Switchgear Market Size, Share & COVID-19 Impact Analysis, By Insulation (Gas, Air, Oil, and Vacuum), By Installation (Indoor and Outdoor), By Voltage (Low, Medium, and High), By End-User, and Regional Forecast, 2020-2032

The global switchgear market size was valued at USD 105.43 billion in 2019 and is projected to reach USD 242.53 billion by 2032, exhibiting a CAGR of 6.89% during the forecast period. The switchgear market in the U.S. is projected to grow significantly, reaching an estimated value of USD 24.40 billion by 2032, driven by the focus on renewable energy integration and grid modernization.

The rapidly growing electrification need in remote areas coupled with the increasing electricity generation has positively affected the growth of various electrical equipment. The increasing targets by regional governments for delivering electricity in rural areas and rising investments in this industry are the key switchgear market trends that are projected to cater the market growth.

Switchgear is an electrical component used in a circuit to control effectively, monitor, and regulate the circuit as required. It is installed in various residential, commercial, industrial, and utility applications to ensure operational safety, cost-effective, and uninterrupted operations. They are mostly used in low, medium, and high voltage systems to handle the abnormal operating voltage network between load centers and generating stations.

Switching equipment is a combination of different types of components, such as current & voltage transformers, isolators, switches, relays, circuit breakers, fuses, and other equipment for enhancing operations. The expansion of transmission & distribution networks has increased the application of switching equipment. Asia Pacific is holding the largest market share owing to the establishments of large industries such as the manufacturing & processing industry and metallurgy industry.

COVID-19: Shut Down of Manufacturing & Processing Industries to Decline Growth

The emerging economies from Asia Pacific are investing heavily in developing power infrastructures, which require this equipment for strengthening the grid projects across the globe. As the COVID-19 spread pushes China, and then India is approaching a lockdown, it is further showcasing a decrease in the power demand from the industrial and commercial sectors. With more countries announcing lockdowns to stop the COVID-19 spread, the utility spending for investing in grid projects has declined at a faster rate. Additionally, sluggish demand due to a decrease in power investment projects across various applications because of COVID-19 has impacted the market-wide product demand.

Due to the outbreak of COVID-19, various companies in the power industry across several regions have to shut down their manufacturing sites and processing industries as countries are approaching full lockdown from preventing the spread of COVID-19. Companies across the globe have postponed their major power projects, investments, acquisitions, which has hampered the growth of the market. Furthermore, the COVID-19 pandemic had also affected the ongoing projects and future investments in the power industry.

LATEST TRENDS

Upgradation of Aging Power Infrastructure is a Prominent Trend

The increasing energy demand has led to a need for a reliable and stable T&D network. The primary reasons behind the rising number of blackouts are the lack of investments, aging infrastructure, and improper regulations for modernization of the grid. New regulations for reducing the power blackouts and upgrading the aging power system infrastructure across the globe are creating a potential opportunity for the growth of the market.

Rising Integration of Smart Monitoring and Control Units across Power Grid Infrastructure is a Current Trend

A switching equipment is designed by integrating advanced smart monitoring and control units, digital solutions, and other features for incorporating in the power grid infrastructure. Increasing investments for sustainable power generation technology will further accelerate the demand for this type of equipment. Hence, the increasing adoption of switching equipment equipped with advanced features is a new trend that would accelerate the market growth in the forecast period.

DRIVING FACTORS

Exponentially Growing Industrial Infrastructure to Boost Global Market

The growing energy demand to strengthen rapid urbanization and increasing awareness for the new generation mix is estimated to propel the industry growth. These equipment is primarily used in complex electrical substations and industries to withstand varying operating voltages, along with high environmental conditions to maintain the stability of the voltage. Infrastructural developments are propelling the usage of switching components in commercial applications. The construction and upgradation of new industrial structures such as power plants, banks, government offices, and other commercial buildings will further drive the market growth.

