With green issues such as climate change and carbon emissions gaining prominence everyday, there is a greater emphasis on power generation from renewable sources. High voltage direct current (HVDC) is the only viable technology for offshore wind farms, as electric power transmitted through underwater cables is not possible with alternating current (AC). HVDC has potential benefits for the emerging super grid, as it can mitigate the effects of intermittency by averaging the outputs of wind and solar farms.
New analysis from Frost & Sullivan (energy.frost.com), European Smart Grid Market - Advanced Component, finds that the HVDC market earned revenues of €550 million in 2008 and estimates this to reach €973.7 million in 2015. Project cost estimates are inclusive of cable, cable installation, converter, station construction, management and technical support, risk insurance.
"Harmonisation of electrical grids is a major step in complete grid automation," says Frost & Sullivan Senior Research Analyst Vikas Ravindran. "The rise in offshore wind and solar farms has resulted in the logical move of opting for HVDC for electrical power transmission, which is set to become the norm". HVDC is the only viable technology for offshore wind farms as electric power is transmitted through underwater cables which is not possible with AC. HVDC has potential benefits for the emerging super grid as they can mitigate the effects of intermittency by averaging the outputs of wind and solar farms.
HVDC technology has been in use for more than three decades, and is primarily used for bulk power transmission. When used for long-distance power transmission, HVDC has been less expensive and has lower electrical losses compared to AC. The European electricity market is moving towards homogeneity of its electricity networks with the announcement of 28 projects, out of which sixteen are complete.
However, problems such as high cost of technology and the inability to be used for shorter distances are retarding the growth of HVDC. Government intervention plays a major role in determining the success of a HVDC project concerning smooth electricity trade off between any two regions.
"Although the lower line construction cost is an advantage, the high costs of the components continue to be a major hurdle," explains Vikas. "If the cost of the systems is brought down significantly, the demand can be expected to increase."
The total cost advantage can be realised only when the cost of technologies used is at par with the existing AC systems. Retrofit projects are another alternative, which major market participants should capitalise on, as most of the existing HVDC systems are more than two decades old.
"Overhauling is the next big opportunity for market participants and work is already on to replace the existing systems," concludes Vikas. "Recently, there has been a renewed interest in projects that were decommissioned earlier due to lack of funding or inappropriate technology."
European Smart Grid Market - Advanced Component is part of the Energy & Power Growth Partnership Services programme, which also includes research in the following markets: European Smart Meter Markets, United States Smart Grid Market, and United States Smart Meter Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
If you are interested in more information on this study, please send an email to Chiara Carella, Corporate Communications, at chiara.carella[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.
European Smart Grid Market - Advanced Component / M521