North America High Voltage Direct Current (HVDC) Market

North America HVDC Market Size and Share Analysis

The North America high voltage direct current (HVDC) market is expected to reach a value of US$3.6 Bn by 2024. It is projected to grow at a CAGR of 6.8% from 2024 to 2031, reaching a market value of US$5.8 Bn by 2031.

Key Highlights of the Market

• Enhanced integration of renewable energy sources is a thriving market trend.
• Modernization of grid infrastructure is on the rise, targeting enhanced reliability and stability.
• Facilitation of efficient cross-border energy trading benefits market growth.
• Supporting growing urban centers, and industrial expansion with enhanced power transmission favor the expansion of HVDC market in North America.
• Alignment with governments’ climate and energy policy goals is expected to accelerate clean energy adoption.

Market Attributes	Key Insights
North America HVDC Market Size (2024E)	US$3.6 Bn
Projected Market Value (2031F)	US$5.8 Bn
Forecast Growth Rate (CAGR 2024 to 2031)	6.8%
Historical Growth Rate (CAGR 2019 to 2023)	6.3%

Market Introduction and Trend Analysis

The North America HVDC market is experiencing significant growth driven by technological advancements and the increasing integration of renewable energy sources.

HVDC technology plays a pivotal role in efficiently transmitting electricity over long distances, minimizing energy losses compared to traditional AC systems. This capability is crucial for connecting remote renewable energy generation sites, such as offshore wind farms, to major urban centers and industrial hubs across the continent.

Moreover, ongoing grid modernization efforts to enhance reliability and stability further bolster the demand for HVDC solutions, enabling seamless integration of renewable energy into the power grid.

Several factors are propelling the growth of the market. The expansion of renewable energy projects, including offshore wind farms and solar installations, necessitates advanced transmission technologies like HVDC to transport electricity efficiently over vast distances.

Initiatives aimed at upgrading aging grid infrastructure to accommodate higher renewable energy penetration levels enhance the market's prospects.

Supportive government policies promoting clean energy adoption and initiatives to enhance cross-border energy trading capabilities contribute to the market's expansion. These factors collectively underline HVDC's critical role in facilitating a sustainable and resilient energy future across North America.

In recent years, the North America HVDC market has experienced significant growth, driven by key trends including enhanced integration of renewable energy sources, modernization of grid infrastructure to enhance reliability and stability, and facilitation of efficient cross-border energy trading.

Supportive environment for growing urban centers, industrial expansion with enhanced power transmission capabilities, and alignment with climate and energy policy goals of governments will accelerate clean energy adoption, thereby elevating the prospects of the market in this region.

The trends underscore the region's commitment to sustainable energy practices and improving energy efficiency through advanced HVDC technologies.

Historical Growth and Course Ahead

Between 2019 and 2023, the market demonstrated strong growth, spurred by the region's increasing focus on integrating renewable energy and modernizing grid infrastructure.

Significant investments were made in HVDC transmission projects aimed at connecting remote renewable energy sources, such as offshore wind farms, to major urban centers and industrial hubs across the continent.

Technological advancements in HVDC systems, including Voltage-Sourced Converter (VSC) technology and improved cable systems, played a crucial role in enhancing transmission efficiency and capacity.

Key drivers during this period included supportive government policies promoting clean energy initiatives, efforts to ensure power grid stability amidst rising renewable energy adoption, and collaborations to enhance cross-border energy trading capabilities.

The North America HVDC market is poised for substantial growth from 2024 to 2031, driven by continued efforts to decarbonize the energy sector and achieve ambitious renewable energy targets.

Expansion in offshore wind projects, such as those planned along the Northeast coast and in the Great Lakes region, will rely heavily on HVDC technology for efficient electricity transmission over long distances.

Investments in upgrading grid infrastructure across the continent, particularly to accommodate large-scale renewable energy integration, will further bolster market expansion.

Advancements in HVDC technology, including increased system capacities and enhanced converter technologies, are expected to improve grid reliability and operational flexibility.

Projects aimed at enhancing interconnection between regional grids, like those supporting bi-directional power flows between Canada, and the US, highlight HVDCs pivotal role in supporting North Americas energy transition and reducing carbon emissions.

Key Growth Drivers

Integration of Renewable Energy and Grid Modernization

The integration of renewable energy sources and the ongoing modernization of grid infrastructure represent significant drivers for the North America HVDC market.

As regions across the continent aim to increase their reliance on renewable energy, such as wind and solar power, HVDC technology offers crucial support.

Unlike traditional alternating current (AC) systems, HVDC allows for efficient long-distance transmission of electricity, minimizing energy losses over extended distances.

This capability is particularly valuable for connecting remote renewable energy generation sites to population centers and industrial hubs, where electricity demand is high but local renewable resources may be limited.

The modernization of grid infrastructure involves upgrading aging AC transmission networks to handle the complexities of renewable energy integration.

HVDC systems provide flexibility in managing power flows, stabilizing the grid, and supporting the bi-directional transfer of electricity between regions or countries.

