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development plans and eligibility for EU financial assistance in the form of grants for
studies and works as well as innovative financial instruments under the Connecting
Europe Facility (CEF). From 2014 to 2019, CEF has provided up to EUR 134 million of
financial assistance related to different smart electricity grids projects across the EU.
The following two key technologies are assessed in more detail: High-voltage direct
current (HVDC) systems, and digital solutions for grid operations and for the integration
of renewables.
i) High-voltage direct current (HVDC) systems
Technology: higher demand for cost-effective solutions to transport electricity over long
distances, particularly, in the EU, to bring power generated by offshore wind to land,
increases demand for HVDC technologies. According to Guidehouse Insights, the
European market for HVDC systems will grow from EUR 1.54 billion in 2020 to EUR
2.74 billion in 2030, at a growth rate
of 6.1%
,
. The global market is expected to
be around EUR 12.5 billion (2020), with the main investments in HVDC taking place in
Asia, where much of the market is taken up by Ultra-HVDC
. HVDC equipment is very
costly, and projects to build HVDC connections are therefore very expensive. Given the
technological complexity of HVDC systems, their installation is generally managed by
manufacturers
.
Value chain analysis: the value chain for HVDC grids can be segmented along the
different hardware components needed to realise an HVDC connection
.
The cost of
HVDC systems is accounted for largely by converters (about 32%) and cables (about
30%)
. In the converter stations’ value chain, power electronics
play a key role in
determining the efficiency and the size of the equipment. Energy-specific applications
represent only a small part of the global market in electronic components
, but offshore
grids and wind turbines depend on their functioning well under offshore conditions. R&I
Growth rates in this chapter are reported as compounded annual growth rates (CAGR).
Guidehouse Insights (2020) Advanced Transmission & Distribution Technologies Overview. Retrieved at
https://guidehouseinsights.com/reports/advanced-transmission-and-distribution-technologies-overview
EU energy models (e.g. Primes) do not model HVDC separately, so no longer-term figures are available. However,
it is clear that the HVDC market is expected to grow consistently, especially given the growth of the offshore
energy market.
UHVDC is not used in the EU. It is of particular use in transporting electricity over very long distances, which is
less important in the EU. UHVDC is also less attractive in the EU as permitting is more difficult, for example
because cable towers are higher than normal high-voltage transmission cable towers. The global market for
UHVDC is estimated at EUR 6.5 billion, mostly in China.
By way of comparison, turnkey HVAC systems are often delivered by engineering, procurement, and construction
firms.
Major converter station components include the transformers, converters, breakers, and power electronics used to
convert power from AC to DC and back again. Line-commutated converters (LCCs), also known as current source
converters (CSCs), and voltage-source converters (VSCs) are the primary commercial HVDC converter
technologies. Both LCC and VSC stations, being more complex than HVAC substations, are also more
expensive
. Despite the integration of common technologies, HVDC transformers and converter stations are not
standardised, and designs and costs are highly dependent on local project specifications.
In the EU the costs of cables are typically higher: Competitiveness report by ASSET for the European Commission.
Power electronics is an essential technology to integrate direct-current (DC) generation and consumption that is
used in many parts of the (future) energy system, such as PV installations, windmills, batteries, and HVDC
converters. Power electronics technology is based on semiconductor technology and allows control of voltage or
current, for example, to manage the grid and convert electricity between AC and DC. It could, therefore, be
addressed in many parts of this report, but because of a specific challenge to do with offshore wind and grids, it is
dealt with here.
The total market for power electronics, i.e. passive, active, electromechanical components, was estimated at EUR
316 billion in 2019: Global active electronic components market share, by end user, 2018.
www.grandviewresearch.com