Switchgear Market

Global Switchgear Market Forecast

• The approximately US$90.1 Bn market for switchgear market likely to reach a valuation of US$143.7 Bn by 2030
• Switchgear market revenue projected for a healthy CAGR of 6.9% over 2023 - 2030

Quick Report Digest

1. The key trend anticipated to fuel the global switchgear market growth is the increasing popularity of utility applications.
2. The switchgear market is growing due to increased electricity demand, renewable energy integration, grid modernisation efforts, and the need for reliable power distribution. Technological advancements, regulatory initiatives, and urbanisation further drive the expansion of the market.
3. Air-insulated switchgear (AIS) holds the largest market share in the switchgear industry due to its cost-effectiveness, ease of maintenance, and eco-friendly attributes. It is versatile and reliable, making it a preferred choice for various applications contributing to its dominant market position.
4. High-voltage switchgear has secured the largest market share due to its crucial role in long-distance electricity transmission. The demand for reliable power distribution, renewable energy integration, and industrial expansion has boosted the need for high-voltage switchgear, positioning it as a market leader.
5. The commercial sector commands the largest market share in the switchgear industry due to its reliance on dependable electrical distribution systems. This sector experiences ongoing urbanisation and construction, driving the need for switchgear in new infrastructure projects and commercial buildings, thus establishing its dominant market position.
6. North America leads the switchgear market due to investments in grid modernisation, renewable energy integration, and infrastructure development. Strict environmental regulations and a focus on energy efficiency have also driven demand for advanced switchgear technologies, consolidating North America's dominant market share.
7. Asia Pacific is experiencing the fastest CAGR in the switchgear market due to rapid urbanisation, industrialisation, and infrastructure development, along with the adoption of renewable energy sources and the modernisation of electrical grids, driving significant demand for switchgear solutions in the region.
8. Regulations curbing SF6 gas emissions challenge the switchgear market as they promote the development of eco-friendly alternatives. Manufacturers must adapt to these stricter standards, invest in research, and innovate to create sustainable and compliant switchgear solutions, posing both challenges and opportunities in the industry.

A Look Back and a Look Forward - Comparative Analysis

The switchgear market is experiencing growth due to increasing urbanisation, industrialisation, and infrastructure development, leading to rising electricity demand. Additionally, the need for reliable and efficient electrical distribution, coupled with advancements in smart grid technology and renewable energy integration, is driving the expansion of the switchgear market as it plays a critical role in electrical power management and distribution systems.

The switchgear market is driven by a surge in electricity demand, rising renewable energy integration, and the need for reliable power distribution. Smart grid advancements, urbanisation, and industrialisation are boosting growth. In addition, stringent safety regulations and the push for eco-friendly and energy-efficient solutions are propelling the adoption of advanced switchgear technologies in various sectors, including utilities, manufacturing, and infrastructure.

The future of the switchgear market appears promising, driven by factors like the ongoing transition to renewable energy sources, smart grid adoption, and increased focus on grid reliability and safety. Innovations in eco-friendly and digitally integrated switchgear solutions are expected to gain traction, providing enhanced performance and control. Furthermore, expanding industrial and infrastructure projects globally will continue to fuel demand for Switchgear in power distribution and management systems.

Key Growth Determinants

• Increasing Renewable-based Energy Capacity Additions

The increasing addition of renewable energy capacity is a significant driver for the switchgear market. As renewable sources like wind and solar power expand, the grid requires robust switchgear systems to manage variable energy inputs efficiently.

Switchgear ensures the safe and reliable distribution of renewable energy, reducing downtime and enhancing grid stability. With a growing global emphasis on reducing carbon emissions, the switchgear market benefits from its essential role in facilitating the integration of clean, sustainable energy sources into the existing power infrastructure.

• Growing Ubiquity of Digitalisation, and Deepening Penetration of Smart Technologies

Emerging smart technologies and digitalisation are driving the switchgear market by enhancing control, monitoring, and automation capabilities. Smart switchgear integrates sensors, real-time data analytics, and remote connectivity to optimise grid performance, reduce downtime, and enable predictive maintenance. This improves overall energy efficiency and grid resilience.

As utilities and industries increasingly embrace digital transformation, the demand for intelligent switchgear solutions continues to rise, making the market a crucial enabler of modern, data-driven electrical infrastructure.

