Synchronous Condensers Market Report

The production of electricity from nuclear or fossil fuels emits harmful gases that have a significant impact on the environment and human life. The phase-out of coal and nuclear power facilities has become a top priority for governments in several countries. In the electricity industry, the demand for power correction factors is also expanding. Globally, the prevalence of renewable power generating sources is also expanding. In addition, 2023 marks a step change for renewable power growth over the next five years. Renewable electricity capacity additions reached an estimated 507 GW in 2023, almost 50% higher than in 2022, with continuous policy support in more than 130 countries spurring a significant change in the global growth trend. The share of renewables in global electricity generation reached 30 % in 2023. These condensers are utilised to adjust the electrical power transmission grid's conditions. Several regulations have been enacted by the government to reduce power output from fossil and nuclear power plants and balance it with renewable sources. These factors will propel the synchronous condenser market over the forecast period.

Furthermore, numerous current power networks, particularly in advanced areas, are facing challenges with obsolete infrastructure that is unable to keep up with contemporary needs. For instance, the U.S. Department of Energy's Grid Modernization Initiative on the immediate need for upgrades to improve grid resilience and efficiency. Synchronous condensers can effectively tackle these problems by being incorporated into older systems, offering necessary reactive power assistance, and enhancing voltage control. In Europe, the European Union's package clean energy for all Europeans also emphasizes the significance of updating grid infrastructure to support renewable energy sources. By adding synchronous condensers to older grids, utilities can improve performance and stability, in line with global efforts to upgrade power networks.

The initial expenditure of synchronous condenser components is extremely high due to the widespread use of expensive raw materials such as aluminium and copper. These condensers, also, require a significant amount of electricity to operate continually. The original cost of new such condensers is quite high, as is the cost of refurbishing such equipment on the market. These condensers are DC stimulated synchronous motors, which are more costly than regular motors. Shunt reactors, STATCOM, capacitor banks, and static VAR compensators are some low-cost alternatives to the synchronous condenser. These alternatives can also provide grid stability or dynamic voltage control at a lower cost.

Furthermore, as energy systems advance, traditional synchronous condensers face notable obstacles from new technologies such as solid-state transformers and advanced battery storage systems. For instance, solid-state transformers provide better efficiency and flexibility than traditional transformers, which may lower the requirement for synchronous condensers in grid stability scenarios. Cutting-edge battery storage systems like the ones created by Tesla and other forward-thinking companies can offer quick and accurate reactive power assistance, reducing the need for synchronous condensers. The seamless integration into modern grids and decreasing costs of these technologies pose a threat to synchronous condensers. As a result, utilities and grid operators need to manage these competitive advancements as they consider integrating and ensuring the cost-effectiveness of traditional synchronous condenser solutions.

Synchronous condensers are key to stabilizing electrical grids by supplying reactive power and regulating voltage. They play a pivotal role in balancing reactive power, which enhances power quality and grid reliability. With the surge in renewable energy sources, which can cause voltage instability, synchronous condensers are indispensable for managing these fluctuations and maintaining steady power delivery. Their advanced capabilities are crucial for upgrading and fortifying power grids to meet the demands of modern energy systems and future growth. For instance, in July 2024, GE Vernova Inc. announced that it has secured an order with Transelec Holdings Rentas Ltd, a leading provider of high voltage systems in Chile, to deliver synchronous condensers and high-voltage substation for the Ana Maria and Monte Mina substation projects in Northern Chile. These two projects were part of a tender for “Voltage Control by Short Circuit Current Contribution”, which is part of the Chilean Government’s plan to support the energy transition and decarbonization in the country. In addition, in April 2023, Eaton stated that it has completed the acquisition of a 49% stake in Jiangsu Ryan Electrical Co. Ltd. (Ryan), a Chinese producer of power distribution equipment and sub-transmission transformer with estimated revenues of US$ 100 million in 2022. The acquisition will allow the firm to focus on electrical products and services. Furthermore, it expedites the company's global distribution, particularly in Asia-Pacific.

Demand for renewable energy has expanded significantly in the United States in recent years as a result of increasing industrialisation, depleting fossil fuels, and rising penetration of electric cars. According to the U.S. Energy Information Administration, utility-scale electrical producing facilities in the United States produced roughly, about 4,178 billion kilowatthours (kWh) (or about 4.18 trillion kWh) of electricity were generated at utility-scale electricity generation facilities in the United States. About 60% of this electricity generation was from fossil fuels such as coal, natural gas, petroleum, and other gases. Renewable energy sources accounted for around 22% of total power generation. The United States government is investing in the development of renewable energy generating capacity. Furthermore, the presence of key market players and the rise of the mining sector are projected to enhance the synchronous condenser market in the United States.