Market Trends of Shunt Reactor Industry
This section covers the major market trends shaping the Shunt Reactor Market according to our research experts:
Variable is Expected to Hold Significant Growth
- Variable Shunt Reactors (VSR) are utilized in high voltage energy transmission systems to stabilize the voltage during load variations. A traditional shunt reactor is equipped fixed rating and is connected to the power line all the time or switched in and out depending on the load. The rating of a VSR could be changed in steps. The maximum regulation range depends on the capability of the on-load tap changer used in combination with the regulation winding used for the shunt reactor. The maximum regulation range has risen over the years, from 50%, now up to 80% at some voltage levels. The variability brings more benefits compared to a traditional fixed shunt reactor. The VSR can continuously compensate reactive power as the load varies, which secures the voltage stability.
- Various countries globally are increasingly focusing on the renewable energy sector for reducing its power consumption costs. For instance, in 2019, the UK's renewable industry's energy outpaced fossil fuel plants in 137 days during the year (the greenest year in the United Kingdom). Owing to such growing renewable energy investments in the region, the shunt reactor vendors are also focusing their offerings to the industry requirements. Siemens in the United Kingdom has built one of the most significant variable shunt reactors featuring a rating of 120-300 MVAr and a rated voltage of 220 kV, weighing 317 metric tons and measuring approximately 10x8.5x8 meters.
- The European Project of Common Interest (PCI) target is to optimize the efficiency of the Croatian and Slovenian electricity transmission grids through the application of advanced technologies. In December 2019, the ELES substation in Divača had been equipped with a variable shunt reactor, in collaboration with Siemens. As per the contract, Siemens supplied and installed a variable shunt reactor (VSR) 0f 150 Mar. In August 2019, HOPS and Siemens signed EUR 5 million contracts as part of the Sincro.Grid project. The agreement deals with deploying a variable shunt reactor at transformer station TS 400/220/110 kV Melina, as part of the implementation of the EU-backed smart grid project Sincro.Grid.
- In March 2020, DIMO, with Siemens, signed a contract with Ceylon Electricity Board (CEB) to embark on the National Transmission and Distribution Network Development and Efficiency Improvement Project for enhancing national power supply in Sri Lanka. Habarana grid substation, Chunakam grid substation, and Naula grid substation projects are some of the major projects completed by DIMO-Siemens collaboration, redefining the local power sector. Habarana- Veyangoda grid substation, Variable Shunt Reactor Projects in Anuradhapura, and Mannar are some ongoing projects by DIMO and Siemens.
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Asia-Pacific is Expected to Witness Fastest Growth
- The investments in upgrading Transmission and Distribution infrastructure in the Asia-Pacific region are increasing due to continued growth in electricity demand from domestic and business sources in the region. For instance, to meet the demand of China’s cities and industrial zone electricity, the State Grid Corporation of China (SGCC) is building 12 electricity transmission lines linking the coal production and hydropower centers for a project valued USD 33.7 billion. According to China’s state grid company, the line can transmit up to 12 gigawatts, which is enough to power 50 million Chinese households.
- According to the South Asia Regional Initiative for Energy Integration program, March 2020 report states that the South Asian power grid requires an investment of INR 45,000 by 2030 as cross border electricity trade is projected to increase in the region. In April 2019, under the aid of Development Bank of Kazakhstan JSC, a subsidiary of “Baiterek” NMH” JSC, production of high-voltage transformers and shunt reactors, was launched in Shymkent. The products will be supplied to the markets of the CIS countries, Iran, Afghanistan, and Pakistan. According to representatives of Alageum Electric Company, the capacity of the enterprise is 120 transformers per year.
- India is one of the primary countries in the Asia-Pacific region, home to various manufacturing industries whose energy needs are increasing rapidly. According to the International Energy Outlook report by EIA 2019, India’s industrial energy consumption nearly triples by 2050, growing from 16 quadrillion British thermal units (Btu) in 2018 to 47 quadrillion Btu by 2050 at an average annual rate of 3.4%. Moreover, the country is observing significant investments in the expansion and upgradation of its existing transmission and distribution network. For instance, according to the Ministry of Power, India, the electricity generated in India increased from 922.3 billion kilowatt-hours in 2016 to 1050.3 billion kilowatt-hours in 2019.
- In July 2019, ABB and the Chongqing municipal people’s government signed an investment agreement to build a manufacturing base for transformers in Chongqing’s area. The plant will manufacture a power transformer, shunt reactor, and HVDC converter transformer. The rising demand for renewable sources of power generation has led to the various power projects across the region, providing a significant boost to the shunt reactors market. For instance, Japan has invested USD 2.75 billion to power the Fukushima region with 100% renewable energy by 2040. Owing to such developments, governments and private firms operating in the region are expected to undertake various projects to update their existing power distribution and transmission infrastructure.
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