“Rising implementation of electrification initiatives to position medium voltage switchgear as a critical electrical equipment”
During events of electrical surges, effective switchgear consisting of fuses, circuit breakers, and switches is required to automatically interrupt power flow and isolate the electrical equipment to protect it from damage. Medium voltage switchgear, in particular, demonstrates a significant application potential in such situations, due to its capability to ensure normal switching operation and short circuit interruption, among other benefits.
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The rising implementation of initiatives to power un-electrified households in both rural and urban areas is one of the prominent factors bolstering the medium voltage switchgear market growth. According to the power ministry of India, till 31st March 2022, as many as 28.2 million households had been electrified under its flagship Saubhagya scheme, one of the largest residential electrification drives worldwide. Developments like these are, in turn, augmenting the need for medium voltage switchgear components to ensure efficient power supply.
Furthermore, the European Commission unveiled plans to reduce reliance on fossil fuels and ramp up clean energy capacity in the EU. In total, it envisaged extra investment of nearly $220.87 billion between 2022 and 2027 and proposed an increase of its current target from 40% to 45% by 2030, thus proliferating the adoption of MV switchgear for renewable power systems.
Increase in funding to develop nuclear power plants and substations
Medium-voltage circuit breaker switchgear is continuing to play a major role in modern electrical networks, including power generating stations, transmission and distribution substations, and load centers. Over the years, there has been a growing emphasis on boosting the development of new nuclear power stations worldwide.
In January 2022, the UK government announced nearly $124.8 million in funding to support the continued development of nuclear power stations. The government also made up to $2.1 billion of direct funding available for developing a large-scale nuclear power project. These initiatives could augment the deployment of medium voltage certified switchgear to satisfy critical requirements of nuclear plants, including their resistance to high degradation caused by humidity.
Additionally, a considerable increase in investment to upgrade electrical substations has been observed in prominent regions like South Africa. To cite an instance, in March 2022, the Msunduzi Municipality received over $965,072 in grant funding to upgrade and refurbish the Eastwood primary substation, which cost Msunduzi nearly $4.5 million to build. Initiatives such as these could add impetus to medium voltage switchgear industry development for power substation applications.
Rapid installation of microgrids and expansion of offshore wind capacity in America
Microgrids are gaining massive popularity as a reliable electric system and climate change solution with energy cost reduction attributes. Several public benefit corporations in America have been consistently installing new microgrid systems over the years. For instance, in October 2021, New Sun Road announced the installation of 10 Stellar Integrated Systems in 10 days. These solar-powered microgrids of over 3-kW to 5-kW each were installed to power digital community centers in the Guatemalan highlands, which could consequently assert a positive influence on the business growth of microgrid medium voltage switchgear suppliers.
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As a part of the commitment to the Paris Agreement, the Joe Biden administration pledged to cut greenhouse gas emissions by half of the 2005 levels by 2030 in the U.S. Under this commitment, plans to develop offshore wind farms producing 30-GW of electricity by 2030 were proposed, which would be enough to power above 10 million homes. Furthermore, the administration is targeting to unlock more than 100-GW of capacity by 2050.
Since the safety and reliability needs for MV equipment are higher in offshore wind development than the onshore counterparts, the increasing target to boost offshore wind power capacity could generative lucrative growth opportunities for the medium voltage switchgear market over the forthcoming years.