Switchgear Market by Insulation (Gas-insulated, Air-insulated), Installation (Indoor, Outdoor), Current (AC, DC), Voltage (Low, Medium, High), End User (T&D Utilities, Industries, Commercial & Residential) and Region - Global Forecast to 2028
[277 Pages Report] The switchgear market is estimated at USD 93.1 billion in 2023, with a projected growth to USD 119.9 billion by 2028, exhibiting a Compound Annual Growth Rate (CAGR) of 5.2%. The dominant force in the market is the Asia Pacific region, followed by Europe and North America. A surge in power demand, attributed to factors such as rising population, industrialization, and urbanization, has been significant. Notably, electrification is experiencing a notable uptick, particularly in developing economies such as Asia Pacific, Africa, and South America. The global trend towards environmental consciousness and a transition to cleaner energy and renewables is evident, driven by stringent environmental regulations compelling utilities to adopt cleaner energy sources.
Within the Asia Pacific region, characterized by burgeoning energy demand, the replacement of aging coal-fired power plants, and the development of smart infrastructure, presents lucrative opportunities for the switchgear market. In Europe, the deployment of smart switchgear is on the rise, primarily influenced by stringent emission regulations. Another pivotal factor propelling switchgear utilization globally is the increasing adoption of high-voltage direct current (HVDC) power transmission systems, crucial for efficient electricity transportation over long distances. Collectively, these factors are poised to bolster the switchgear market.
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Switchgear Market Dynamics
Driver: Modernization of power distribution infrastructure
New regulations have emerged to reduce power blackouts and enhance power distribution networks. Consequently, the market for power sector equipment, particularly monitoring solutions and advanced switchgear, is expanding rapidly. These technologies empower maintenance teams by providing real-time data, allowing them to detect aging or overused equipment and take proactive measures to prevent failures and optimize the grid's efficiency. Investments in these solutions are crucial to ensuring a reliable and resilient electricity supply in the face of increasing demand and evolving climate conditions.
Restraints: Downturn in residential property market
The COVID-19 pandemic severely impacted the new residential real estate sector, with global GDP dropping by 3.1% in 2020 due to pandemic-related measures. The economic crisis spurred by the pandemic was predicted to result in global unemployment surpassing 200 million by 2023, according to UN data. Widespread job losses and subsequent inflation in various economies have hampered the new residential real estate market. For example, US Census figures show a 118% increase in home prices since 1965, while income only rose by 15% until 2021. Given the connection between the switchgear market and residential real estate growth, the slowdown due to credit shortages and the emergence of COVID-19 and its variants has negatively impacted the real estate sector, potentially affecting the switchgear market.
Opportunities: Advancements in smart technologies and digital transformation
Some emerging technologies in the switchgear industry focus on environmental friendliness and energy efficiency. Vacuum, hybrid, and intelligent or smart switchgear are among the notable advancements.
Traditionally used in medium-voltage applications, vacuum switching is now being considered for high-voltage applications due to its eco-friendliness compared to SF6 switchgear, a greenhouse gas. This shift is motivated by a growing emphasis on environmentally responsible solutions. Hybrid switchgear combines air-insulated and high-voltage gas-insulated switchgear. This innovation reflects a desire for more sustainable and efficient options. The hybrid approach is particularly relevant as investments in smart grid infrastructure increase, accommodating the integration of fluctuating renewable energy sources into the grid.
Challenges: Intense competition from unorganized sector
Prominent switchgear manufacturers face formidable competition from the unorganized sector, which includes local and gray market entities that offer inexpensive, low-quality products. Local players produce their goods in-house and market them under their brand names, while gray market players import and distribute products through unauthorized dealers. These unorganized market participants outcompete larger companies with their pricing competitiveness and the localized distribution networks they establish, which can be challenging for global firms to replicate. The rise in sales from both local and gray market players can undermine the reputation of leading brands if subpar products are sold under their names. The increased sales from these entities reduce the opportunities for global players to expand their revenue and market share.
Switchgear Market Ecosystem
The market for switchgear 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).
Medium voltage segment, by voltage, to grow at highest CAGR from 2023 to 2028.