This capability is exemplified by projects like the Marinus Link in Australia, and the SunZia Transmission Project in the southwestern US, which aim to enhance grid stability and optimize renewable energy utilization through advanced HVDC technology.

Government Policy Support, and Climate Goals

Government policies promoting carbon emissions reduction and renewable energy adoption are driving the market. HVDC technology plays a pivotal role in achieving these goals by enabling efficient transmission of renewable electricity over long distances.

This supports ambitious targets for renewable energy deployment and enhances energy security by diversifying energy sources.

HVDC systems facilitate cross-border energy trading and grid interconnections, aligning with government efforts to enhance resilience against disruptions and optimize renewable energy integration.

International projects like Greenlink highlight collaboration in advancing energy transition goals through advanced HVDC infrastructure, contributing to sustainable development objectives globally.

Factors Impeding the North America HVDC Market

High Initial Investment Costs

The market faces significant barriers due to high initial investment costs. Implementing HVDC transmission systems requires substantial capital for specialized equipment like converters and transformers, coupled with complex engineering and construction processes.

Despite long-term benefits like reduced transmission losses, these upfront expenses deter utilities and developers from investing without assured profitability and adequate financing.

Regulatory and Permitting Challenges

Complex regulatory and permitting processes present another major restraint for HVDC adoption in North America.

Projects span federal, state, and local jurisdictions, each with varying rules and standards. This leads to prolonged approval timelines, cost uncertainties, and the need for extensive environmental assessments and public consultations.

The diverse regulatory frameworks across different regions further complicate project planning and compliance efforts, delaying widespread HVDC deployment.

Future Opportunities for HVDC Companies in North America

Expansion of HVDC Interconnections

The presence of major North America HVDC Market  interconnections like the Atlantic Wind Connection, and Plains & Eastern Clean Line indicates a growing trend towards integrating renewable energy sources across the grid.

While this presents opportunities for further expansion of HVDC interconnections within the US, it also unlocks a host of potential opportunities in the neighboring countries like Canada, and Mexico.

Such expansions can enhance grid resilience, improve energy efficiency, and facilitate the integration of renewable energy resources, thereby supporting sustainable energy goals.

Support to Renewable Energy Integration

The increasing deployment of HVDC transmission capacity, particularly in regions like the US, and Canada, underscores opportunities to support large-scale integration of renewable energy sources.

HVDC systems are well-suited for long-distance transmission of renewable energy from resource-rich areas to population centers, helping to mitigate transmission losses and optimize grid operation.

Initiatives like the Mackinac B2B project exemplify efforts to leverage HVDC technology for connecting renewable energy projects and enhancing energy security.

Category-wise Analysis

Category	Projected CAGR through 2031
Transmisson Type - Submarine HVDC Transmission System	6.5%
End Use - Converter Stations	6.8%

Submarine HVDC Transmission Systems Continue to Gain Prominence in Power Networks

The submarine HVDC transmission system segment is becoming increasingly pivotal in the North American market due to its efficiency in facilitating cross-border power trading and integrating offshore renewable energy sources. It offers a cost-effective solution for transmitting high power across long subsea distances, which is crucial for connecting offshore wind farms to the grid.

Notable projects such as the Atlantic Wind Connection, and the Grain Belt Express Clean Line, with investments worth Millions, underscore the growing demand for submarine HVDC technology.

The segment's ability to efficiently transmit power over vast underwater expanses makes it indispensable for future power transmission networks.

Innovations like the SOO Green HVDC Link, which plans to install underground cables along railway rights of way, further highlight the versatility and expansion potential of HVDC systems.

As more offshore wind farms and international interconnections emerge, the submarine HVDC transmission system segment is set to drive substantial growth and development within the broader HVDC transmission market.

Converter Stations Dominate Adoption

The market for HVDC in the US is dominated by the industrial sector. For industrial facilities to support operations and manufacturing processes, a reliable and constant power supply is necessary.

Thermal power plants, particularly those fueled by natural gas, offer the necessary capacity and flexibility to meet the energy demands of industrial consumers.

Industrial facilities often operate around the clock, making them ideal customers for HVDC seeking consistent revenue streams. The Industrial sectors reliance on underscores its importance in driving market demand and shaping investment decisions within the North America power industry.

Region-wise Analysis

Country	CAGR through 2031
United States	6.8%
Canada	7.1%

United States to Account for the Significant Share in the Market

The US stands out the primary contributors to the North America HVDC Market  showcasing a robust market. The US is driving the market for HVDC technology through significant developments and strategic initiatives aimed at enhancing energy transmission efficiency and supporting sustainable energy goals.

Key developments such as the SunZia Transmission Project underscore the country's commitment to expanding renewable energy capacity and improving grid reliability.

The partnership between Hitachi Energy and Pattern Energy to deploy HVDC Light® technology for the SunZia project highlights a pivotal advancement. This project aims to connect a massive wind energy source in New Mexico to broader Western states, demonstrating HVDC's capability to efficiently transmit large-scale renewable energy over long distances into regional power grids.

Such initiatives not only address the growing demand for clean energy but also boosts grid resilience and supports economic growth through enhanced energy availability.

