Saqib Saeed's talk on EU Market Developments for the Transmission infrastructure at CWIEME Berlin 2018

1. Market Developments in EU
Transmission Infrastructure
Power Technology Research
Saqib Saeed
Principal Analyst
Transmission and Distribution Systems

2. Agenda
• EU-28 Grid Planning Overview
• High Voltage Direct Current Market
• Power Transformers Market
➢ EU-28
➢ North America
• Transformers supply-demand analysis

3. Power Technology Research
Who We Are
Customers are component manufacturers,
OEMs, distributors, energy-focused EPCs.
Focus on Power and Industrial markets.
25 years of combined
experience.
Syndicated and custom
research.

4. Type of Work
What We Do to Support Our Customers
Market
Sizing &
Forecasting
Competitive
Analysis
Market
Accessibility
Installation
Base
Annual
Market
Growth
Forecast
Market
Shares
SWOT
Analysis
Benchmarking Cost
Breakdown
Business
Practices
Regulatory
Landscape
Product &
Market Trends
Sales Channel
Analysis
Project
Specific
Business
Development
Support

5. Grid Planning Overview
(EU-28)

6. Transmission Sector Planning (2019-2030)

7. Transmission Sector Planning (2019-2030)
2%
9%
89%
Transmission projects voltage classification
(2019-2030)
100-200 kV 201-300 kV 301-400 kV
79%
21%
Transmission projects technology classification
(2019-2030)
AC DC

8. Transmission Sector Planning (2019-2030)
19%
81%
Transmission projects components classification
(2019-2030)
Substation Transmission Medium
73%
20%
7%
Transmission Medium projects
(2019-2030)
OHL Cables (Subsea) Cables (Underground)

9. Projects by Commissioning Year
0
5
10
15
20
25
30
35
40
45
2019 2020 2021 2022 2023 2024 2025
Count of Transmission Projects by Commissioning Years

10. Projects by Commissioning Year
0
5
10
15
20
25
30
35
2019 2020 2021 2022 2023 2024 2025
Transmission Medium Projects by Commissioning Year

11. Projects by Commissioning Year
0
1
2
3
4
5
6
7
8
9
2019 2020 2021 2022 2023 2024 2025
Transmission Substation Projects by Commissioning Year

12. High Voltage Direct Current
(HVDC) Market

13. AC vs DC Transmission Projects in Europe
79%
21%
Planned Projects in the Transmission Sector (2019-2030)
AC DC

14. HVDC Projects in Europe (2019-2025)
0
1
2
3
4
5
6
7
8
9
10
2019 2020 2021 2022 2023 2024 2025
HVDC Projects under Commissioning and
Planning (2019-2025)
4
4
9
7
15
HVDC Projects in EU-28 (2019-2025)
Italy France Germany United Kingdom Rest

15. HVDC Projects in Europe (2019-2025)
0
2000
4000
6000
8000
10000
12000
14000
16000
2019 2020 2021 2022 2023 2024 2025
MW
HVDC Projects Capacity under Commissioning and Planning (2019-2025)

16. HVDC Projects in Europe (2019-2025)
2%
6%
41%
22%
30%
HVDC Projects Voltage Classification (2019-2025)
200 kV 300 kV 320 kV 400 kV 500 kV

17. HVDC Projects by Region
0
10
20
30
40
50
60
70
80
90
Africa Asia Australia &
Oceania
Europe Middle East North
America
South
America
HVDCProjects
Number of HVDC Projects (1990-2030)
VSC
LCC

18. Power Transformers Market
➢ North America
➢ EU-28
➢ Germany

19. LPTs Market Analysis
Why Separate Power Transformers from Distribution Transformers
A globally traded product
• Demand impacts the supply beyond regional boundaries
Highest efficiency requirements
Long lead times
• A custom designed equipment
Special raw materials
• Electrical Steel and its impact on the prices

20. Significant Markets Globally
Markets to Keep an Eye on in the Coming Years

21. Annual Power Transformer Revenue
US and Canada Market to See a Slight Growth Beyond 2019
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
2016 2017 2018 2019 2020 2021 2022 2023
Billion$
North America Market Size 2016-23 (B$)

22. Annual Power Transformer Revenue
US and Canada Market to See a Slight Growth Beyond 2019
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
2016 2017 2018 2019 2020 2021 2022 2023
Billion$
North America Market Size 2016-23 (B$)

23. Annual Power Transformer Revenue
US and Canada Market to See a Slight Growth Beyond 2019
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
3.8
4
2016 2017 2018 2019 2020 2021 2022 2023
Billion$
North America Market Size 2016-23 (B$)

24. EU-28 Market - Annual Revenue
EU-28 Market Experiencing a Steady Growth
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
1.3
1.4
2016 2017 2018 2019 2020 2021 2022 2023
Billion$
EU-28 Market Size 2016-23 (B$)

25. EU 28 Market – Market Drivers
Renewable Additions and Grid Adaptation Key Market Drivers
• New additions more than the replacements
• Central European countries saw 6% annual increase in 2017
• Grid adaptation and renewable generation
• Onshore and offshore wind power projects
• At the moment growth is driven by units
• Prices have gone down 2016 onwards
• From 2014 to 2016, Growth because of price increase

26. Power Transformers Market in Germany
0
20
40
60
80
100
120
2019 2020 2021 2022 2023 2024 2025
MillionUSD
Power Transforemrs Makret in Germany
(2019-2025)

27. Power Transformers Lead Times
Lead Times Can Vary Depending on a Range of Factors
• Need Assessment
• RFP (2 months)
• Bidding (2 months)
• Negotiation & Technical Specs. (2 months)
• Design (3-4 months)
• Purchase materials (3-4 months)
• Production (3-4 months)
• Testing (2 weeks)
• Onsite installation (Up to few months)
Typical
9-12
Months

28. Power Transformers Lead Times
Lead Times to be Stable in Years to Come
0
10
20
30
40
50
60
2016 2017 2018 2019 2020 2021 2022 2023 2024
Weeks
EU-28 Lead Times 2016-2024 (Weeks)
Shipping Manufacturing Raw materials Design

29. Supply Side Analysis

30. Supply and Demand – Short Term
Globally there is a Surplus in Manufacturing Capacity
• Tier 1 players operating at 75-80% capacity utilization
• Can be broken down to regional level
• Delays in India’s generation plans
• Overcapacity is expected to increase in next 2 years
• New manufacturing facilities in emerging markets

31. Supply and Demand – Long term
Supply-Demand Gap will Narrow Down in the Long Term
• Strict efficiency requirements will help tier 1 players to ramp up the capacity
utilization
• Tier-1 players will shift their capacities towards emerging markets
Utilized
81%
Idle
19%
2025 Capacity Utilization
Utilized
70%
Idle
30%
2016 Capacity Utilization

32. Supply and Demand
Globally there is a Surplus in Manufacturing Capacity
1200
1400
1600
1800
2000
2200
2400
2017 2018 2019 2020 2021 2022 2023 2024 2025
GVA
Global Supply-Demand Gap
Supply Demand

33. EU 28 Market – Key Trends
Interconnected Grids and Digital Substations to Affect the Market
Germany to be the
biggest market
2017-23
Asset Health
Monitoring to
increase
Interconnected
grids
Digitalization
of Substations
Tier-1 players
dominating the
market

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Contact Us
Sunnyvale,
California
Munich,
Germany
London,
UK
Tokyo,
Japan
Saqib Saeed
Principal Analyst – T&D
T. +49 (0)89 12252374
M. +49 (0)176 43408939
M. +1 408 622 0564
saqib.saeed@powertechresearch.com Seoul,
South Korea