HVDC Converter Station Market Size, Share & Industry Analysis, By Type (Monopolar, Bi-Polar, Back-to-Back, and Multi-Terminal), By Technology (Line Commutated Converter and Voltage Sources Converters), By Power Rating (Low Power (Below 1000 MW) and High Power (Above 1000 MW)), and Regional Forecast, 2024-2032

The global HVDC converter station market size was valued at USD 12.82 billion in 2023. The market is projected to grow from USD 13.68 billion in 2024 to USD 30.41 billion by 2032, exhibiting a CAGR of 10.50% during the forecast period.

HVDC converter stations are crucial for integrating renewable energy sources, such as wind and solar energy, into the grid. They enable the efficient transmission of power over long distances, connecting remote renewable energy generation sites to urban centers and industrial areas. The market is mainly driven by the rising demand for long-distance power transmission with minimal losses and the integration of renewable energy sources into existing power grids.

Many countries are investing in upgrading their power grids to enhance efficiency, reliability, and flexibility. HVDC technology plays a vital role in modernizing grids by enabling asynchronous interconnections between different regions, improving grid stability and resilience. For instance, in October 2023, the U.S. Department of Energy awarded a USD 50 million grant to Minnesota Power to renovate its high-voltage direct current transmission system. Hence, it is ready to serve future energy demands while enhancing the resilience and dependability of the regional grid.

The economic downturn caused by the COVID-19 pandemic led to delays or postponement in utility investments in new HVDC transmission line projects. For instance, the Saudi Arabia-Egypt power line project was hindered by COVID-19 pandemic. Egypt’s electricity interconnection project with Saudi Arabia was delayed because of the pandemic. The Egyptian Electricity Transmission Company postponed the reception of bids for the power line project for up to 60 days. All contracts were planned to be inked before the end of May 2020. Such projects directly affected the market growth.

HVDC Converter Station Market Trends

Expansion in Renewable Energy to Propel Market Growth

Renewable energy sources, such as wind and solar, often require transmission over long distances from remote locations with high resource potential to urban centers or industrial areas where electricity demand is high. HVDC converter stations are well-suited for transmitting power over long distances with minimal losses compared to traditional AC (Alternating Current) transmission lines. As renewable energy capacity increases, so does the demand for HVDC infrastructure to efficiently transmit this power.

HVDC converter stations play a crucial role in interconnecting renewable energy resources across regions or countries. By linking geographically dispersed renewable energy projects, HVDC systems enable better utilization of renewable resources and help balance fluctuations in generation due to factors like weather variations. Interconnecting renewable resources also enhances grid stability and reliability. Overall, the expansion of renewable energy is expected to continue driving the HVDC converter station market growth, with increasing investments in transmission infrastructure to facilitate the integration of renewable resources into the grid and support the transition towards a more sustainable energy future. For instance, on January 25, 2023, Invenergy selected Siemens HVDC technology for the largest US wind transmission project. The agreement gives impetus to the initial phase of the USD 7 billion, 5GW Grain Belt Express, which will deliver clean power from wind-rich Kansas to Missouri. It will support the final integrated design of the HVDC converter station situated in Ford County, Monroe, U.S.

Technological Advancement in the HVDC Converter Station to Drive the Market Development

VSC-based HVDC converter stations offer several advantages over traditional line-commutated converter (LCC) stations, including better controllability, lower harmonic distortion, and the ability to connect to weak AC systems. Advancements in VSC technology have led to improvements in efficiency, reliability, and performance, driving increased adoption of HVDC transmission systems. MMC technology has gained prominence in HVDC converter stations due to its ability to handle higher voltages and currents, improved fault tolerance, and reduced harmonic distortion. MMC-based HVDC systems offer enhanced grid stability, increased power transfer capability, and smoother voltage control, driving market growth, particularly for high-voltage applications.     

