Gas Insulated Switchgear Market

[289 Pages Report] The global gas insulated switchgear market in terms of revenue was estimated to be worth $23.8 billion in 2023 and is poised to reach $31.6 billion by 2028, growing at a CAGR of 5.8% from 2023 to 2028. The emergence of IoT technology for purposes like home and building automation has made effective energy management a paramount concern. Consequently, these developments have spurred the demand for gas-insulated switchgear to enable the monitoring and optimization of energy consumption. While the industrial sector played a pivotal role in driving this demand, the commercial, service, and residential sectors also made significant contributions to the market's expansion.

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Gas Insulated Switchgear Market Dynamics

Driver: Increase in renewable energy-based capacity addition

The expansion of renewable energy is being propelled by several key factors, including sustained governmental support across more than 130 countries, ambitious net-zero commitments made by nations representing 90% of global GDP, and the increasing competitiveness of wind and solar photovoltaic (PV) technologies. China's ambitious goal of achieving carbon neutrality by 2060 has spurred the establishment of new short-term targets, such as the aim to reach 1,200 GW of combined wind and solar PV capacity by 2030. Projections indicate that renewable power growth within the European Union is set to surpass the expectations outlined in existing National Energy and Climate Plans (NECPs) for 2030, based on the trajectory of renewable capacity expansion between 2021 and 2026. Member countries are increasing auction volumes, businesses are contracting for more renewable electricity, and consumers are actively installing substantial numbers of solar panels. These collective efforts are driving a rapid transition towards renewable energy adoption, which, in turn, will have a positive impact on the global gas insulated switchgear industry as the demand for clean and sustainable energy continues to rise.

Restraints: Stringent regulations restricting SF6 gas emissions

Gas-insulated switchgear (GIS) substations contain all current-carrying components within gas-tight metal enclosures pressurized with sulfur hexafluoride (SF6) gas, serving as the insulating and arc-quenching medium. This use of pressurized SF6 gas enables the construction of more compact switchgear systems by reducing the spacing required between current-carrying elements. SF6, a dry inert gas, possesses non-flammable properties and does not naturally degrade. However, it is crucial to note that SF6 is categorized as a potent "greenhouse gas" (GHG), with a high global warming potential (GWP) within the group of chemicals known as fluorinated gases. Due to its environmental impact, stringent measures and usage restrictions have been implemented to control SF6 emissions. Regulatory bodies are increasingly scrutinizing SF6, and as regulations regarding F-gases become stricter, the gas insulated switchgears market is expected to face significant implications.

Opportunities:  Investment in GIS to support growth of industrial production and renewable energy.

The surge in investments in industrial production related to gas-insulated switchgear (GIS) can be attributed to several compelling factors. Emerging markets, including China, India, and Brazil, are experiencing significant demand for new power infrastructure. The integration of renewable energy sources into the grid is driving the need for efficient transmission and distribution systems, while the imperative to modernize aging grids in developed nations further boosts GIS investment. Additionally, GIS is recognized as an eco-friendly technology, aligning with global sustainability efforts. Despite disruptions caused by recession, a gradual resurgence in industrial production is observed, especially in emerging economies like India and China. Various industrial projects and initiatives worldwide underscore promising prospects for GIS in ensuring power safety, regulatory compliance, and supporting industrial expansion.

Challenges: GIS is expensive compared to conventional or air-insulated switchgear

The cost of acquisition for gas-insulated switchgear (GIS) is elevated due to factors such as Capital Expenditure (CAPEX), the intricacies of the manufacturing process, and the use of expensive components like circuit breakers, transformers, and switching elements that must operate within a dielectric gas-filled enclosure. Housing all these elements within a single chamber increases equipment costs. It's important to note that SF6 gas, classified as one of the most hazardous greenhouse gases by the Intergovernmental Panel on Climate Change (IPCC), is irreplaceable in terms of its effectiveness. Consequently, the market for GIS is expected to face constraints in its growth trajectory due to the combination of high procurement costs and stringent regulations surrounding SF6 gas. Moreover, in case of internal damage, the repair costs for GIS are higher compared to air-insulated switchgear (AIS).

Gas-Insulated Switchgear Market Ecosystem

The market for gas-insulated switchgear (GIS) is marked by the participation of leading companies that are firmly established, financially robust, and possess substantial expertise in the production of switchgear and related components. These companies hold a significant market presence and provide a wide array of product offerings. They harness advanced technologies and maintain extensive global sales and marketing networks. Among the notable players in this market are Eaton (Ireland), ABB (Switzerland), Siemens (Germany), Mitsubishi Electric (Japan), and Schneider Electric (France).

