An overview of HVDC market and future outlookSaqib Saeed

Principal Analyst

Power Technology Research LLC (PTR)

Agenda

• Global overview of HVDC market

• Specifics of growing HVDC markets

• Manufacturer profiles

• Opportunities and bottlenecks

Global overview of HVDC marketInstalled capacity split by technologies

Projects Count by Region

0

10

20

30

40

50

60

70

80

90

Africa Asia Australia &Oceania

Europe Middle East NorthAmerica

SouthAmerica

HV

DC

Pro

ject

s

Number of HVDC Projects (1990-2030)

VSC

LCC

Source: Power Technology Research

Europe and Asia to stay the biggest markets

0

10

20

30

40

50

60

70

80

90

100

2000-2005 2006-2010 2011-2015 2016-2020 2021-2025

GW

LCC vs VSC capacity (GW)

LCC

VSC

HVDC Installed Capacity

Source: Power Technology Research

Steady growth expected in VSC market

Specifics of growing HVDC marketsMarket drivers, strategies and forecast

China’s HVDC market overview

• A surge of HVDC projects from 2001 to 2010 – More than 23 projects

• Long distance bulk power transfer and China’s dependability on hydropower were main instigators of these HVDC projects• 58% of the projects were 3000MW and higher capacity

• From 2010 onwards, era of UHVDC projects was initiated• 67% of the projects installed/planned after 2010 are UHVDC

China has developed a strong HVDC manufacturing base

China’s HVDC market overview

• Huge investments in R&D and make in China policy has started to pay off• Local manufacturing of valves, transformers, reactors, submarine cables

and P&C• Three state-of-the-art testing labs by SGCC and CEPRI• 93% of the switching elements used in all HVDC projects are produced

locally• More than 50% of converter transformers are also produced within China

• More VSC based projects are expected in future years• Multiterminal wind power projects• 9 VSC projects are expected till 2025

China has developed a strong HVDC manufacturing base

India’s HVDC market overview

• Inter-regional capacity (23 GW) and unevenly distributed energy sources e.g. coal in central region (120GW) and hydro in north• Back-to-back projects to connect regional transmission network

• Cross border HVDC projects with Bangladesh and Sri-Lanka

More VSC based projects are expected in India

0

2

4

6

8

1990-1995 1996-2000 2001-2005 2006-2010 2011-2015 2016-2020

GW

Yearly capcity addition in India (GW)

EMEA HVDC market overview

• European market is growing at a rapid pace yet it is extremely competitive and dominated by Tier-1 players• Integration of renewables (specifically offshore wind) will drive the future

market with main influencing factor of UK and Germany‘s plans to install 25GW of offshore wind by 2030

• 3000MW capacity cross-border projects are planned in Middle East in next 3 years• Saudi Arabia and GCC interconnections

• Electricity imports from MENA to European demand centers (EU-GCC clean energy) can result in multiple HVDC lines

Renewables to drive the European HVDC market

Manufacturer profilesGo-to market strategies, mergers & acquisitions, R&D

ABBLargest installed base of 120 GW HVDC globally

Focus on Asian markets

Partnerships with local entities in India

R&D spend in swiss semiconductor

manufacturing base

Divested its HV cables business

SiemensExpected to win major

offshore wind power projects

Focus on European market

Partners with local Chinese players

Recent R&D spend for a testing facility in

Germany

Sources IGBT modules from Infineon and Mitsubishi

Opportunities and bottlenecksFocus of OEMs and system operators

Offshore wind – An opportunity

• China, UK and Germany have plans to build multiple GW of offshore wind power projects

• All Tier-1 players have focus towards this market opportunity

• Also gives an opportunity to maritime industry players to provide platform for offshore converter stations

• Players from Middle East have built partnerships with Tier-1 players

• Offshore wind market and stricter grid codes will drive the VSC market at a rapid pace in next 5 years

VSC HVDC market will increase rapidly

Multivendor operability

• HVDC systems are provided as a turnkey solution to system operators• A black box in terms of operation

• With increasing market of wind power, multiterminal HVDC systems are more common

• System operators expect to be able to install HVDC converters from different manufacturers in one multiterminal project• A multivendor solution can result in a cost competitive environment

A challenge for system operators

Multivendor operability

• European system operators are taking following steps to cope with the problem:• Brining current OEMs on the same page to share information

• Small scale simulation based multiterminal systems with different suppliers to solve multivendor operability

• Standardizing design requirements for all manufacturers

• Encouraging new OEMs to make the HVDC market less concentrated

A challenge for system operators

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Saqib SaeedPrincipal Analyst – T&DT. +49 (0)89 12252374M. +49 (0)176 43408939M. +1 408 622 0564saqib.saeed@powertechresearch.com

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