Advanced digital control and monitoring systems play a crucial role in optimizing the operation and performance of HVDC converter stations. Innovations in control algorithms, real-time monitoring, and predictive maintenance enable operators to improve grid stability, maximize efficiency, and minimize downtime. Digitalization also facilitates the integration of HVDC systems with renewable energy sources and smart grid technologies, driving market growth.

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HVDC Converter Station Market Growth Factors

Growing Demand of HVDC for Long-Distance Power Transmissions is Driving the Market Growth

One major benefit of HVDC is the efficiency of power transmission over long distances. If the transmission line route is longer than the break-even distance, D.C. is a better alternative, as A.C. lines have more line losses than D.C. for bulk power transfer.

In addition, HVDC transmission has major advantages compared to conventional alternating current (A.C.) lines, counting greater efficiency over long distances, lower costs at distances, and the ability to attach asynchronous systems. Moreover, one of the major factors why high-voltage D.C. has less energy losses over transmission lines is that high-voltage A.C. has much more "capacitive" losses than D.C. power, especially when conductors are closer to the ground. Hence, DC power is inherently more efficient to transmit, especially underwater and underground, than A.C. electricity.

So far, many top suppliers are deploying HVDC converter stations to improve transmission line power supplies. For instance, On March 29^th, 2023, Siemens Energy, in a consortium with FATA, part of the Danieli group, secured a contract worth approximately ~USD1.07 billion from the Italian transmission system operator (TSO) Terna to supply four converter stations for the Tyrrhenian Link project in Italy.

The project aims to transmit electricity between the islands of Sicily and Sardinia and the Italian mainland through a 970 km-long double underwater high-voltage (H.V.) cable. Siemens Energy will provide the high-voltage direct current (HVDC) transmission technology for the power link, which can exchange up to 1GW for each interconnection.

Rising Cross-Border Transmission Projects is Driving the Market Growth

Implementation of HVDC has increased in recent years due to the requirement for power generation in several economies. Many countries are strategically partnering with one another for better future opportunities. Heavy projects are in a boom to facilitate the import/export of electricity between neighboring countries. This practice has been in use for decades. For instance, the South Asian Association for Regional Cooperation (SAARC) republics signed the SAARC Framework Agreement Energy Cooperation (Electricity) in the year 2014, which lets the member states carry out Cross Border Trade of Electricity subject to laws, rules, and regulations of the respective member states.

In recent years, this has been heavily implemented in some countries, which is driving the market growth. This also leads to several benefits like enhanced energy security through resource sharing and improved grid stability by connecting diverse energy sources. Northwestern Europe trade is one of the models where increased cross-border transmissions reduced complete system costs and CO2 emissions, and Northern clean energy producers benefitted.

Moreover, in recent, in 2023, Hitachi Energy, a global technology leader, announced it won an order from Electricity Interconnection France-Spain, the joint venture carrying together operators of the Spanish French (RTE) and (Red Eléctrica) electricity transmission networks, in charge of the construction and commissioning of all cross-border connections between both nations, to supply four high-voltage direct current (HVDC) converter stations to interconnect France and Spain via a subsea cable across the Biscay Gulf.

RESTRAINING FACTORS

High Initial Investment Costs and Strict Regulatory Act as Restraints for the Market Growth

HVDC converter station is one of those technologies that require higher initial cost owing to the deployment of the whole system. HVDC system includes several tools and devices that are required for the long run. Devices such as converter units, converter valves, converter transformers, filters, and others, are some of these tools that cost a lot. It enhances the initial cost of the overall HVDC station converter projects.

For instance, according to the U.S. Energy Information Administration, the HVDC transmission system cost depends on several factors such as type of transmission medium (land‐based or submarine), power capacity to be transmitted, access to easements rights‐of‐way (ROWs), environmental considerations, and cost of converter stations and related equipment. Based on a review of recent proposals and relevant regulatory filings (2017), the cost of HVDC projects ranges between USD 1.17 million to USD 8.62 million per mile. Furthermore, one of the biggest challenges in the application of HVDC is government regulatory issues. In general, it is hard to limit common pricing for HVDC owing to the unique projects and regulatory delays, fluctuations in material costs, etc.

