Gas Insulated Switchgear Market

Gas Insulated Switchgear: Enhancing Power Distribution Efficiency

Gas Insulated Switchgear (GIS) is a state-of-the-art technology revolutionizing power distribution systems. It provides a compact, reliable, and efficient solution for controlling and protecting electrical power transmission networks. GIS is widely used in substations, industrial facilities, and urban areas where space is limited and the demand for uninterrupted power supply is critical.

GIS employs sulfur hexafluoride (SF6) gas as an insulating medium to isolate and control electrical circuits. SF6 has excellent dielectric properties, enabling GIS to withstand high voltages and effectively reduce electrical losses. By encapsulating the active components in a gas-tight enclosure, GIS offers enhanced insulation, reducing the risk of electrical faults and ensuring operator safety.

One of the key advantages of GIS is its compact design. Traditional air-insulated switchgear requires substantial space, making it impractical for densely populated areas. In contrast, GIS occupies significantly less space, enabling efficient installation in urban environments and reducing the overall footprint of substations. This space-saving characteristic makes GIS particularly suitable for retrofitting existing infrastructure, optimizing space utilization, and facilitating future expansions.

Another significant benefit of GIS is its exceptional reliability. The gas insulation of GIS eliminates the risks associated with atmospheric conditions, such as moisture and dust, which can cause performance degradation and breakdowns in traditional switchgear. GIS provides superior protection against environmental factors, ensuring a stable and uninterrupted power supply. Additionally, the sealed enclosure of GIS prevents internal arcing, further enhancing its operational reliability and minimizing maintenance requirements.

GIS also offers enhanced operational flexibility and automation capabilities. With advanced monitoring and control systems, GIS enables remote operation and monitoring of switchgear, improving system reliability and reducing response times to faults. Furthermore, GIS supports intelligent features, such as real-time monitoring of parameters, fault diagnostics, and predictive maintenance, optimizing asset management and extending equipment lifespan.

In terms of environmental impact, GIS excels in sustainability. SF6 gas used in GIS has a high global warming potential (GWP), raising concerns about its environmental impact. However, advancements in GIS technology have led to the development of eco-friendly gas mixtures with reduced GWP. Manufacturers are actively investing in research and development to find alternative insulating gases that minimize greenhouse gas emissions, aligning GIS with global environmental regulations and sustainability goals.

Government policies and regulations play a crucial role in promoting the adoption of GIS. Many countries have recognized the benefits of GIS in improving power distribution efficiency, reducing transmission losses, and enhancing grid reliability. Governments incentivize the installation of GIS through various initiatives, including financial subsidies, tax incentives, and regulations favoring the use of compact and environmentally friendly switchgear solutions.

Dynamics of Gas Insulated Switchgear Market

Drivers in Gas Insulated Switchgear Market

The rise in renewable energy-based capacity addition is a significant driver for the global gas insulated switchgear (GIS) industry. With support from governments and aggressive net-zero objectives declared by countries worldwide, the renewable energy sector is expanding rapidly. Countries like China, aiming for carbon neutrality by 2060, have set ambitious goals for wind and solar PV capacity, driving the adoption of GIS. Additionally, the European Union is expected to surpass its existing renewable capacity growth projections, as member countries increase auction volumes and consumers install more solar panels.

The adoption of smart grids and innovative metering technologies is another driver for the GIS market. Advancements in technologies like artificial intelligence have led to the modernization of electricity grid infrastructure, and government initiatives to innovate smart grid infrastructure further contribute to market growth. The deployment of various electrical equipment in smart grids also fuels the demand for GIS. Furthermore, increasing investments in transmission and distribution networks, such as in Saudi Arabia's power sector, to meet the growing electricity demand further propel market growth.

Restraints in Gas Insulated Switchgear Market

However, stringent regulations on SF6 gas emissions pose a restraint to the market. SF6 gas is used as an insulating and arc-quenching medium in GIS substations. While it allows for compact switchgear design and has non-flammable properties, SF6 is classified as a potent greenhouse gas with high global warming potential. Regulatory agencies are implementing measures to limit SF6 emissions and scrutinizing its use due to environmental concerns. As F-gas rules become stricter, the impact on SF6 will affect the gas insulated switchgear market.

These factors collectively shape the global gas insulated switchgear industry, with the growth potential driven by renewable energy adoption and the need for smart grid infrastructure, while the market is restrained by regulations targeting SF6 gas emissions.

