. STATCOM and SVCs are the most suitable FACTS devices used for voltage regulations.

Static VAR compensator is still ruling as the main controllable shunt compensation device. In terms of market growth perspective, STATCOM is higher than SVC. The primary reason behind the fast adoption of STATCOM is faster response time and better reactive power capability.

STATCOM also delivers maximum output current even at low system voltages, reducing the need for SVC component harmonic filter. The rapid adoption of STATCOM may hinder the market growth in the long run. Moreover, STATCOM possesses similar characteristics and offers a similar solution to the application, which is also a factor hindering the SVC market.

SEGMENTATION

By Type Analysis

Growing Requirement for Reactive Power for High Voltage Transmission Networks Driving Requirement for Thyristor Based SVC  

The market is categorized into thyristor based SVC and MCR based SVC based on type. Thyristor-based SVC holds the highest market share globally among all the types. The increasing demand for reactive power on high voltage electricity transmission networks is the important objective behind the maximum utilization of thyristor based SVC.

The growth prospective of magnetically controlled reactor (MCR) based SVC is less than thyristor based SVC in the long run, and the segment is anticipated to grow at a CAGR of 2.74% over the forecast period. MCR based SVC is expected to decrease its market share, whereas thyristor-based SVC is anticipated to increase its market share by 2029. Most SVCs are in the combination of thyristor, which is the primary reason behind the increase in the market share by 2029.

By Component Analysis

Increasing Requirement for Thyristor based SVC Driving Demand for Thyristor Controller Reactors (TCR)

The global SVC market is categorized into phase shifting transformer, GIS switchgear, control protection system, harmonic filter, Thyristor Controlled Reactors (TCR), Thyristor Switched Capacitors (TSC), Advanced Thyristor Valve (ATV), and others based on component. Thyristor Controlled Reactors (TCR) segment will dominate the global static VAR compensator market forecast period. This type of component is mostly utilized in extra high voltage lines for providing lagging VARs during load rejection  

Thyristor Switched Capacitors (TSC) are the second largest SVC component in terms of market value. The segment is expected to increase its market share by 1.25% over the forecast period. Advanced Thyristor Valve (ATV) is the major target segment for SVC manufacturers as the component is gaining traction in terms of utilization in HVDC transmission systems. The overall market primarily depends on Thyristor Controlled Reactors (TCR), Thyristor Switched Capacitors (TSC), and Advanced Thyristor valves (ATV) as most SVCs are in the form of these components. The phase shifting transformer segment is anticipated to increase its market share by 2029 and is expected to increase its market revenue faster than the harmonic filter segment.

By Application Analysis

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Increasing Voltage Stabilization Requirement Opening Up SVC Demand Across Utility Sector 

The global static VAR compensator market analysis is split into electric utility, railway, metallurgy, renewable energy, mining, and others based on application. Electric utility is the dominating market segment over the forecast period due to the high volume requirement for voltage stabilization across the globe. The segment comprises over one-third of the global market share.

Static VAR compensator is largely utilized by metallurgy applications such as in electric arc furnace. The segment holds the second largest market share globally and is expected to grow at a CAGR of 2.48% over the forecast period. Over the past half-decade, increasing renewable energy production, especially wind energy, has driven the demand for SVC. Moreover, in the long run, the utilization of SVC across the renewable sector will be going down due to the rapid adoption of STATCOM. Mining and other applications are expected to remain consistent over the forecast period.

REGIONAL INSIGHTS

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The market has been analyzed regionally across five main regions, North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. The market size in Asia Pacific stood at USD 252.0 million in 2021 and is anticipated to hold the largest static VAR compensator market share over the forecast period. Growth in the utility and renewable energy sector across Asian nations and the high volume requirement for grid voltage stabilization drive the regional SVC market. The region is also considered the most electricity consumable globally, where utility, renewable energy, and metallurgy application significantly contribute to the market.

Europe is the second-largest market for SVC. An upsurge in smart grid infrastructure development in nations throughout the region, along with the surging demand for renewable electricity, is driving the demand for SVC across the region. The North American SVC market is driven by rising electricity consumption across industrial, commercial, and residential sectors. The region also emphasizes on growing electricity generation from renewable sources of energy such as wind and solar. Also, the existence of key SVC players makes the region a noticeable destination. Latin America and the Middle East and Africa SVC markets are still not at par. However, leading manufacturers of SVCs, such as Siemens and GE, are engaged in numerous regional projects.

KEY INDUSTRY PLAYERS

Dominating Market Players Focusing on Thyristor-Based SVC Development

The global SVC market is fragmented, with numerous players offering flexible AC transmission systems for various applications. Chief producers already lead high-demanding regions with a maximum requirement for shut compensators. Key players are actively functioning globally and implementing organic and inorganic growth tactic to reinforce their position in the market. Few players truly focus on definite regions to cater to the surging demand for FACTS devices across the utility and renewable energy sectors.

The competition between key market players of SVC is extremely high as they target to capture maximum market share. The one with unique offerings in technology, portfolio, design, efficiency, and more will capture the maximum application attention. Again, the market is not stagnant; if one company comes up with extra benefits and advancements, the other will target more innovation. So, there is always hardcore competition among top-notch players. The leading market player is focusing on developing thyristor based SVC to satisfy the upcoming demand for renewable components. Also, they are more fixated on offering hybrid compensator systems for augmented grid stabilization.

LIST OF KEY COMPANIES PROFILED:

• Siemens (Germany)


• Hitachi Energy (Switzerland)


• Toshiba International Corporation (Japan)


• GE (U.S.)


• ABB (Switzerland)


• Mitsubishi Electric (Japan)


• Maschinenfabrik Reinhausen (Germany)


• Jema Energy (Spain)


• American Superconductor (U.S.)


• Nidec Industrial Solutions (Italy)

KEY INDUSTRY DEVELOPMENTS:

• March 2022 – Hitachi Energy announced its selection by Aker BP, the Norwegian oil and gas exploration and production company, as a technology partner for the NOAKA power-from-shore project off the Norwegian coast. To ensure smooth, reliable, and safe electricity transmission to the offshore platforms, Hitachi Energy has provided a solution combining two power quality technologies, a high-performance SVC, SVC light, and thyristor-controlled series capacitors.


• December 2021 – The power transmission & distribution division of Larsen & Toubro (L&T) on 16th December 2021 received dynamic reactive power compensator system order in Abu Dhabi. According to the announcement by the company, the order was for a 220 kV substation.


• September 2021 – Saudi Electricity Company (SEC) awarded an EPC contract to Alfanar Construction for installing SVC technology at the existing Qassim Substation located in the Central region of Saudi Arabia. The contract was signed for a value of USD 36.9 million. The contract included testing and commissioning, site inspection, construction, installation, material procurement, quality management, engineering, and design until the completion.


• August 2021 – Hitachi ABB Power Grids announced the launch of SVC Light Enhanced at CIGRE 2021. The product provided the necessary reactive power to balance the impact of renewables. It also incorporates supercapacitors, which store hundreds of megawatt seconds of energy and automatically release it within milliseconds when disturbances do, reducing reliance on conventional power plants.


• June 2020 – NR Electric announced the completion of its EPC project in Malaysia Samalaju Industrial Park. The project was delivering an HV substation with a SVC. The FACTS division of the company has shown significant growth over the past 10 years.

REPORT COVERAGE

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The research report offers an in-depth analysis of the market. It further provides details on the adoption of SVC across regions. Information on trends, drivers, opportunities, and market restraints can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players and their strategies in the market.

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