According to a new report by UnivDatos Market Insights, Submarine Power Cable Market is expected to reach USD 19,767.42 Million in 2030 by growing at a CAGR of 10.3%. As the world's population continues to grow, the energy demand is also increasing, creating a enormous demand for submarine power cables to connect islands with the main grids and increasing cross-border interconnections for the transmission of electricity during the downtime between countries. Furthermore, the increasing shift towards renewable energy has led countries across the globe to install more wind power capacities.
For instance, according to US EIA, global energy demand is expected to increase by 47% by 2050, driven by population and economic growth, particularly in developing Asian countries. It further expects renewables to make up 27% of the 2050 global energy mix, which will be a 165% increase by renewables from 2020 levels.
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Currently, there are two types of submarine power cables High Voltage Alternating Current (HVAC) and High Voltage Direct Current (HVDC) cables. The wide adoption and advancement of the HVDC cables has increased the end-user applications and global-wise adoption of these power cables. HVDC cables in comparison with HVAC cables offers numerous benefits, including reduced transmission loses, ability to transmit electricity to longer distances, and certain infrastructure for HVDC power lines is cheaper than infrastructure for HVAC power lines. Furthermore, HVDC cables are more environment friendly as less copper or conductive materials are used in manufacturing of these HVDC submarine power cables, and thus bring down the cost of cabling HVDC systems.
On the other hand, the HVAC cables have been used for many years and are a mature and well-established technology and require less complex converter stations and voltage source converters (VSC). Furthermore, the maintenance and repair of these cables are relatively simple and cost effective when compared with HVDC cables. These cables are majorly used in connecting offshore oil and gas rigs to the onshore power grids and in the offshore wind energy farms to store generated electricity in the onshore grids. The advancements in these cables will further increase the adoption of these cables in the forecast period. Although, with various advantages these cables also have limitations, including lower transmission capacity compared to HVDC cables, thus resulting in reduced amount of power that can be transmitted. Furthermore, the transmission distance of HVAC cables is limited due to electrical losses or transmission losses and reactive power requirements.
A wide range of investments for advancement in Submarine Power Cable is further escalating the market opportunities. Some of the recent investments are:
· In February 2022, Prysmian Group announced plans to construct a new plant for manufacturing submarine power and telecom cables. The company will invest a total amount of USD 200 million to build this plant. The new plant is expected to fulfill the demand for submarine power cables generated under the Biden Plan to install 30 GW of new offshore wind capacity by 2030.
- In May 2023, Sumitomo Electric Group announced plans to construct a high-voltage cable manufacturing plant in the Scottish Highlands. The company will invest USD 252.75 million and will further help the UK build resilient supply chains for crucial infrastructure such as offshore wind projects.
Asia Pacific is expected to experience a significant growth rate in the projected period. The primary factors driving this growth are the increasing government initiatives towards renewable sources and clean energy, followed by the region's plans to lay interconnections to meet the upcoming energy requirements in the region. Furthermore, the rapid urbanization and industrialization in the region, coupled with increasing investments in offshore wind projects and cross-border interconnection initiatives by countries such as China, India, and Japan, are anticipated to drive the market. The governments in the region have started taking initiatives to reduce their carbon emissions and have started investing in renewable energy, thus developing more wind power installations in the region. Furthermore, the presence of numerous islands in the region and their increasing energy needs, coupled with advancements in HVDC power cables, have resulted in a huge demand for submarine power cables in the forecast period. For instance, the Philippines has more than 7,641 islands and plans to connect these islands with submarine power cables; for this, it has assigned projects to power cable-laying companies. Prysmian Group announced that it has designed a contract with Filipino grid operating company NGCP to design, supply, install, and commission a submarine power cable link to connect Panay and Negros islands in the Philippines.
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Conclusion
As the global shift towards renewable energy is increasing, this has created the need to install more offshore wind energy and the rising need to install more cables to interconnect countries' power grids to increase the sharing of excess renewable energy. The Submarine Power Cable market is poised for significant growth. It is expected to grow exponentially over the next five years, driven by increased offshore wind installations, increasing need to power islands and establish cross-border interconnections, advancement in HVDC cables, and constant demand from offshore oil and gas rigs. These submarine power cables offer numerous applications, including transmitting electricity underwater to the offshore power grids, connecting islands with the main grids, transporting electricity generated by the offshore wind turbines to the grids, and others. The adoption of these cables is challenged due to the high cost of installation and maintenance of these cables coupled with technical challenges, including harsh environments, deep ocean depths, stormy undersea landscapes, and changing bottom conditions. Furthermore, as these cables cross international borders, a huge amount of time for permissions coupled with the regulatory landscape of the respective country is also one of the major factors hindering the adoption of the submarine power cable.
