Switchgear Market Definition
The switchgear market consists of sales of switchgear and related services by entities (organizations, sole traders and partnerships) that produce switchgear that are used in various applications such as in transmission and distribution utility, residential, commercial and industrial settings.
Switchgear refers to a collection of switching devices including electrical disconnect switches, fuses or circuit breakers, which are used for controlling, protecting, and switching the electrical circuits and equipment. Under fault conditions, it detects the fault and interrupts the flow of electricity to the affected section, thereby isolating it from the healthy circuit
Switchgear Market Size
The global switchgear market reached a value of nearly $96.9 billion in 2019, having increased at a compound annual growth rate (CAGR) of 5.9% since 2015. The market is expected to decline from $96.9 billion in 2019 to $82.1 billion in 2020 at a rate of -15.3%. The decline is mainly due to lockdown and social distancing norms imposed by various countries and economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 7.5% from 2021 ad reach $113.5 billion in 2023.
Growth in the historic period resulted from rise in power consumption, favorable government initiatives, and economic growth in emerging markets. Factors that negatively affected growth in the historic period were political uncertainties and geopolitical tensions, and susceptibility to hacking.
Going forward, increasing demand for electricity, growing use of electricity in transportation, investments in renewable energy, increasing demand for electricity from manufacturing, interest rates, replacement of old switchgears, and load management and balance will drive the growth. Factors that could hinder the growth of the switchgear market in the future include volatility in raw material prices, environmental regulations, and COVID-19 pandemic.
Switchgear Market Drivers
The key drivers of the switchgear market include:
Increasing Demand For Electricity
The growing demand for electricity is expected to be a key driver of the switchgear market in the forecast period. This can be attributed to rising populations and increasing demand for electrical and electronic appliances, especially in developing countries such as China, India, Brazil and some African countries. Global electricity demand is projected to grow from 25,000 TWh in 2017 to 38,700 TWh by 2050, an increase of 57%.i Emerging economics such as China and India will account for a major portion of this growth. Electricity consumption in India is expected to grow at a CAGR of 7.1% during 2017 to 2022.ii Furthermore, the global household appliances manufacturing market is expected to grow from $334.3 billion in 2019 to $402.93 billion in 2023 at a CAGR of 4.8%iii, supporting the demand for residential switchgears market, going forward.
Switchgear Market Restraints
The key restraints on the switchgear market include:
Volatility In Raw Material Prices
Volatility in raw material prices is expected to limit the growth of the market in the forecast period. Copper, steel, and silver are the major raw materials used in manufacturing switchgear and they constitute around 75% of the total manufacturing costs. Prices of raw materials such as steel are highly volatile and are dependent on several factors such as world economic activity, strength of US dollar, trade tariffs, and several other political and environmental factors. Steel prices are expected to increase in the near future owing to the adverse effects of the COVID-19 pandemic and supply chain interruptions. Volatile prices will negatively affect the market for switchgear in the forecast period.
Switchgear Market Trends
Major trends influencing the switchgear market include:
Digital Switchgear
Companies are increasingly manufacturing digital switchgear especially in the low voltage switchgear market. Digital switchgears use the collected information to analyze the performance of current levels, temperature, operating cycles, and load levels that helps in improving the performance and reliability of switchgears. Smart switchgears allow grid optimization, improve quality, and reduce both transmission and operating losses. For instance, in April 2018, the ABB group launched SafeGear digital to its digital switchgear portfolio. SafeGear digital is based on the optimized integration of current and voltage sensors into medium voltage switchgear. It is combined with the capability of the IEC 61850 standard for communication and the latest Relion protection and control relays.iv Furthermore, in 2019, the ABB group introduced low-voltage digital switchgear that monitors and enables safe, flexible, and smart electrical distribution. Digital switchgear is expected to gain popularity in the low voltage switchgear market.v
Technological Advancements In Gas-Insulated Switchgears (GIS)
Consumers are preferring technologically advanced or innovative gas-insulated switchgears. To cater the rising demand for technologically advanced gas-insulated switchgears, manufacturers are launching a range of products. For instance, in December 2018, Schneider Electric, a European multinational company engaged in providing energy and automation digital solutions delivering efficiency and sustainability, announced the launch of CBGS-0, industry-leading gas-insulated switchgear. CBGS-o is the latest addition to the Schneider Electric’s portfolio of innovative medium voltage switchgear solutions that comes with solid dielectric busbar for applications up to 38 kilovolts, 2,000 A and 31.5kA. It is designed to meet the need for indoor substations which serve an important purpose for the development of industry and the broader trend of urbanization. CBGS-o finds its uses in heavy industries including chemical, mining, petrochemicals, utilities, water and wastewater facilities, traction substations, data center, and wind farms. vi
In addition to this, in September 2018, ABB installed the latest innovation high-voltage direct current (HVDC) gas-insulated switchgear in a European Union (EU) test project, established to address the benefits and challenges of creating a large-scale meshed wind energy transmission grid in the North Sea. Hence, the launch of innovative and technologically advanced gas insulated switchgears is a prevalent trend in the switchgear market.