• Rapidly Strengthening Power Distribution Infrastructure

The strengthening of power distribution infrastructure is a key driver for the switchgear market. Ageing infrastructure, coupled with growing electricity demand, necessitates upgrades and expansions. Switchgear plays a pivotal role in enhancing grid reliability, protecting equipment, and ensuring efficient energy flow.

Investments in smart grids, microgrids, and substations are on the rise, fueling the demand for advanced switchgear solutions. This market growth is further accelerated by the need to reduce energy losses, improve fault management, and integrate renewable energy sources into the grid effectively.

Major Restraints

• Regulations Restricting SF6 Gas Emissions

Regulations aimed at restricting SF6 gas emissions are challenging the switchgear market. SF6, while effective in switchgear, is a potent greenhouse gas with high global warming potential. Governments worldwide are imposing stricter environmental regulations to limit its use and encourage alternative technologies.

The transition towards eco-friendly switchgear solutions requires significant research, development, and adaptation, posing challenges to manufacturers. However, it also offers opportunities for innovation, promoting the development of greener and more sustainable switchgear options to meet evolving regulatory requirements and environmental concerns.

• High Competition from Unorganised Sectors

High competition from the unorganised sector presents challenges to the switchgear market. Small-scale, unregistered manufacturers often offer lower-cost, substandard products, which can erode market share for established companies. Such competition can lead to price wars, quality concerns, and reduced profitability for legitimate players.

Maintaining high standards, investing in innovation, and educating consumers about the importance of quality and safety are crucial strategies for organised switchgear manufacturers to counter the threat posed by the unorganised sector and sustain their market position.

Key Trends and Opportunities to Look at

1. IoT Integration

Digitalisation, and IoT integration in the switchgear market involve the use of advanced sensors and communication technologies to enable real-time monitoring, data analysis, and remote control of switchgear systems. This technology enhances operational efficiency, facilitates predictive maintenance, and supports smart grid integration.

By enabling seamless data exchange and automation, it contributes to more reliable and responsive electrical distribution systems, improving overall grid management.

2. Smartgrid Integration

Smart grid integration technology in the switchgear market involves the incorporation of advanced communication and control systems to enhance the efficiency and reliability of electrical grids. It enables bidirectional communication between utilities and consumers, grid automation, and efficient management of energy distribution.

The technology is crucial for accommodating renewable energy sources, optimising energy use, reducing losses, and ensuring a more resilient and sustainable electrical grid.

3. Solid-insulated Switchgear

Solid-insulated switchgear technology in the switchgear market replaces traditional gaseous insulation with solid materials, offering improved safety, environmental friendliness, and reliability. It eliminates the use of sulfur hexafluoride (SF6), a potent greenhouse gas.

Solid-insulated switchgear is ideal for urban areas with space constraints and sensitive environments, making it an eco-friendly alternative for electrical distribution systems.

How Does the Regulatory Scenario Shape this Industry?

The regulatory scenario significantly influences the switchgear market as governments worldwide seek to ensure the safety, reliability, and environmental sustainability of electrical distribution systems. Regulatory bodies often impose stringent standards and guidelines that switchgear manufacturers must adhere to.

One notable example is the growing concern over sulfur hexafluoride (SF6), a greenhouse gas with high global warming potential commonly used in Switchgear. Several regions and countries have imposed restrictions or are phasing out SF6 use, pushing manufacturers to develop alternative, eco-friendly insulation technologies.

Additionally, regulations related to energy efficiency are driving the adoption of advanced switchgear solutions. Governments are encouraging the deployment of smart grids, renewable energy integration, and energy-efficient equipment to reduce energy wastage and carbon emissions.

Compliance with these regulations necessitates the development of energy-efficient and digitally integrated switchgear systems, fostering innovation in the market.

Furthermore, regulations aimed at improving grid reliability and resilience are shaping the market. These may include requirements for grid automation, real-time monitoring, and fault detection. As the regulatory landscape evolves, switchgear manufacturers must stay agile and adapt their products and practices to meet these changing requirements, which can both pose challenges and create opportunities in the switchgear market.

Fairfield’s Ranking Board

Top Segments

1. AIS Continues to Dominate

Air-insulated switchgear (AIS) has captured the largest market share in the switchgear market due to several factors. It is an environmentally friendly option, as it does not use greenhouse gases like SF6, which is a concern for regulators and environmentally-conscious customers.

