Global Gas Insulated Substation Market Thrives as it Compactness Fits Urban Needs, Says Fairfield Market Research

August 2021

The global gas insulated substation market is driven by the environment-friendly nature of sulphur hexafluoride. The compact design of gas insulated substation (GIS) systems enables them to optimally utilize cramped spaces, offering the most efficient solutions to customers. Fairfield Market Research predicts that global gas insulated substation market is anticipated to register a healthy CAGR of 9% to be worth $36,627 Mn in 2025 from $23,751 Mn in 2020.

Key Insights into the Gas Insulated Substation Market:

  • Growing penetration of renewable power and further integration with conventional power grid networks to fuel investments into gas insulated substations (GIS).
  • In a GIS switchyard, GIS equipment constitutes more than 47% of the overall cost. The other costs include electricity, transport, civil, and erection & commissioning.
  • The initial investment required for the installation of GIS is 25% to 30% higher compared to air insulated substation (AIS). However, the operational costs associated with GIS is lower when compared to AIS or hybrid substations. This may hamper investments in GIS for power companies reluctant to spend heavily on gas insulated substation facilities.
  • The COVID-19 pandemic has significantly reduced demand for electricity in the commercial and industrial sectors. The International Energy Agency (IEA) estimated that global electricity demand decreased by 2.5% in Q1 2020. Post easing of restrictions, the market should rebound, which is likely to benefit overall investments into GIS facilities.

Gas Insulated Substations Find Lucrative Opportunity in Urban Areas due to Size

The growing demand for compact-sized power systems is expected to drive the demand for gas insulated substations. The demand comes as the land in urban areas witness reduction to accommodate issues of workforce migration. Furthermore, GIS takes up lesser space than air insulated substation, which is an economical advantage to metropolitan areas that inherently have a higher demand for power due to growing population. Analysts state that physical footprint of GIS is 35% lesser than AIS, which effectively cuts down transmission and distribution losses.

High Capital Investments to Hinder Market Growth of Gas Insulated Substations

The capital-intensive nature of GIS is expected to act as a hindrance to the global market. Furthermore, as GIS uses sulfur hexafluoride (SF6) it demands a more deliberate cooling process. As these substations are installed in obscure part of a building, heat removal becomes difficult. Furthermore, environmental regulation pertaining use of SF6 and the need to recycle them regularly are expected to hinder market growth during the forecast period.

Incessant Need for Uninterrupted Power Allows Asia Pacific to Remain Leading Region

Asia Pacific region is the most lucrative for prominent stakeholders in the gas insulated substation market. The unabated economic development in China and India has accelerated the need for safe electricity generation, transmission, and distribution. The next largest regions are Europe, with North America following closely behind. North America is the headquarters of several manufacturers, suppliers, and distributors of components used in gas insulated substations. North American companies are investing heavily in emerging economies in the APAC and Latin American markets to bolster their presence in the gas insulated substation market.

Companies Remain Focussed on Greener Solutions

Some of the key players operating in the global gas insulated substation market are Nissin Electric Co., ABB Ltd., GE, Siemens AG, Mitsubishi Heavy Industries, Ltd., Hyundai Heavy Industries, Toshiba Corporation, Nissin Electric Co., Ltd., Hitachi, Ltd., and LARSEN & TOUBRO LIMITED.

In April 2021, Siemens Energy announced its plan to deliver 10 bays of SF6-free gas-insulated switchgear to Virkkala substation in Finland, Europe. The project is slated for completion in the summer of 2022.

Companies Signing Agreements With Governments to Upgrade Gas Insulated Substations

Major stakeholders actively involved in the gas insulated substation market are GE, ABB Ltd., Siemens AG, Toshiba Corporation, Nissin Electric Co., Mitsubishi Heavy Industries, Ltd., Hyundai Heavy Industries. In March 2021, GE finalized a contract with the Nepal Electricity Authority to construct three 400 kilovolt (KV) gas insulated substations in the Himalayan nation. In the next month, Siemens Energy agreed to deliver 10 SF-free gas insulated switchgear in the Virkkala substation in Finland - its largest order till date.