Collaborations like the one between Hitachi Energy, and Grid United further propel the US HVDC market forward. These partnerships focus on bridging regional power grids, particularly between the East and West Coasts, to alleviate transmission bottlenecks and facilitate efficient power sharing.

By integrating HVDC technology into these transmission projects, the US aims to optimize energy distribution across diverse energy markets, aligning with government initiatives to accelerate the transition to sustainable energy sources.

The strategic deployments and collaborations underscore the pivotal role of HVDC technology in advancing the US energy infrastructure, promoting grid modernization, and achieving broader environmental and economic objectives.

Canada Set for a Notable CAGR Through 2031

Canada Market is projected to secure a CAGR of 7.1% in the forecast period from 2024 to 2031. Canada is advancing the HVDC market with its current 12 GW capacity, predominantly utilizing line commutated converter (LCC) technology for extensive interconnections established in the 1980s and 2010s.

Recently, the introduction of voltage source converter (VSC) HVDC technology by ABB in 2018 with the Maritime Link project marks a shift towards more flexible and efficient transmission solutions.

Significant projects like Nelson River 3 and the Eastern Alberta Transmission line highlight Canada's focus on integrating renewable energy and enhancing grid stability.

By investing in both LCC and VSC technologies, Canada is strengthening its energy infrastructure, driving efficient energy distribution, and supporting sustainable energy objectives.

Competitive Landscape Analysis

There is a significant change taking place in the market. Once dominated by coal-fired power facilities, natural gas and renewable energy sources are now in competition with one another to shape the landscape natural gas. The various benefits include smooth integration with renewable energy sources, constancy as baseload power, and short ramp-up and ramp-down durations in response to variations in demand.

However, elements like the price of natural gas and laws designed to reduce carbon emissions will determine its destiny. Conversely, declining costs and government incentives are driving a large development in renewables. Although wind and solar energy are weather-dependent, advances in battery storage technology could help to mitigate this problem.

The market is moving towards increased integration of renewable energy sources, lower emissions, and increased efficiency. Major companies are concentrating on technological developments, strategic M&A, and partnerships to fortify their positions in the market and adapt to the shifting needs of the energy industry.

The future of the market will likely involve a balanced mix of these sources, with the specific proportions depending on technological advancements, environmental policies, and economic considerations.

Recent Industry Developments North America HVDC Market

June 2024

GE Vernova Inc. and Seatrium Limited announced they won a major contract from TenneT TSO B.V. They will build a 2-gigawatt offshore power system in the Netherlands. Work starts in June 2024, and the system should be ready by 2031, helping to boost the country’s offshore energy capabilities.

April 2024

Hitachi Energy announced a significant partnership with Pattern Energy for the SunZia Transmission Project. This project aims to connect the 3,515 MW SunZia Wind project in New Mexico to Arizona and other Western states, creating one of the world’s largest transmission links for renewable energy. The agreement involves Hitachi Energy providing long-term service solutions for the HVDC link using its HVDC Light® technology. This advanced technology will efficiently transmit large amounts of wind power over an 885-kilometer distance into the regional power grid. The project is expected to enhance sustainable energy availability for homes and businesses across the region upon its completion in 2025.

March 2024

Hitachi Energy and Grid United announced a pivotal collaboration to deploy HVDC technology across transmission projects linking the eastern and western regional power grids in the US. These initiatives aim to significantly enhance transmission capacity, facilitating efficient power sharing between energy markets amid rising electricity demand. By bridging the east-west divide, these projects address critical bottlenecks in the US energy transition, aligning with government priorities to accelerate sustainable energy goals set forth by the US Department of Energy.

December 2022

TransWest Express LLC chose Siemens Energy Inc. to provide the technology for the TransWest Express Transmission Project. Siemens Energy will design, build, and install the high-voltage equipment for this 732-mile transmission line, which will connect Wyoming, Utah, and southern Nevada. The project will include both high-voltage direct current (HVDC) and alternating current (HVAC) segments.

North America HVDC Market Report Scope

Attributes	Details
Forecast Period	2024 to 2031
Historical Data Available for	2018 to 2023
Market Analysis	US$ Million for Value
Key Country Covered	United States Canada
Key Market Segments Covered	Transmission Type Component Application Region
Key Companies Profiled in the Report	ABB Ltd. General Electric Siemens AG Alstom SA Schneider Electric SE Hitachi Energy LS Industrial Systems Co Ltd Cisco Systems, Inc. NKT A/S Prysmian SpA Toshiba Corporation
Report Coverage	Market Forecast and Trends Company Share Analysis Competitive Intelligence DROT Analysis Market Dynamics and Challenges Strategic Growth Initiatives
Customization & Pricing	Available upon request

North America HVDC Market Segmentation

By Transmission Type

• Submarine HVDC Transmission System
• HVDC Overhead Transmission System
• HVDC Underground Transmission System

By Component

• Converter Stations
• Transmission Medium (Cables)
• Misc.

By Application

• Bulk Power Transmission
• Interconnections
• Offshore Wind Integration
• Urban and Metropolitan Integration
• Asynchronous Grid Interconnections

By Country

• United States
• Canada

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