Furthermore, AIS is cost-effective, with lower installation and maintenance expenses compared to gas-insulated switchgear (GIS). Additionally, AIS is well-suited for various applications, including medium and low-voltage distribution, making it a versatile choice for a wide range of industries and grid systems. Its simplicity and reliability have contributed to its dominance in the market.

On the other hand, GIS is likely to be experiencing the highest value CAGR in the switchgear market due to its advantages in compactness, reliability, and insulation properties. GIS is ideal for applications with space constraints and in areas prone to harsh environmental conditions. Moreover, it minimises the risk of internal faults and offers better safety.

The increasing demand for reliable power distribution, especially in urban areas, coupled with advancements in GIS technology and environmental concerns, is driving its growth in the market despite being relatively costlier than air-insulated Switchgear.

2. High Voltage Segment Will Surge Ahead

High-voltage switchgear has captured the largest market share in the switchgear market due to several reasons. Firstly, it is vital for the transmission and distribution of electricity over long distances, making it a cornerstone of power infrastructure.

Additionally, the growth of renewable energy sources and the need for efficient grid management have increased the demand for high-voltage switchgear. Furthermore, advancements in technology have made high-voltage switchgear more reliable, compact, and environmentally friendly, contributing to its dominance in the market for applications such as substations, power generation, and industrial facilities.

Low-voltage switchgear is all set for a highest growth rate on account of the proliferation of small-scale renewable energy installations increased electrification in emerging markets, and the adoption of smart building technologies.

Moreover, its compact design, improved safety features, and compatibility with modern digital control systems make it attractive for various applications, including residential, commercial, and industrial settings. The growing emphasis on energy efficiency and decentralised power generation further contributes to its rapid growth in the market.

3. Demand from Commercial Sector Maximum

The commercial sector has captured the largest market share in the switchgear market due to several reasons. Commercial facilities such as office buildings, shopping centres, and data centres require reliable and efficient electrical distribution systems to meet their operational needs. The increasing adoption of smart building technologies has driven demand for advanced switchgear solutions.

Additionally, the commercial sector often undergoes rapid urbanisation and construction, further boosting the need for switchgear in new infrastructure projects. Overall, the critical role of switchgear in ensuring uninterrupted power supply in commercial applications has led to its prominent market share.

The transmission and distribution (T&D) utilities segment expects the fastest CAGR in the switchgear market due to several key factors. As global electricity demand rises, T&D utilities are investing in upgrading and expanding their infrastructure to ensure efficient and reliable power transmission.

Moreover, the integration of renewable energy sources into the grid necessitates advanced switchgear solutions to manage variable power generation. Additionally, the increasing focus on grid modernisation, smart grid technologies, and grid resilience further drives the demand for switchgear in the T&D utilities sector.

Regional Frontrunners

Asia Pacific at the Forefront

The Asia Pacific region has captured the largest market share in the switchgear market due to several compelling reasons. Rapid industrialisation and urbanisation in countries like China, and India have led to a surge in electricity demand, driving extensive investments in electrical infrastructure, including switchgear.

The region is witnessing substantial growth in renewable energy projects, requiring advanced switchgear for efficient integration into the grid. Governments in the Asia Pacific are focused on enhancing energy efficiency, grid reliability, and grid modernisation, further propelling the demand for advanced switchgear technologies.

Moreover, the construction of new commercial and residential buildings with modern electrical systems contributes to market growth. The presence of key manufacturers and suppliers in the region, coupled with competitive pricing, supports the Asia Pacific's dominance in the switchgear market.

North America Reflects High Growth Potential

The region's ageing electrical infrastructure is driving the need for upgrades and replacements, promoting the adoption of modern switchgear technologies. Increasing investments in renewable energy projects, electric vehicle charging infrastructure, and grid modernisation initiatives are boosting the demand for advanced switchgear solutions.

In addition, stringent regulations and a focus on reducing greenhouse gas emissions are encouraging the transition to eco-friendly and efficient switchgear systems. These factors collectively contribute to North America's robust growth in the switchgear market.

Fairfield’s Competitive Landscape Analysis

The global switchgear market is a consolidated market with fewer major players present globally. The key players are introducing new products and working on the distribution channels to enhance their worldwide presence. Moreover, Fairfield Market Research expects more consolidation over the coming years.

Who are the Leaders in the Global Switchgear Market Space?