Switchgears with a voltage rating of 2-36 kV are classified as medium-voltage switchgears. Widely employed across various end-user sectors, especially in manufacturing, process industries, and Transmission & Distribution (T&D) utilities, these switchgear encompass equipment like circuit breakers, paralleling switchgear, AIS (Air-Insulated Switchgear), main ring units, motor control centers, railway & marine switchgear, and surge arresters. Their role involves safeguarding industrial equipment such as generators, motors, compressors, HVAC & air conditioning systems, heating & lighting equipment, providing overload current protection, and supporting T&D sub-stations. Medium-voltage switchgear are integral to railway AC & DC traction power supply substations. The railway sector is witnessing a shift from diesel-electric locomotives to electric or battery-electric ones to curb emissions, particularly notable in the Asia Pacific region, thereby stimulating the growth of the medium-voltage (2-36 kV) switchgear market.
Air-insulated segment, by insulation, to emerge as largest segment of switchgear market.
In 2022, the AIS segment dominated the switchgear market with a 69.9% share. This growth was fuelled by increasing demands from expanding distribution networks, industries, as well as commercial and residential sectors. AIS, a prevalent type in low and medium-voltage switchgear, integrates electrical disconnector switches, circuit breakers, and earth switches. These components are essential for controlling, isolating, and safeguarding electrical equipment, utilizing air as the insulating medium. AIS is known for its cost-effectiveness, pollution-free nature, and straightforward construction when compared to GIS.
DC segment, by current, to grow at highest CAGR from 2023 to 2028.
DC power, in contrast to AC power, flows in a single direction and lacks the sinusoidal waveform characteristic of AC. It's predominantly generated directly from renewable sources such as photovoltaic solar cells, wind turbines, and batteries. Historically, generating AC has been more straightforward and cost-effective due to the mechanics of generators, making AC systems cheaper to operate. AC power can also be converted into DC through rectifiers. The limitation of DC transmission over long distances due to the absence of mechanisms for adjusting voltage without converting to AC is changing with the introduction of high-voltage direct current (HVDC) systems. These systems now enable efficient long-distance transmission of electrical power using DC. Additionally, the rapid global growth of renewable energy sources, driven by substantial investments, is increasing the demand for DC switchgears. These switchgears are also prevalent in railway traction substations, and as railways electrify, the DC switchgear market is poised for further expansion.
The Asia Pacific Switchgear market is poised to achieve the highest CAGR throughout the forecast period.
In 2022, the Asia Pacific region secured the highest market share of the switchgear market, with China taking the lead, succeeded by India and Japan. This dynamic region comprises significant economies such as China, India, Japan, Australia, and other Southeast Asian nations, including South Korea and the Association of Southeast Asian Nations (ASEAN) states. The region's rapid development, particularly in major economies, is a driving force behind growth across diverse sectors, including power transmission, distribution, industries, commercial and residential applications, and transportation.
The manufacturing industry, benefiting from cost advantages, is a key factor in the escalating demand for switchgears. With a concurrent rise in power generation demand due to population growth, there are concerted efforts to transition towards clean energy, as reflected in ambitious targets for natural gas and renewable power generation in countries like China, Japan, and India. The robust marine industry in Japan, South Korea, and China, particularly in the maritime trade sector, further amplifies the need for switchgears to safeguard electrical equipment on marine vessels. Anticipating an upswing in maritime trade, driven by increased demand for LNG tankers and commercial vessels, switchgears play an indispensable role. Moreover, the surge in population intensifies the necessity for housing infrastructure, prompting economies to prioritize the expansion of public housing, consequently boosting the demand for switchgears in the Asia Pacific region.
As maritime trade is projected to grow, driven by increased demand for LNG tankers and commercial vessels, switchgear play a crucial role. Additionally, population growth intensifies the need for housing infrastructure, prompting economies to focus on expanding public housing, further stimulating the demand for switchgear in the Asia Pacific.
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
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Report Metric |
Details |
Market Size available for years |
2021–2028 |
Base year considered |
2022 |
Forecast period |
2023–2028 |
Forecast units |
Value (USD Billion) |
Segments covered |
By Installation, By Insulation, By Current, By Voltage, and By End- User |
Geographies covered |
Asia Pacific, North America, Europe, Middle East and Africa, and South America |
Companies covered |
ABB (Switzerland), General Electric (US), Siemens (Germany), Schneider Electric (France), Mitsubishi Electric (Japan), Eaton Corporation (Ireland), Powell Industries Inc. (US), Havells ( India), Bharat Heavy Electricals Limited (BHEL) (India), Hyundai Electric (South Korea), Hubbell (US), Fuji Electric (Japan), Hitachi (Japan), Legrand (France), Crompton Greaves Power and Industrial Solutions (India), Hyosung (South Korea), Lucy Electric (UK), Toshiba (Japan), Sécheron (Switzerland), ELEKTROBUDOWA (Poland). |
The switchgear market is classified in this research report based on installation, insulation configuration, voltage, current, end-user, and region.