Positive Outlook for Generating Renewable Power to Fuel Growth

The growing investments in developing renewable energy along with favorable government regulations and subsidies to support the new technology are projected to bolster the industry landscape. For instance, the European Union is approaching to achieve its 2020 target by producing 20% energy using renewables, which has enabled countries to introduce various rollouts and planned installation of renewable energy. Growing measures to eliminate the overall carbon footprint coupled with the increasing awareness among consumers for adopting renewable energy generation, which includes solar, wind, and hydropower, will accelerate the application of switching equipment. Bulk power generation plants using onshore & offshore solar, wind, and hydro sources are anticipated to build new T&D lines, which would propel the application of switching components.

RESTRAINING FACTORS

Harsh Environmental Conditions & High Cost of Switchgear Equipment to Hinder Growth

The harsh environmental conditions which include temperature, pressure, and humidity, along with water leakage from the ground, are some of the prominent factors which can affect the efficiency of electrical switchgear equipment that are usually installed in an outdoor location. Hence, to cater to the atmospheric conditions, regulatory organizations formulated stringent regulations and specifications for achieving higher reliability and feasibility. This equipment includes advanced features and an  IoT based control system, which makes the cost of it higher. It delivers a complete solution that is complex and expensive. Therefore, the high capital investment in the switchgear industry and the harsh environmental conditions may hamper the market growth in the coming years.

SEGMENTATION

By Insulation Analysis

Gas Segment to Show High Growth Owing to Increasing Application of Gas-Insulated Switchgear (GIS)

Based on insulation, the market is segmented into gas, air, oil, and vacuum. The vacuum segment is expected to hold the larger part of the market during the forecast. It uses a combination of vacuum, solid, and air instead of Sulfur hexafluoride (SF6) as an isolation layer to minimize the overall carbon emission and readily maintains the power supply systems. The equipment with gas as an insulating medium is set to experience the highest growth rate due to the increasing setup of variable voltage substations. Air-insulated switchgear (AIS) is mostly used in industrial & utility applications and consists of air as the insulating medium in the protective equipment. Oil insulated equipment uses oil as an insulating medium which is toxic and can cause various health issues. Hence, the combustibility nature of oil insulated switchgear limits its applications.

By Voltage Analysis

Wide Scope Application of Medium Range Voltage Switchgear Equipment to Drive Segment

Based on the voltage, the market is segmented into low, medium, and high. The low voltage segment is estimated to have a significant growth across the world owing to the wide deployment in distribution networks along with the high fault enduring capacity. This equipment is generally categorized up to a rating of 1 kV and is extensively used in residential and commercial applications.

The medium and high voltage segments are projected to exhibit the largest growth in the industry dynamics. Growing industrialization is boosting the medium voltage switchgear segment, resulting to the increased demand for the components. It offers a wide working range and is generally rated between 3 kV and 36 kV capacities for use in building and industrial infrastructures. High voltage equipment are used for voltage rating above 36 kV and hence are used by utilities industries in power plants, substations, and transmission purposes.

By Installation Analysis

Sustainable Operation in Harsh Atmospheric Conditions to Augment Outdoor Installation Segment

Based on the installation, the market is divided into indoor and outdoor locations. The outdoor installation segment is set to generate a high market share owing to its ability to sustain in harsh climatic conditions along with delivering reliable and economical operations. The indoor segment is projected to grow substantially due to its compact design, high durability, easy maintenance, safe & secure working, and other operational advantages. The location criteria are predominantly decided by the weather and ventilation conditions along with functional characteristics.

By End-User Analysis

T&D Utility Segment to Dominate Backed by Increasing Energy Demand

Based on end-user, the global market is categorized into T&D utility, industrial, and commercial & residential. A significant introduction of power distribution facilities to cater to the increasing energy demand and enhancing energy efficiency to minimize losses and hazardous incidents will increase the share of the transmission & distribution (T&D) utility segment. An increasing focus on building substations and grid strengthening projects would bring the utility to invest in T&D infrastructure. The growing population shift from rural to urban areas along with investments in the construction of new housing buildings, as well as commercial projects is set to positively affect the residential & commercial segment during the projected period.

