Flexible Ac Transmission Systems (facts) Market Opportunities And Challenges

By Author: Marketsandmarkets
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The FACTS market is projected to reach USD 1.5 billion in 2025 from USD 1.2 billion in 2020; it is expected to grow at a CAGR of 5.4% during the forecast period.

FACTS devices are employed across the world to cater to high power quality and network reliability needs. This has led to an increased demand for STATCOM. STATCOM is a power electronic device that uses commutated devices such as GTO and IGBT to regulate reactive power flow through a power network, thereby increasing the stability of a power network. STATCOM is used to stabilize the network voltage in order to keep it constant at a set reference value. The increasing demand for electricity, growing need for renewable electricity generation, rising stringent regulations by regulatory authorities pertaining to power quality, and increasing need for upgrading aging transmission infrastructure are among the factors driving the growth of the STATCOM market, which would, in turn, boost the growth of the FACTS market.

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COVID-19, a deadly respiratory disease that originated ...
... in China, has now become a global pandemic. The industrial and commercial demand for electricity is low for the time being and the supply of components is witnessing disruptions owing to the pandemic. Also, the research and development and new product launches related to FACTS are expected to get postponed. Many manufactures are witnessing supply chain issues due to global lockdowns, and thus are opting for alternate solutions, which are feasible but add additional cost. For instance, the AMSC suppliers are adversely impacted by the COVID-19 pandemic. As a result, the company is facing delays or difficulty in sourcing products, which could negatively affect its business and financial results. Even if the company finds alternate sources for such products, it may cost more, which could negatively impact the profitability and financial condition. All the above-mentioned parameters are expected to have a potential negative impact on the growth of the FACTS market in 2020. However, it is expected that the economic condition of various countries such as India, the US, China, and others will gradually return to normal within the next few months, ensuring a regular supply of FACTS with improvement in the situation.

India is the fastest-growing market for FACTS in APAC owing to the large investment in transmission projects. Further, the Indian government is planning to invest USD 1.8 billion in renewable energy transmission projects. PGCIL proposes to set up a transmission network with an investment of USD 810 million in Gujarat and Maharashtra. The projects would support 13.5 gigawatts of wind energy capacity and 3 gigawatts of solar power capacity. This is expected to drive the FACTS market in the country.

The European market for FACTS is also expected to witness significant growth during the forecast period. In January 2020, ABB’s Power Grids business finished the installation of the hybrid static compensator (STATCOM) to an electricity transmission system operator (TSO), TenneT, which operates the Dutch and a large chunk of Germany’s high-voltage power grids. Also, in May 2020, GE Renewable Energy’s Grid Solutions business energized the Dynamic Reactive Compensator (DRC) project for National Grid in the UK. This project is a part of the largest utility-grade STATCOM scheme in Europe.

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Europe led the global market in 2019 in terms of size and revenue generated from FACTS applications. Presence of key manufacturers such as ABB, Siemens, Infineon, and Ingeteam is one of the key factor driving the regional growth as these manufacturers provide FACTS devices to a large number of electricity transmission projects in Europe. Presently, the UK is the largest consumer of FACTS in Europe. Rising industrial production and expanding population are increasing the demand for electricity across the European countries. This, in turn, results in the growth of the FACTS market in this region. Further, government regulations regarding carbon-free power transmission and grid code in Europe are expected to drive the FACTS market in this region.