By Shaik Ejamani Peer Mohamed Mohamed Marican, Power Cables Senior Consultant, APAC, DNV
The Asia-Pacific (APAC) region’s high voltage (HV) cable market is estimated to cross $30 billion by 2032. One report estimates growth from $18.43 billion in 2023 to $31.66 billion by 2032, a CAGR of 6.2 per cent. Another analysis values the market at approximately 39.7 billion in 2023, and forecasts a 2.6 per cent CAGR from 2024 to 2032 to reach $48.3 billion. Although the figures vary, the forecasts are substantial, underlining significant opportunities for investors and project developers, as well as policy challenges for governments.
Key drivers of demand for HV cables
Countries such as China and India are at the forefront of urbanisation, leading to a surge in the need for reliable power transmission systems, including HV cables.
HV cables are essential for transmitting electricity generated from renewable sources over long distances with minimal losses. Therefore, the increasing investment in renewable energy projects is a significant driver of demand for HV cables, as countries aim to meet their clean energy targets.
Grid modernisation is crucial for accommodating the naturally fluctuating power output of variable renewable energy sources and enhancing overall grid reliability. Governments and utilities are investing in smart grid technologies that require advanced HV cables to facilitate real-time monitoring and management of electricity distribution.
Projects to facilitate electricity exchange among neighbouring countries help optimise power resources and stabilise grids, further increasing the demand for HV transmission solutions.
Advancements in cable technology, including higher voltage ratings and improved materials, are making HV cables more efficient and reliable. Manufacturers are continuously innovating to produce cables that can handle the growing electricity demands while minimising transmission losses. This technological evolution supports the expansion of HV cable applications across various sectors.
Investing in HV cables
Manufacturers of power cables must invest in expanding production by establishing new manufacturing plants, upgrading existing facilities and investing in advanced technologies to improve efficiency and productivity. To support this, governments can provide incentives and favourable policies for manufacturers.
Ongoing investment in research and development is crucial for developing innovative power cable technologies that can improve efficiency, reliability and sustainability. This includes research into new materials, such as high-performance insulation and conductor materials, as well as developing smart cable technologies that can enhance grid management and the integration of renewable energy sources.
Significant investment is needed to modernise grid infrastructure in the APAC region. This includes upgrading transmission and distribution networks, implementing smart grid technologies and integrating renewable energy sources into the grid. Governments and utilities should collaborate on comprehensive plans for grid modernisation and allocate resources accordingly.
The growth of renewable energy projects is a key driver of power cable demand. Investment is needed to develop and expand these projects, including the construction of transmission lines and substations to connect renewable energy to the grid. Governments can incentivise private sector investment in renewable energy projects through policies such as feed-in tariffs, tax credits and renewable energy targets.
Investment is needed in workforce development to train and upskill workers in the growing power cable industry. This includes technical training programmes, apprenticeships and partnerships with educational institutions to meet the industry’s needs.
Governments in APAC need to create a supportive regulatory framework, as well as policies to encourage investment in the power cable market. This includes setting clear targets for renewable energy adoption, providing financial incentives for investment in power infrastructure and streamlining approval processes for new projects.
Future outlook
DNV’s recent “ASEAN interconnector study” estimates that full regional cooperation on energy interconnections can cut $800 billion (approximately 11 per cent) from the total cost of decarbonising Association of South East Asian Nations (ASEAN) compared to individual country efforts. The study suggests that such cooperation would require additional electricity interconnection capacity involving up to 3.57 million km of cables. This would increase global demand for transmission cables by approximately 29 per cent compared to projections in DNV’s 2023 Energy Transition Outlook, which outlines the “most likely” global energy transition scenario.