REGIONAL INSIGHTS

Geographically, the global market is distributed across five regions, namely, North America, Europe, Asia Pacific, Middle East and Africa, and Latin America. North America is expected to show a considerable growth owing to the increasing investments in the commercial & industrial sectors. The introduction of supportive government initiatives and favorable directives and targets to develop a sustainable energy mix has accelerated the sale of the witching equipment. The United States and Canada are the key countries operating in the region.

Asia Pacific is anticipated to hold a larger switchgear market share of the global market. The presence of a huge potential for building large industrial plants coupled with the rapidly developing residential & commercial sectors is projected to contribute to the regional growth. Developing countries such as China, India, and South Korea are experiencing excessive energy demand due to the growing need for the transmission & distribution of electric power and electrification projects. According to India Brand Equity Foundation (IBEF), an increasing electrification would drive the growth of power consumption to 1,847 TWh in India by 2022. Other prominent nations present in Asia Pacific are Japan, Australia, and the Southeast Asian countries, which would also contribute to the growth rate of the industry in the coming years.

Europe is projected to exhibit a significant growth in the global industry. Stringent regulations formulated by the European Union to incorporate the generation of clean energy along with the long-standing transmission & distribution networks will favor the regional outlook. European Union implemented an energy and climate framework to achieve its targets from 2021 to 2030 to gain approximately 32% of the overall energy generation with clean sources by 2030. Germany, Italy, Spain, the United Kingdom, France, and other countries from Europe would contribute to the growth of the switching equipment industry in the projected period.

The rising need for electrification along with an increasing energy demand from the gulf countries, as well as expanding industrial & commercial infrastructure will positively uphold the Middle East and Africa market size. Inaccessibility to electricity in rural and remote locations would uptick the necessity to initiate electrification projects which drive the market size. The region is broadly categorized into South Africa, Gulf Cooperation Countries (GCC), and other nations.

KEY INDUSTRY PLAYERS

Key Market Players Would Continue to Shape International Industry Trends through Mergers

Various regional and international participants are operating in the market. Major companies are focused on undergoing different mergers & acquisitions to strengthen their positions. Recently, ABB acquired GE Industrial Solutions to expand its reach and leverage new growth opportunities in various regions.

LIST OF KEY COMPANIES PROFILED:

• ABB (Zurich, Switzerland)


• Schneider Electric (Rueil, Malmaison, France)


• Hitachi (Tokyo, Japan)


• Kirloskar Electric Co. Ltd. (Pune, India)


• Mitsubishi Electric (Tokyo, Japan)


• Siemens Energy (Munich, Germany)


• Hubbell Incorporated (Connecticut, United States)


• Toshiba International Corporation (Texas, United States)


• CG Power and Industrial Solutions Limited (Mumbai, India)


• Fuji Electric Co., LTD. (Tokyo, Japan)


• Powell (Texas, United States)


• L&T Electrical & Automation (Mumbai, India)


• HYUNDAI ELECTRIC & ENERGY SYSTEMS CO., LTD. (South Korea)


• Hyosung Corporation (Seoul, South Korea)


• Lucy Electric (Oxford, UK)


• E+I Engineering (Donegal, Ireland)

KEY INDUSTRY DEVELOPMENTS:

• In August 2019: MHI Vestas Offshore Wind signed an agreement with Mitsubishi Electric Europe B.V. and Taiwanese manufacturer Shihlin Electric Co. for providing high voltage switchgear by 2022.


• In July 2019: Eaton announced to acquire the U.S. based Innovative Switchgear Solutions, Inc. to introduce advanced medium voltage products in North America. This acquisition would help customers with compact, low maintenance, and highly configurable solutions.


• In November 2018: Siemens achieved a contract to provide gas-insulated switchgear with clean air and vacuum switching technology for 145 kV in Norway. These products provide switching and arc-extinguishing functions more reliably and efficiently.

REPORT COVERAGE

The switchgear market research report includes a detailed analysis of the global market research, dynamics, and competitive landscape. Various key insights presented in the research report are the price trend analysis, recent industry developments in the global market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key retail industry trends, competitive landscape and company profiles.

Report Scope & Segmentation