Gas insulated switchgear indoor segment, by installation, to grow at highest CAGR from 2023 to 2028.

Indoor gas insulated switchgear is expected to be the fastest-growing market from 2021 to 2028, based on installation. A reliable power supply is a major factor driving demand for indoor gas insulated switchgears. The industrial sector also contributes to the growth of the indoor gas insulated switchgear market, with manufacturing and assembly plants incorporating indoor gas insulated switchgear into their power networks.

Hybrid segment, by configuration, to emerge as largest segment of gas insulated switchgear market.

During the forecast period, the hybrid segment has the largest market share based on configuration. The rising demand is due to the configuration's features. The three-position disconnecting and earthing switch on hybrid gas-insulated switchgear makes it safe and compact. In addition to being compact, hybrid gas-insulated switchgear can be installed quickly on-site. The main advantages of hybrid gas-insulated switchgear are its dependability, high level of intelligence, and low maintenance requirements.

Electrical utilities segment, by end-user, to grow at highest CAGR from 2023 to 2028.

By end-user, Electrical utilities are intensifying their investments in grid modernization, aiming to enhance operational efficiency and reliability. This drive includes the integration of cutting-edge technologies like smart grids to optimize energy distribution. Within this modernization landscape, gas-insulated switchgear (GIS) plays a pivotal role by bolstering the performance and dependability of grid infrastructure. Reliability and safety are paramount concerns for utilities, and GIS systems are renowned for their robustness, withstanding challenging environmental conditions. Moreover, they incorporate advanced safety features, effectively mitigating the risk of electrical failures and arc flash incidents, making them the preferred choice for utilities.

Asia Pacific to account for largest market size during forecast period.

The gas insulated switchgear market is projected to be dominated by the Asia Pacific region throughout the forecast period. According to the International Monetary Fund (IMF), the Asia Pacific economy is anticipated to grow by 4.9% in the fiscal year 2022. The region experienced a significant economic slowdown due to the recession, leading to a roughly 1.5% decline in its economy in 2022. Consequently, energy demand saw a notable reduction during this period, but it has rebounded as lockdown measures were lifted, and the industrial and manufacturing sectors fully resumed operations. Additionally, the region's population growth places increased strain on housing infrastructure, prompting economies to prioritize the expansion of public housing infrastructure. With sustained growth in major industrial sectors across Asia Pacific, the demand for gas insulated switchgear is expected to remain strong throughout the forecast period.

Key Market Players

ABB (Switzerland), General Electric (US), Siemens (Germany), Schneider Electric (France), Eaton Corporation (Ireland), Mitsubishi Electric (Japan), Hitachi (Japan), Legrand (France), Hyundai Electric (South Korea), Fuji Electric (Japan), and Toshiba (Japan).

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Scope of the Report

The market is classified in this research report based on installation, insulation configuration, voltage rating, end-user, and region.

Based on installation, the gas insulated switchgear market has been segmented as follows:

• Indoor
• Outdoor

Based on insulation types, the market has been segmented as follows:

• SF6
• SF6- free

Based on voltage ratings, the market has been segmented as follows:

• Up to 5 kV
• 6 to 15 kV
• 16 to 27 kV
• 28 to 40.5 kV
• 40.6 to 73 kV
• 74 to 220 kV
• Above 220 kV

Based on configurations, the market has been segmented as follows:

• Hybrid
• Isolated Phase
• Integrated Three-phase.
• Compact GIS

Based on end-users, the market has been segmented as follows:

• Industrial
• Commercial & Institutional
• Electrical Utilities
• Data Centers
• Aftermarket

Based on regions, the market has been segmented as follows:

• North America
• Asia Pacific
• South America
• Europe
• Middle East and Africa  

Recent Developments

• In April 2022, ABB and Samsung Electronics joined forces to collaboratively develop technologies focused on energy conservation, energy management, and the intelligent integration of the Internet of Things (IoT) in residential and commercial buildings.
• In August 2020, Schneider Electric finalized a transaction that merged its Low Voltage and Industrial Automation business in India with Larsen & Toubro's Electrical and automation business.
• In December 2021, ABB entered into a four-year framework agreement with Italy's Transmission System Operator (TSO), Terna, responsible for managing and distributing energy throughout the country. The contract entails the supply of ABB's Gas-Insulated Switchgear (GIS), a technology that significantly reduces the physical footprint of equipment in comparison to traditional air-insulated switchgear substations, often by a factor of one-tenth.

Frequently Asked Questions (FAQ):

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