HVDC Converter Station Market Segmentation Analysis

By Type Analysis

Long Distance Transmission of Electricity has propelled the Adoption of Bi-polar Converters

Based on type, the market is segmented into monopolar, bi-polar, back-to-back, and multi-terminal.

The bi-polar segment dominates the market. Many regions are undergoing grid modernization efforts to improve efficiency, reliability, and integration of renewable energy sources. HVDC systems, including bi-polar converters, are often employed to facilitate the long-distance transmission of electricity with reduced losses compared to traditional AC systems. Bi-polar HVDC converters enable the interconnection of asynchronous AC grids, which may have different frequencies or phases. Interconnecting grids allows for better utilization of resources, improved grid stability, and enhanced resilience against disruptions.

The back-to-back segment is the second leading segment in the market. It is expected to dominate in upcoming years as several projects are deploying B-to-B HVDC converter stations. For instance, ABB secures orders from Chubu Electric Power in Japan. ABB will supply its system engineering, VSC technology called HVDC Light, and digital solutions with ABB Ability MACH control and protection system. With 300MW capacity each, the two new back-to-back blocks will be constructed on an existing site with an existing HVDC back-to-back.

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By Technology Analysis

Line Commutated Converters Dominates the Market Due to its Use in HVDC Systems Owing to Their Reliability and Performance

Based on technology, the market is segmented into line commutated converters and voltage sources converters.

Line commutated converters (LCC) holds the dominant share in the market as it has been widely used in HVDC systems for several decades and have a proven track record of reliability and performance. Utilities and grid operators may prefer LCC technology due to its established reliability, especially for large-scale, long-distance transmission projects. Overall, the increasing adoption of LCC-based converter stations in the HVDC market is driven by their proven reliability, high voltage capacity, cost-effectiveness, grid stability benefits, and compatibility with existing infrastructure.

The voltage sources converters segment is the second leading segment in the market. VSC-based HVDC systems offer enhanced controllability compared to Line Commutated Converter (LCC) systems. VSCs can independently control active and reactive power, allowing for better dynamic response to grid conditions, voltage fluctuations, and frequency variations. This increased controllability is especially beneficial for integrating renewable energy sources and improving grid stability.

By Power Rating Analysis

High Power Segment to Lead Due to its Capability to Transmit Large Amounts of Electricity Over Long Distances

Based on power rating, the market is segmented into low power (Below 1000 MW) and high power (above 1000 MW).

The high power (above 1000 MW) segment dominates the market. High-power HVDC systems are ideal solution for transmitting electricity over long distances with minimal losses. Thus, its installation for connecting remote renewable energy sources, like offshore wind farms, to urban or industrial areas is gaining traction in the recent years.

Low power (Below 1000 MW) is the second leading segment in the market. With the increasing adoption of distributed generation technologies, such as rooftop solar panels and small-scale wind turbines, there is a growing need to integrate these decentralized energy sources into the grid efficiently. Low-power HVDC converter stations enable the integration of distributed generation by facilitating power exchange between local generation units and the main grid.

REGIONAL INSIGHTS

The global market has been analyzed in five key regions, including North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

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Asia Pacific dominated the HVDC converter station market share. The Asia Pacific region, including countries such as China, India, Japan, South Korea, and Southeast Asian nations has been experiencing rapid economic growth and industrialization. This growth has led to increased demand for electricity to power industries, infrastructure, and urbanization projects, driving the need for efficient and reliable transmission infrastructure, such as HVDC converter stations.

Europe is the second dominating region in the market. Europe is aggressively transitioning toward renewable energy sources to meet its climate goals. HVDC converter stations play a crucial role in integrating large-scale renewable energy projects, such as offshore wind farms in the North Sea and solar farms in southern Europe, into the grid. These converter stations enable efficient transmission of renewable energy over long distances to population centers.

