Switchgears Market Trends
Category Intelligence on Switchgears covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Global Market Outlook on Switchgears
- Asia Pacific will continue to dominate the market in terms of driving the demand for switchgears
- Growth of the power distribution equipment industry in the developing regions is being driven by the upgrades and expansion of the electrification infrastructure and the demand for industrial (electrical network in industrial plants) and Residential (power supply system of buildings) electric utilities.
- In North America and Europe, the growth is being driven by the increased proliferation of renewable energy projects
Global Switchgear Market Overview
Increasing demand for electricity in the emerging and developed countries, backed by increasing investment in infrastructure is expected to drive the switchgear market globally. However, intense price based competition is expected to affect the overall growth
Global Switchgear Market Size & Trend
The global switchgear market is expected to be driven by the increased investment in transmission and distribution infrastructure and the upgradation of ageing substation equipment. This section of the report also illustrates the global switchgear market size growth by revenue as well as the switchgear market share by region and product.
- The global switchgear market was estimated to be around $102.6 billion in 2019, and it is expected to reach $114.71 billion by 2023, growing at a CAGR of 4–6 percent during 2018–2023
- Increasing demand for electricity in the emerging and developed countries backed by increasing investment in infrastructure is expected to drive the switchgear market globally. Also, initiatives taken to upgrade ageing substations with energy efficient solutions for better performance, especially in North America and Europe is further expected to drive the switchgear demand globally
- However, price volatility in key raw materials such as copper, aluminum, steel is expected to have a significant impact on the switchgear cost as they are raw material intensive
- Local companies have significant market share in emerging economies such as India and China and give tough competition to the multinationals in terms of switchgear quality and price
- In the developed economies such as the U.S., Germany, France and UK, the switchgear market is expected to be driven by the growing demand for renewable energy.
- Power utilities form the largest end-use segment for medium and high voltage switchgears. The market growth for medium and high voltage switchgears is usually supported by the increased investment in the transmission and distribution infrastructure and upgradation of the old infrastructure
- Accounting for a dominant share of 47 percent, Asia Pacific has emerged as the largest market for switchgears globally. This is being driven by the emerging economies such as China, India, Vietnam and Indonesia which are witnessing rapid industrial and infrastructural development. In North America and Western Europe, the switchgear demand is being driven by the increased focus on renewable energy to curb carbon emissions
- Demand for low and medium voltage switchgear is being predominantly driven by the need for enhanced protection in power distribution equipment. It is also being driven by the rapid infrastructural development and urbanization being witnessed globally
Global Switchgear Market Drivers & Constraints
- Substantial investment in the emerging economies including China, India, Indonesia, Brazil on the transmission and distribution infrastructure is expected to be a major driver for the demand of switchgears
- With the rapid industrialization and urbanization across the globe, there is a substantial increase in the investment in the end-use segment for power, which is expected to support the demand for medium and low voltage switchgears
- In developed economies such as the US and other Western European nations, the switchgear demand is expected to be driven by the increased focus cleaner energy sources in order to curb carbon emissions
- Volatility in steel, copper and crude oil prices is expected to restrain the growth of switchgear globally. Such volatility in raw material prices have created pressure on the manufacturers' profit margin, due to which, some of the global players in the industry have shifted their production facilities to regions that facilitate lower cost of manufacturing as well as, have a higher demand, like China, India etc.
- Intense price based competition, especially in the emerging economies between local players and established multinationals puts immense pressure on the revenue stream of switchgear manufacturers
- Furthermore, with the lack of substantial product differentiation, price becomes an important criterion for winning contracts
Global Switchgear Supplier Analysis
- The global switchgear manufacturers like ABB, Siemens, Schneider Electric, General Electric have significant manufacturing, sales and service capabilities across the globe. They have a wide product portfolio which includes LV switchgear, MV switchgear and HV switchgear. In the medium and high voltage space, these manufacturers also offer air and gas insulated switchgears
- There are high entry barriers in the high voltage switchgear market (>33 KV) due to high technology and investment requirements. The market is dominated by global players such as ABB, Siemens, GE, Hyundai and Alstom
- Other manufacturers in the segment manufacture components such as air circuit breaker, SF6 circuit breaker, hybrid circuit breaker, gas circuit breaker, T&D equipment, switches and vacuum circuit breaker.
Regional Market Outlook
The regional market outlook section of this report details key facts and information about the regional switchgear markets. It includes market information as well as an analysis of the market maturity of each region. The rep[ort also categorises the countries within each region based on their different levels of demand and growth. These key insights provide a more detailed understanding of the current size, trends and growth rate of the regional markets.
Asia Pacific (APAC)
- Asia Pacific is the fastest growing switchgear market and has the presence of all major global players, primarily due to the lower manufacturing cost and higher end-use demand
- China is the largest market for medium voltage switchgears and has over 50 medium voltage manufacturing facilities. Majority of the suppliers manufacture MV AIS, the market penetration of MV GIS is limited to 15 percent
- In China and India, established players, such as ABB, Siemens, Schneider Electric, face stiff competition from the local players. The domestic manufacturers in China and India hold significant market shares
Europe Middle East & Africa (EMEA)
- Switchgear demand in Western Europe is primarily driven by the increased spend on renewable energy infrastructure, coupled with replacement demand for the existing infrastructure
- In the Middle East, the interconnected power grid project is expected to be a significant driver in the growth of high voltage switchgear. Saudi Arabia, followed by the UAE and Qatar, is the largest market for switchgears in the Middle East
- Lower oil prices and oversupply have affected the top line of the oil and gas companies. This has resulted in a delay in capacity expansion plans, and thus, resulted in reduced demand for medium and high voltage switchgears
North America (N.A.)
- The US is the major growth market in North America. The growth in the switchgear market is expected to be driven by the upgradation of the aging T&D infrastructure. Integration of the wind and other renewable energies is expected to increase the load flow, and thereby, increase the demand for switchgears
- All major global suppliers have switchgear manufacturing facilities and a strong distribution network in this region
Latin America (LATAM)
- The LATAM region is expected to witness high growth levels in the forecast period, primarily driven by the large number of emerging economies in the region. Majority of the economies in the region are driven by the growing industries, including oil & gas and mining
- A large part of the MV switchgears manufactured in Brazil are exported to other Latin American countries, for instance, Siemens caters to the entire Latin American switchgear market through facilities in Brazil and Colombia
- Most suppliers manufacture both air insulated and gas-insulated switchgear
Cost and Pricing Analysis
- This section of the switchgear market report provides the cost and pricing analysis of the different aspects of the market. The pricing analysis includes the switchgear components as well as consumables. It also includes the forecast for the future pricing trends for the same. The pricing of switchgears is driven not only by the input components and materials but also by labor and electricity costs. The cost and pricing analysis of the price drivers for switchgears in the US, Europe and China markets are studied individually. The price trends of electricity and labor are detailed with the projected pricing change forecast
Procurement Best Practices
The procurement best practices section of this report details the different channels of procurement in the global switchgear industry. It helps one better understand the process flow of procurement through the suppliers both local and global. The procurement process for switchgears also depends on the contract model and their parameters. The different aspects of the typical contract models and their details are also illustrated in this section of the report.