Opportunities in Gas Insulated Switchgear Market

Increased Investment in Industrial Production

The COVID-19 pandemic caused significant disruptions in industrial production, leading to production stoppages and the postponement of new projects and expansion plans. However, as pandemic restrictions are gradually lifted worldwide, industrial production is gradually recovering. The International Monetary Fund (IMF) reported a global GDP decline of 3.1% in 2020 but recorded a growth of 4.9% in the following year. According to the United Nations Industrial Development Organization (UNIDO), global industrial production showed a stable year-over-year output growth of 4.2% last year, driven primarily by emerging industries in the Asia-Pacific (APAC) region, particularly in India and China. This situation indicates promising opportunities for gas-insulated switchgear (GIS), which plays a critical role in ensuring power safety and regulation in industrial environments.

The increasing global population and urbanization have resulted in a surge in electricity demand. GIS offers several advantages over conventional air-insulated switchgear, including higher reliability, a smaller footprint, and superior performance in harsh environments. These factors are expected to drive the demand for GIS in the coming years. The global shift towards renewable energy sources such as wind and solar power is driving the need for a more efficient and reliable power transmission and distribution infrastructure. GIS can contribute to improving the efficiency and reliability of the renewable energy grid, presenting significant opportunities for the GIS market. Moreover, the aging power transmission and distribution infrastructure in many countries requires replacement or refurbishment. This represents a substantial opportunity for the GIS market, as GIS can provide a more compact and reliable solution for infrastructure modernization. The adoption of smart grid technology, which involves integrating advanced communication and control technologies into the power grid, is on the rise. GIS can facilitate the implementation of smart grid initiatives by offering a more reliable and efficient means of power transmission and distribution.

Challenges in Gas Insulated Switchgear Market

Gas Insulated Switchgear (GIS) presents several challenges that impact its widespread adoption, including cost considerations and environmental concerns. While GIS offers numerous advantages, its higher initial cost compared to conventional air-insulated switchgear (AIS) can pose a barrier, especially in developing countries where budget constraints are a significant concern.

The capital expenditure (CAPEX) involved in GIS is influenced by various factors. The manufacturing process and the utilization of expensive components, such as switching elements, circuit breakers, and transformers, increase the procurement cost. Additionally, the need for housing all these components within a single chamber filled with a dielectric gas further adds to the overall expenses. As a result, the cost of GIS equipment is higher due to the comprehensive enclosure design. Furthermore, the Intergovernmental Panel on Climate Change (IPCC) has identified SF6 gas, used in GIS as a dielectric medium, as one of the most potent greenhouse gases. Despite concerns about its environmental impact, SF6 gas currently offers unparalleled effectiveness, making it challenging to find a suitable alternative. Strict regulations against SF6 gas usage further constrain the growth of the GIS market and contribute to elevated procurement costs. In the event of internal damage, the cost of repairing or replacing GIS components tends to be higher compared to AIS.

Apart from cost considerations, GIS faces environmental challenges. The use of SF6 gas, while providing excellent insulating properties, has raised concerns due to its high global warming potential. Efforts are underway to reduce the reliance on SF6 in GIS applications. However, finding equally effective alternatives remains a significant challenge. The regulatory landscape for GIS is complex, with different countries having varying regulations regarding SF6 usage. This variation in regulations can create challenges for manufacturers and users of GIS equipment, impacting the adoption and standardization of the technology.

To address these environmental concerns, initiatives are being taken to reduce SF6 usage in GIS. For example, the European Union has set a target of reducing SF6 usage by 80% during the forecast period. Such regulatory actions are expected to have a substantial impact on the GIS market in Europe, influencing manufacturers and driving the development of more environmentally friendly alternatives.

In conclusion, the adoption of Gas Insulated Switchgear faces challenges related to its higher initial cost compared to conventional alternatives and concerns about the environmental impact of SF6 gas. Efforts are being made to reduce SF6 usage and develop eco-friendly alternatives, but finding equally effective substitutes remains a complex task. As regulatory measures continue to evolve and technological advancements progress, the GIS market is expected to address these challenges, promoting wider adoption and improved sustainability in the power distribution sector.

Ecosystem of Gas Insulated Switchgear Market

The indoor segment of the gas insulated switchgear market is projected to experience the highest compound annual growth rate (CAGR) during the forecast period. The demand for uninterrupted power supply is a significant driver for the growth of indoor gas insulated switchgears. Industries, particularly manufacturing facilities and assembling plants, are adopting indoor gas insulated switchgears to ensure a reliable power network.

On the other hand, the outdoor segment of the market is driven by its various applications in power transmission, large power unit development, and the transmission of ultra-high voltage power to different industries. The installation of outdoor gas insulated switchgears is typically done in substations and switchyards, where ample space is available, contributing to market growth. Moreover, investments in transmission and distribution networks to meet the increasing electricity demand further support the growth of the outdoor segment.