• ABB Ltd
• Siemens AG
• Schneider Electric
• General Electric
• Eaton Corporation
• Mitsubishi Electric Corporation
• Toshiba Corporation
• Fuji Electric Co
• Crompton Greaves
• Hyundai Electric & Energy Systems
• Larsen & Turbo Limited
• Powell Industries, Inc.
• Lucy Electric UK
• HICO America Sales & Technology
• Ormazabal

Key Company Developments

New Product Launches

• April 2023: Siemens has extended its environmentally conscious blue GIS portfolio by introducing the 8DAB 40. This Switchgear is designed for primary distribution networks with a capacity of up to 40.5 kV, utilising clean air as its insulating medium with a GWP (Global Warming Potential) below 1. This innovation ensures that the Switchgear is not only climate-friendly but also entirely devoid of fluorinated gases.
• February 2023: Toshiba Transmission & Distribution Systems Private Limited (TTDI) recently disclosed that it secured orders for 23 units of 400 kV and nine units of 220 kV gas-insulated Switchgear. These orders are part of a project aimed at advancing and improving power transmission and distribution networks. Specifically, these switchgear units will be deployed in the modernisation of a 2X500 MVA substation located in Xeldem, Goa. Additionally, they will be utilised in the pooling substations associated with solar and wind-renewable projects situated in Alamuru and Kodamuru, operating at 400 kV voltage levels.

Distribution Agreement

• November 2022: Schneider Electric joined forces with ARDECO for the production of power and energy technology solutions within the United Arab Emirates. Under the terms of the collaboration, Schneider Electric was slated to produce an array of cutting-edge energy automation solutions and comprehensive power solutions. These encompassed switchgear and control panel integrations, as well as energy automation design and engineering services.

An Expert’s Eye

Demand and Future Growth

The growth in utilities is driving the market. The switchgear market is experiencing robust demand and is poised for future growth. Factors driving this growth include the expansion of renewable energy sources, smart grid adoption, and the need for reliable electricity distribution. Emerging technologies such as digitalisation, IoT integration, and eco-friendly solutions are reshaping the industry.

Moreover, increasing infrastructure development, urbanisation, and industrialisation worldwide are propelling demand. As electricity consumption continues to rise, the switchgear market is expected to witness sustained growth, driven by the evolving energy landscape and the imperative of grid modernisation.

Supply Side of the Market

Several leading countries dominate the global switchgear market. China, as the world's largest switchgear market, experiences substantial growth driven by rapid urbanisation, industrialisation, and infrastructure development. The US follows closely due to investments in grid modernisation, renewable energy integration, and ongoing industrial expansion.

India is another prominent player with its increasing electricity demand, urbanisation, and initiatives to bolster renewable energy capacity. In Europe, Germany stands out for its advanced technology adoption, particularly in eco-friendly and efficient switchgear solutions.

Meanwhile, Japan prioritises energy efficiency and resilient grids, maintaining a robust switchgear market. These nations lead due to their sizable market presence and commitment to modernising electrical distribution systems.

The switchgear industry relies on various raw materials, including copper and aluminum for conductors, steel for structural components and enclosures, insulation materials like polymers and ceramics, sulfur hexafluoride (SF6) gas for gas-insulated Switchgear (GIS), electrical contacts made of silver, copper, and alloys, and plastics and resins for housing and insulating parts.

Some of the key manufacturers of these raw materials include Aurubis, and Rio Tinto for copper and aluminum, ArcelorMittal and POSCO for steel, 3M, and DuPont for insulation materials, Honeywell, and Solvay for SF6 gas, Toshiba Materials, and Hitachi Metals for electrical contacts, and BASF, and Dow for plastics and resins. These manufacturers play a crucial role in the supply chain of the switchgear industry, ensuring a steady flow of essential materials for switchgear production.

The Global Switchgear Market is Segmented as Below:

By Insulation:

• Air-insulated
• Gas-insulated
• Oil-insulated
• Vacuum-insulated

By Voltage:

• Low
• Medium
• High

By End-use Sector:

• Residential
• Commercial
• Industrial
• T&D Utilities

By Geographic Coverage:

• North America 
  • The U.S.
  • Canada 
• Europe 
  • Germany
  • U.K.
  • France
  • Italy
  • Turkey
  • Russia
  • Rest of Europe 
• Asia Pacific 
  • China
  • Japan
  • South Korea
  • India
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America 
  • Brazil 
  • Mexico 
  • Argentina
  • Rest of Latin America 
• Middle East & Africa  
  • GCC 
  • South Africa
  • Egypt
  • Nigeria
  • Rest of the Middle East & Africa