Based on installation:
- Indoor
- Outdoor
Based on insulation types:
- Air Insulated
- Gas Insulated
- Others
Based on voltage:
- Low
- Medium
- High
Based on current:
- AC
- DC
Based on end-users:
- Transmission & Distribution Utilities
- Industries
- Commercial & Residential
- Others
Based on regions:
- North America
- Asia Pacific
- South America
- Europe
- Middle East and Africa
Recent Developments
- In October 2022, ABB has completed the acquisition of ASKI Industrie Elektronik GmbH (ASKI Energy) in Austria, a move that significantly enhances ABB's digital energy management portfolio. This acquisition plays a vital role in advancing ABB's ecosystem of digital energy services, emphasizing the company's commitment to innovation and expansion in the energy sector..
- In April 2022, Siemens Smart Infrastructure was contracted by EWE NETZ GmbH, which operates highly efficient power grids in Germany. EWE NETZ installed fluorine gas-free blue GIS medium-voltage switchgear from Siemens.
- In October 2021, Schneider Electric launched the next-generation BlokSeT LV switchboard with enhanced safety features that include a real-time thermal monitoring solution.
Frequently Asked Questions (FAQ):
What is the current size of the global switchgear market?
The global switchgear market is estimated to be USD 119.9 billion in 2028.
What are the major challenges for switchgear market?
Intense competition from the unorganized sector is posing a major challenge to the switchgear market. Prominent switchgear manufacturers face formidable competition from the unorganized sector, which includes local and gray market entities that offer inexpensive, low-quality products. Local players produce their goods in-house and market them under their brand names, while gray market players import and distribute products through unauthorized dealers. These unorganized market participants outcompete larger companies with their pricing competitiveness and the localized distribution networks they establish, which can be challenging for global firms to replicate. The rise in sales from both local and gray market players can undermine the reputation of leading brands if subpar products are sold under their names. The increased sales from these entities reduce the opportunities for global players to expand their revenue and market share.
Which End-user has the largest market share in the switchgear market?
Transmission and distribution utilities hold the largest market share in the Switchgear market due to their critical role in the distribution and transmission of electricity. Securing the transmission and distribution of electricity within a nation is chiefly the responsibility of transmission & distribution utilities operating through electricity grids. These utilities comprise investor-owned, publicly owned cooperatives, and nationalized entities, making them the primary electricity providers globally and the largest consumers of switchgears. Switchgear has consistently formed the backbone of electricity grids, becoming crucial for linking power generation sources and loads to a single electricity line, forming the intricate yet effective meshed topology seen in today's electricity grid.
Which is the second fastest-growing region during the forecast period in the switchgear market?
During the forecast period, Middle East & Africa is expected to be the second fastest-growing region in the switchgear market. The Middle East & Africa's switchgear market is categorized into distinct segments, including GCC countries (Saudi Arabia and UAE), Rest of GCC countries (Bahrain, Kuwait, and Oman), Egypt, South Africa, and the Rest of the Middle East & Africa (Qatar, Iraq, and Iran). Positioned as the fourth-largest global market for switchgear, this region is poised for a forecasted CAGR of 5.4%. This growth is propelled by escalating power demands and the burgeoning oil & gas industry.
Which is the largest segment, by current in the switchgear market during the forecast period?
The dominance of the AC segment in the market is attributed to the fact that most power transmitted through transmission and distribution networks is in the form of AC. AC power is the primary choice for power utilities distributing electricity to homes, businesses, and industries due to its efficiency in long-distance transmission with minimal loss, especially at higher voltages. Switchgear plays a vital role in power transmission and distribution systems, situated on both high-voltage and low-voltage sides of large transformer units.
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This study encompassed significant efforts in determining the present size of the switchgear market. It commenced with a thorough secondary research process to gather data related to the market, similar markets, and the overarching industry. Subsequently, these findings, assumptions, and market size calculations were rigorously validated by consulting industry experts across the entire value chain through primary research. The total market size was assessed by conducting an analysis specific to each country. Following that, the market was further dissected, and the data was cross-referenced to estimate the size of various segments and sub-segments within the market.