Opportunities And Recommendations In The Switchgear Market
Opportunities- The top opportunities in the switchgear market segmented by product type will arise in the low voltage market segment, which will gain $8.0 billion of global annual sales by 2023. The top opportunities in the switchgear market segmented by end user will arise in the industrial segment, which will gain $4.8 billion of global annual sales by 2023. The switchgear market size will gain the most in the China at $4.4 billion.
Market-trend-based strategies for the switchgear market include focusing on digital technologies, focusing on developing innovative products to meet the changing requirements of the power generation industry, investing in eco-efficient solutions for minimizing the impact on the environment, deploying Internet of Things (IoT) enabled switchgears for automated operations and energy management, promoting automated switchgear within power generation and transmission industries to adopt smart grid operations, and developing and promoting specialized switchgear for critical industries. Player-adopted strategies in the switchgear market include strengthening presence through contracts and agreements, upgrading manufacturing facilities to increase the production, and boosting business through acquisitions and mergers.
Recommendations – To take advantage of the opportunities, the business research company recommends the switchgear companies to focus on developing smart switchgears, focus on developing digital switchgears, take initiatives to use renewable energy, focus on expanding manufacturing base in low-cost countries, set up authorized distribution channel, scale up through collaborations, offer competitive pricing, use direct-to-consumer (DTC) advertising, organizing events and campaigns, increasing visibility through a high-performance website and focus on fast-growing end-use industries.
Switchgear Market Segmentation
The switchgear market is segmented by type of product, by end user and by geography.
By Type Of Product-
The switchgear market can be segmented by type of product
- a. Low Voltage
- b. Medium Voltage
- c. High Voltage
The low voltage market was the largest segment of the switchgear market segmented by product type, accounting for 49.5% of the total in 2019. Going forward, the medium voltage segment is expected to be the fastest growing segment in the switchgear market, at a CAGR of 4.3%.
By End User –?
The switchgear market can be segmented by End User
- a. Industrial
- b. Utilities
- c. Residential
- d. Commercial
- e. Switchgear
The industrial market was the largest segment of the switchgear market segmented by end user, accounting for 28.6% of the total in 2019. Going forward, the industrial segment is expected to be the fastest growing segment in the switchgear market, at a CAGR of 4.05%.
By Geography -
The switchgear market is segmented into
- o North America
- o Western Europe
- o Asia Pacific
- China
- India
- Indonesia
- Australia
- South Korea
- Japan
- o Eastern Europe
- o South America
- o Middle East
- o Africa
Asia Pacific was the largest region in the global switchgear market, accounting for 45.3% of the total in 2019. It was followed by Western Europe, North America, and then the other regions. Going forward, the fastest-growing regions in the switchgear market will be Eastern Europe, and Africa, where growth will be at CAGRs of 8.0% and 6.5% respectively. These will be followed by Asia Pacific, and the Middle East, where the markets are expected to grow at CAGRs of 6.4% and 5.0% respectively.
Switchgear Competitive Landscape
Major Competitors are:
- • ABB Ltd
- • Schneider Electric
- • Siemens AG
- • Mitsubishi Electric Corporation
- • Eaton Corporation Inc
Other Competitors Include:
- • Hitachi Ltd.
- • Toshiba Corporation
- • Hyundai Electric & Energy Systems Co., Ltd.
- • Larsen & Toubro Limited
- • Havells India Limited
- • LS ELECTRIC Co. Ltd.
- • Hyosung Heavy Industries
- • Meidensha
- • Fuji Electric
- • Nissin Electric
- • Shihlin Electric
- • CHEM
- • Fortune Electric
- • CG Power and Industrial Solutions Limited (Crompton Greaves)
- • ABB Xiamen Switchgear Co., Ltd.
- • Orecco Electric
- • Tamco
- • GE T&D India Ltd
- • Legrand India Private Limited
- • Schneider Electric Infrastructure Limited
- • Anchor Electricals Pvt Ltd
- • Bharat Heavy Electrical Limited
- • Tenaga Switchgear
- • Lucy Electric
- • Eaton Corporation
- • Alan Electrical Limited
- • Twyver Switchgear
- • Alstom
- • SwitchGear Company NV (SGC)
- • Electroshield Samara
- • IZVA
- • LLC
- • SIVAR
- • S&C Electric Company
- • Powell Industries
- • G&W Electric
- • Noja Power
- • Abunayyan Holding Company
- • TIEPCO
- • KFB Holding Group
- • Afcon
- • Wahah Electric Supply Company of Saudi Arabia Ltd. (WESCOSA)
- • BMC Manufacturing
- • Actom
- • Matelec Group
- • Egyptian German Electrical Manufacturing Co