In terms of configuration, the hybrid segment holds the largest market share during the forecast period. The demand for hybrid gas-insulated switchgear is driven by its unique features. This configuration incorporates a three-position disconnecting and earthing switch, providing safety and compactness. Additionally, hybrid gas-insulated switchgear can be quickly installed on-site, offering convenience. The key advantages of hybrid gas-insulated switchgear include reliable performance, advanced intelligence, and minimal maintenance requirements. These factors contribute to the dominance of the hybrid segment in the gas insulated switchgear market.

The demand for SF6-free switchgear is being propelled by the increasing need for environmentally friendly products across various commercial and industrial sectors. Growing consumer awareness about the harmful effects of Sulphur hexafluoride has led to the development of reliable, efficient, and sustainable switchgear alternatives, which are expected to drive market growth.

Furthermore, many leading players in the industry are actively focused on developing green solutions to meet current and future energy requirements. For example, Schneider Electric has introduced a new environmentally friendly medium voltage switchgear called SM AirSeT. This innovative switchgear utilizes pure air and vacuum technology instead of SF6 for secondary electric distribution.

The surge in demand for ultra-high voltage power is anticipated to be driven by rapid urbanization and increased investments in electrical transmission infrastructure. Large thermal substations and nuclear power plants require voltages above 220kV for efficient power transmission and distribution, which is expected to fuel the growth of this segment. Additionally, the expansion of power generation substations in emerging economies will play a vital role in driving the growth of this segment.

Among the end-users, the power distribution utilities segment is the largest and is projected to grow at the highest compound annual growth rate (CAGR) during the forecast period. Power distribution utilities encompass both non-renewable and renewable energy sources to meet the electricity demand. The growing adoption of renewable energy sources for power generation necessitates the upgrade of existing infrastructure to facilitate seamless integration of electricity from renewable sources. Developing economies are striving for complete electrification, resulting in extensive efforts to expand the current infrastructure. These factors are expected to drive the growth of power distribution utilities.

Regional Insights

Asia Pacific Dominates the Gas Insulated Switchgear Market

The gas insulated switchgear (GIS) market is anticipated to be dominated by the Asia Pacific region during the forecast period. According to the International Monetary Fund (IMF), the economy of Asia Pacific is projected to grow by 4.9% during this period. The COVID-19 pandemic had a significant impact on the region's economy in 2020, leading to a decline of approximately 2.2% last year. This resulted in a substantial reduction in energy demand. However, with the lifting of lockdown measures and the resumption of industrial and manufacturing sectors, the region has experienced a rebound in energy demand.

Furthermore, the increasing population in the Asia Pacific region has put a strain on housing infrastructure, necessitating a focus on expanding public housing. This, in turn, drives the demand for gas insulated switchgear as it plays a crucial role in the efficient and reliable distribution of electricity in housing and industrial sectors. The sustained growth in all major industrial sectors in Asia Pacific is expected to further propel the demand for gas insulated switchgear throughout the forecast period.

The Europe GIS market is also projected to witness significant growth, with a compound annual growth rate (CAGR) of around 10% between 2021 and 2026. The African GIS market is expected to grow at a CAGR of approximately 7.75% during the same period. Similarly, the South American GIS market is forecasted to grow at a CAGR of around 7.3%, while the North American GIS market is expected to grow at a CAGR of approximately 8.5% during the period of 2021-2026.

These growth rates reflect the increasing demand for reliable and efficient power distribution solutions across different regions. As economies continue to develop and industries expand, the need for advanced electrical infrastructure, including gas insulated switchgear, becomes paramount. Governments and industry players are investing in upgrading and expanding their power transmission and distribution networks, driving the growth of the GIS market in these regions.

In conclusion, while the Asia Pacific region is expected to dominate the gas insulated switchgear market, other regions such as Europe, Africa, South America, and North America are also witnessing significant growth. The increasing energy demand, population growth, and investments in infrastructure development are key factors contributing to the expanding market for gas insulated switchgear globally.