North America will most probably dominate the HVDC converter station market in the coming years, driven by the rising transmission line projects in the U.S. and Canada. Several developing states and cities are also improving their energy-distributing sources by integrating with renewable sources.                                

KEY INDUSTRY PLAYERS

Leading Market Players Are Taking Up Technological Innovation To Improve Efficiency & Reliability

Hitachi Energy, General Electric, Siemens, Mitsubishi, and others are some of the leading companies in the HVDC converter station market. These companies have been indulged in technological innovation to improve efficiency & reliability of the product, strategic partnerships to expand market reach, and a focusing on renewable energy integration to meet the growing demand for sustainable energy solutions. These companies are also involved in large-scale infrastructure projects and global networks to offer comprehensive HVDC solutions for cross-border transmission and grid stability.

Hitachi Energy is one of the major players active in the market. It pioneered commercial HVDC technology around 70 years ago and has catered to half of the world's HVDC projects. Some of the recent developments of Hitachi Energy are as follows: On November 09, 2023, Hitachi Energy, a world technology leader, announced it won a project to provide Taesa, one of Brazil’s largest private electric energy transmission groups, with a wide upgrade of the Garabi high-voltage direct current (HVDC) converter station in Brazil. The project link can transmit up to 2,200 megawatts of electricity, building it the most powerful “back-to-back” HVDC system on the globe.

Additionally, other key participants operating in the industry include Siemens, Toshiba, and General Electric, among others.

List of Top HVDC Converter Station Companies:

• General Electric  (U.S.)


• Siemens (Germany)


• Mitsubishi Electric Corporation (Japan)


• NR Electric Co. (China)


• Toshiba Corporation (Japan)


• Hyosung Heavy Industries Corporation (South Korea)


• Hitachi Energy Ltd. (Switzerland)


• CEPRI- China Electric Power Research Institute (China)


• BHEL (India)


• LS Electric Co., Ltd. (South Korea)

KEY INDUSTRY DEVELOPMENTS:

• In December 2023, GE Vernova and MYTILINEOS, a Greece-based Industrial company, will provide the engineering works and technology for the two VSC HVDC converter stations, which form the terminals for the HVDC cable and convert the direct current to alternating current, enabling the transmission of electricity into the onshore transmission network.


• In November 2023, Hitachi Energy, a world technology leader, announced that it won a project to provide Taesa, one of Brazil’s largest private electric energy transmission groups, with a wide upgrade of the Garabi high-voltage direct current (HVDC) converter station in Brazil. The project link can transmit up to 2,200 megawatts of electricity, building it the most powerful “back-to-back” HVDC system on the globe.


• In October 2023 - Mitsubishi Electric Corporation was given a contract by J-Power Transmission Network Co., Ltd. to source a 300MW Voltage Source Converter (VSC) and High Voltage Direct Current (HVDC) Transmission for the Shin-Sakuma Frequency Converter Station in Japan's main island. The system is predicted to be in service by the end of March 2028.


• In July 2023, McDermott, an engineering services provider for the energy industry, began construction work on TenneT’s 980MW high-voltage direct current (HVDC) transmission project, BorWin6, in the German North Sea. The electricity generated at sea can be fed into TenneT’s converter platform, where the alternating current (AC) is converted into direct current (DC) at the converter station. McDermott secured the contract as part of a consortium that also includes the Global Energy Interconnection Research Institute and C-EPRI Electric Power Engineering.


• In January 2023, Invenergy selected Siemens HVDC technology for the largest US wind transmission project. The agreement gives impetus to the initial phase of the $7bn, 5GW Grain Belt Express, which will deliver clean power from wind-rich Kansas to Missouri. Siemens Energy will support the final integrated design of the HVDC converter station situated in Ford County, Monroe, U.S.

REPORT COVERAGE

The report provides a detailed analysis of the market and focuses on key aspects, such as leading companies, type, technology, and power rating of the product. Besides, the report offers insights into the latest market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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