U.S. HVDC Transmission System Market Size, Share & COVID-19 Impact Analysis, By Type (High-Power Rating Projects and Low-Power Rating Projects), By Application (Subsea, Underground, Overhead, and Mixed), By Technology (Line Commutated Converter (LCC) and Voltage Source Converter (VSC)), and Country Forecast, 2023-2030

The U.S. HVDC transmission system market size was worth USD 1.27 billion in 2022 and is projected to grow at a CAGR of 6.52% during the forecast period. 

The demand for both enormous renewable energy integration and passive network supply is frequently increasing. Additionally, global energy interconnection has become progressively popular. As a crucial solution, a High Voltage Direct Current (HVDC) transmission system can offer a favorable approach to passive networks and distributed renewable energy. It can also simply attain grid interconnection. Therefore, the need for HVDC transmission systems is increasing, encouraging the demand for multi-terminal HVDC transmission systems. These systems play a crucial role in combining renewable energy sources, such as offshore wind farms and solar power plants, into the grid. As the worldwide focus on clean and sustainable energy escalates, the need for HVDC technology is expected to continue to grow.

The COVID-19 pandemic prompted widespread remote working, which presented challenges for project management and coordination. Delays in decision-making and communication affected the progress of HVDC projects.

LATEST TRENDS

Growth of Offshore Wind Farms to Drive Market Growth

The growth of offshore wind farms is a remarkable driver for the U.S. market. Offshore wind farms are typically located far from the coastline in areas with strong and consistent wind resources. Offshore wind farms are often situated several kilometers away from the coastline, and transmitting power over long distances using traditional AC transmission lines would result in significant transmission losses. HVDC transmission, on the other hand, experiences lower losses over long distances, making it effective for offering electricity from offshore facilities to onshore substations. HVDC transmission systems are well-suited for underwater cable installations, known as submarine cables. Compared to overhead AC lines, submarine cables have less impact on the environment. They are visually appealing, which is important when transmitting power from offshore wind farms located near populated coastal areas or ecologically sensitive regions.

DRIVING FACTORS

Technological Advancements in HVDC Transmission Systems to Drive Market Growth

Technological advancements in HVDC transmission systems drives the U.S. HVDC transmission system market growth. These advancements have brought remarkable improvements in the efficiency, reliability, and cost-effectiveness of HVDC technology, making it more attractive for various applications. Some of the key technological advancements that are driving market growth comprise VSC-based HVDC systems, which have gained popularity due to their enhanced controllability and flexibility. VSC-HVDC permits bidirectional power flow, fast response to grid conditions, and the ability to regulate reactive power. These features are particularly beneficial in combining renewable energy sources with fluctuating output, such as wind and solar power. Advancements in control and protection technologies have enabled the implementation of HVDC grids and multi-terminal systems. HVDC grids involve the interconnection of multiple HVDC lines, allowing for efficient power transfer and enhancing grid stability. Multi-terminal systems facilitate complex power flow management and enable power exchange between multiple points, such as interconnecting different regions or integrating offshore wind farms.

RESTRAINING FACTORS

High Initial Investment Cost to Hamper Market Growth 

Due to the substantial upfront costs, potential investors may perceive HVDC projects as risky. The viability of these projects depends on factors, such as government incentives, financing options, and projected revenue streams over time. High initial investment costs may discourage some investors from committing to such projects. Raising funds for large-scale HVDC projects can be challenging, mainly in regions where the regulatory and financial frameworks are not well-established. In other words, securing long-term financing with favorable terms can be difficult due to the perceived risks related to large capital expenditures. High initial investment costs may lead to delays in the implementation of HVDC projects. This delay can further hinder the expansion of HVDC transmission infrastructure and its ability to meet the increasing energy demands.

SEGMENTATION

By Type Analysis

Based on type, the market is segmented into high-power rating projects and low-power rating projects. The low-power rating projects segment held a larger U.S. HVDC transmission system market share in 2022. Many offshore wind farms are located far from the mainland, and HVDC transmission allows efficient power transfer over long submarine cables with lower losses. HVDC links are used to interconnect power grids on islands where traditional AC transmission might not be as practical or economical. These systems can help stabilize and control power flow in interconnected AC grids, enhancing overall grid reliability.

By Application Analysis

Based on application, the market is segmented into subsea, underground, overhead, and mixed. The overhead segment held a larger share in 2022 owing to the rising usage of overhead transmission lines (typically high-voltage pylons) to carry the HVDC power lines. These overhead lines can span long distances and are commonly used for land-based transmission projects.

By Technology Analysis

Based on technology, the market is segmented into line commutated converter (LCC) and voltage source converter (VSC). The line commutated converter (LCC) held the largest share in 2022. LCC-based HVDC systems have been in operation for several decades and have a proven track record of reliability and performance. Many existing HVDC projects across the globe use LCC technology. LCC-based HVDC systems are generally cost-effective for long-distance transmission projects and applications where there is a need for high power capacity.

KEY INDUSTRY PLAYERS

In terms of the competitive landscape, the market depicts the presence of established and emerging HVDC transmission system companies. In the U.S., Siemens AG dominated the U.S. market in August 2023. Siemens AG secured a contract to provide a high voltage direct current transmission system for New York’s first utility-scale offshore wind project, Sunrise Wind, in cooperation with Aker Solutions.

Some of the other companies with a considerable presence in the U.S. market include ABB, Siemens AG, Hitachi Ltd., NKT A/S, LS Electric, Nexans, Prysmian Group, Toshiba Corporation, and Mitsubishi Electric Corporation.

LIST OF KEY COMPANIES PROFILED:

• ABB (U.S.)


• Siemens AG (U.S.)


• Hitachi Ltd. (U.S.)


• General Electric (U.S.)


• Toshiba Corporation (U.S.)


• NKT A/S (U.S.)


• Prysmian Group (U.S.)


• Nexans (U.S.)


• LS Electric (U.S.)


• Mitsubishi Electric Corporation (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• March 2023: LS Power declared that they preferred LS Power Grid California, LLC to construct, finance, function, and maintain two new projects to assist electric dependability in California, the Metcalf - San Jose B HVDC project and the Newark- Northern Receiving Station HVDC project. CAISO organized the Metcalf project and Newark project to strengthen the electrical grid in and throughout San Jose, improve reliability, and expand access to profitable, renewable electricity.                    


• January 2023: Nexans and SuperGrid Institute conducted a transient overvoltage test on a 525kV DC cable system in line with the modern high voltage direct current recommendations. The DC cable system, offered and installed by Nexans, proficiently passed various sequences of damped oscillating voltage tests at both 350 Hz and 6 kHz utilizing SuperGrid Institutes’ high voltage testing provision.


• March 2021: GE Renewable Energy’s Grid Solutions and Sembcorp Marine won an agreement to supply Sofia with a modern HVDC transmission system. The HVDC transmission system produces Sofia’s second-largest contract. It will comprise the manufacture, design, installation, and commissioning of the onshore converter station and offshore converter platform comprising all ancillary equipment.

REPORT COVERAGE

The market research report provides a detailed analysis of the market. It focuses on key aspects such as an overview of the technological advancements, the prevalence of HVDC transmission systems in the U.S., and pricing analysis. Additionally, it includes information about new product launches, key industry developments such as mergers, partnerships, acquisitions, and the impact of COVID-19 on the market. Besides this, the report also offers insights into the market trends and highlights key industry dynamics. In addition to the aforementioned factors, it encompasses several factors that have contributed to the growth of the market over recent years.

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