Secondary Research
In this research study, a wide range of secondary sources were utilized, including directories, databases, and reputable references such as Hoover's, Bloomberg BusinessWeek, Factiva, World Bank, the US Department of Energy (DOE), and the International Energy Agency (IEA). These sources played a crucial role in gathering valuable data for a comprehensive analysis of the global switchgear market, covering technical, market-oriented, and commercial aspects. Additional secondary sources included annual reports, press releases, investor presentations, whitepapers, authoritative publications, articles authored by well-respected experts, information from industry associations, trade directories, and various database resources.
Primary Research
The switchgear market involves a range of stakeholders, including component manufacturers, product manufacturers/assemblers, service providers, distributors, and end-users within the supply chain. The demand for this market is primarily driven by industrial end-users. Additionally, the increasing demand from transmission and distribution utilities contributes to market growth. On the supply side, there is a notable trend of heightened demand for contracts from the industrial sector and a significant presence of mergers and acquisitions among major players.
To gather qualitative and quantitative insights, various primary sources from both the supply and demand sides of the market were interviewed. The following breakdown presents the primary respondents involved in the research study.
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Market Size Estimation
The estimation and validation of the switchgear market size have been conducted using a bottom-up approach. This approach was rigorously employed to ascertain the dimensions of multiple subsegments within the market. The research process comprises the following key stages.
In this method, the production statistics for each type of switchgear have been examined at both the country and regional levels.
Thorough secondary and primary research has been conducted to gain a comprehensive understanding of the global market landscape for various categories of switchgears.
Numerous primary interviews have been undertaken with key experts in the field of switchgear system development, encompassing important OEMs and Tier I suppliers.
When calculating and forecasting the market size, qualitative factors such as market drivers, limitations, opportunities, and challenges have been taken into account.
Global Switchgear Market Size: Bottom-Up Approach
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Data Triangulation
The process of determining the overall market size involved the methodologies described earlier, followed by segmenting the market into multiple segments and subsegments. To finalize the comprehensive market analysis and obtain precise statistics for each market segment and subsegment, data triangulation and market segmentation techniques were applied, as appropriate. Data triangulation was accomplished by examining various factors and trends from both the demand and supply perspectives within the ecosystem of the switchgear market.
Market Definition
Switchgear devices function akin to switches, managing the flow of normal load current. They also play a critical role in clearing fault currents. Sensing devices like current transformers, potential transformers, and various types of relays are employed based on the application to detect and respond to faults. Additionally, these systems incorporate provisions for metering, control, and data gathering, employing a diverse array of devices to fulfil their switching functions.
These systems directly interface with supply systems, strategically positioned in both high- and low-voltage sides of power transformers. Their primary functions encompass de-energizing equipment for testing and maintenance, as well as responding to faults in the power system. In the event of a fault, switchgear devices, particularly automatic protective ones, come into play. This involves relays and circuit breakers; the relay identifies the faulty section and activates the circuit to trip the breaker, isolating the defective segment. The unaffected sections continue normal operation, preventing damage and ensuring uninterrupted power supply.
The market encompasses a wide range of stakeholders, from component manufacturers and product assemblers to service providers and end-users and is influenced by factors such as development of power distribution infrastructure, rapid growth in renewable energy-based capacity, likewise.
Key Stakeholders
- Government Utility Providers
- Independent Power Producers
- Switchgear manufacturers
- Power equipment and garden tool manufacturers
- Consulting companies in the energy & power sector
- Distribution utilities
- Government and research organizations
- Organizations, forums, and associations
- Raw material suppliers
- State and national regulatory authorities
- Switchgear manufacturers, distributors, and suppliers
- Switchgear and circuit breaker original equipment manufacturers (OEMs)
Objectives of the Study
- The switchgear market will be defined, described, segmented, and forecasted based on installation, insulation, voltage, current, and end-user.
- To forecast market size for five key regions: North America, South America, Europe, Asia Pacific, and the Middle East and Africa, as well as the key countries within each region.
- To provide comprehensive information about market growth drivers, restraints, opportunities, and industry-specific challenges.
- To strategically analyze the subsegments in terms of individual growth trends, prospects, and contributions to overall market size.
- To examine market opportunities for stakeholders and the competitive landscape for market leaders.
- To profile the key players strategically and thoroughly analyze their market shares and core competencies.
- To monitor and analyze competitive developments in the switchgear market, such as agreements, sales contracts, partnerships, new product launches, acquisitions, joint ventures, contracts, expansions, and investments.
- This report examines the value of the switchgear market.
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Company Information
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Growth opportunities and latent adjacency in Switchgear Market
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