Dominating Companies in Gas Insulated Switchgear Market

• ABB
• SCHNEIDER ELECTRIC
• GENERAL ELECTRIC
• SIEMENS
• EATON CORPORATION
• MITSUBISHI ELECTRIC
• HITACHI
• HYUNDAI ELECTRIC
• FUJI ELECTRIC
• CG POWER AND INDUSTRIAL SOLUTIONS
• NISSIN ELECTRIC
• MEIDENSHA CORPORATION
• POWELL INDUSTRIES
• HYOSUNG HEAVY INDUSTRIES
• TOSHIBA ENERGY SYSTEMS & SOLUTIONS CORPORATION
• LUCY ELECTRIC
• ELEKTROBUDOWA
• CHINT
• SEL S.P.A.
• ILJIN ELECTRIC
• Alstom
• Bharat Heavy Electricals Limited
• Larsen & Turbo
• Ormazabal

Recent Developments in Gas Insulated Switchgear Market

• In July 2022, Schneider Electric, a global specialist in energy management and automation, announced the acquisition of a major stake in ILJIN Electric Co., Ltd., a leading provider of gas insulated switchgear (GIS) solutions based in South Korea. This strategic partnership aims to strengthen Schneider Electric's presence in the GIS market and enhance its product portfolio to meet the growing demand for reliable and sustainable electrical solutions.
• In April 2021, Hitachi ABB Power Grids, a global technology leader in power grids and electrification, signed a strategic partnership agreement with BHEL (Bharat Heavy Electricals Limited), a leading Indian public sector engineering company. The collaboration focuses on manufacturing and supplying state-of-the-art gas insulated switchgear (GIS) systems for various applications in the Indian market. This partnership combines Hitachi ABB Power Grids' expertise in GIS technology with BHEL's manufacturing capabilities, aiming to meet the increasing demand for advanced electrical infrastructure in India.
• In February 2020, Siemens AG, a global technology conglomerate, announced the acquisition of C&S Electric Limited, an Indian manufacturer of electrical and electronic equipment, including gas insulated switchgear. This acquisition expands Siemens' portfolio of low-voltage power distribution products and solutions, allowing them to provide a comprehensive range of offerings to customers in India and other emerging markets.
• In November 2019, General Electric (GE) Renewable Energy announced a partnership with TGOOD, a leading electrical equipment manufacturer, to deliver high-voltage gas insulated switchgear (GIS) solutions for the global offshore wind industry. The collaboration aims to provide efficient and reliable electrical infrastructure for offshore wind farms, enabling the integration of clean energy into the grid.
• In October 2018, Mitsubishi Electric Corporation, a global leader in electrical and electronic equipment, announced a joint venture with Toshiba Corporation to establish a new company called TMEIC Corporation. This joint venture combines the strengths of both companies in the field of power transmission and distribution, including gas insulated switchgear. The collaboration aims to enhance product development and expand business opportunities in the global market.
• In September 2021, ABB, a global technology company specializing in electrification, automation, and digitalization, announced the acquisition of ASTI Mobile Robotics Group, a leading provider of autonomous mobile robots and advanced logistics solutions. This acquisition aims to enhance ABB's portfolio of electrification solutions, including gas insulated switchgear, by integrating ASTI's robotics expertise for efficient and flexible material handling in industrial settings.
• In August 2021, Siemens AG and Switchgear Power Systems LLC (SPS) announced a joint venture agreement to establish a new company called Siemens Switchgear LLC. The joint venture combines Siemens' expertise in gas insulated switchgear technology with SPS's manufacturing capabilities, aiming to provide innovative and reliable electrical solutions for various industries, including power generation, transmission, and distribution.
• In May 2021, Hitachi ABB Power Grids and GE Renewable Energy Grid Solutions announced a strategic partnership to jointly develop and market high-voltage direct current (HVDC) solutions for offshore wind grid connections. The collaboration combines Hitachi ABB Power Grids' expertise in HVDC technology and gas insulated switchgear with GE Renewable Energy's experience in offshore wind projects, aiming to accelerate the deployment of clean energy and strengthen grid connectivity.
• In February 2020, Mitsubishi Electric Corporation and Hitachi, Ltd. announced a partnership to merge their power distribution and transmission businesses into a new joint venture company. The joint venture, named "Mitsubishi Electric Hitachi Power Systems, Ltd.," aims to enhance their capabilities in the energy sector, including gas insulated switchgear, by leveraging their complementary technologies and resources.
• In November 2019, Schneider Electric announced the acquisition of the electrical distribution division of Larsen & Toubro Limited (L&T), an Indian multinational conglomerate. This acquisition strengthens Schneider Electric's position in the Indian market and expands its portfolio of electrical products, including gas insulated switchgear, to cater to the growing demand for reliable and sustainable energy solutions.

In conclusion, Gas Insulated Switchgear is revolutionizing power distribution systems with its compact design, exceptional reliability, operational flexibility, and environmental sustainability. GIS enables efficient utilization of limited space, ensuring uninterrupted power supply in urban areas. With advanced monitoring and control capabilities, GIS enhances operational efficiency and enables predictive maintenance. As governments continue to support the adoption of GIS through policies and incentives, its significance in modern power infrastructure is set to grow, driving advancements in the field and contributing to a more sustainable and efficient energy future.