PTR Prognosis 2024: A Comprehensive Outlook on Power and Energy Trends

PTR Prognosis 2024: A Comprehensive Outlook on Power and Energy Trends

by Abdullah Bin Kamran, Amna Mumtaz, Asad Tariq, Azhar Fayyaz, Eyman Ikhlaq, Ijlal Khan, Muhammad Usman, Rafey Khan, Saad Habib, Saifa Khalid, Saim Talat, Analysts – at PTR Inc.

Introduction

The power and energy sectors are at the precipice of transformative changes in 2024, marking a pivotal year for the industry. This whitepaper aims to provide an in-depth analysis of key projections and trends within the power and energy sector, covering Electric Vehicle Charging Infrastructure (EVCI), High Voltage (HV) Switchgear, Medium Voltage (MV) Switchgear, Power Transformers, Distribution Transformers and Grid Technology Affinity Matrix. By presenting comprehensive insights into each segment, this whitepaper equips industry stakeholders with the knowledge needed to navigate and capitalize on the dynamic landscape.

 

Source: Open-Source Image

Electric Vehicle Charging Infrastructure (EVCI)

 

1.1 Surge in High-Powered EV Chargers:

The dawn of 2024 heralds an unprecedented surge in the electric vehicle (EV) realm, with a monumental uptick projected in the sales of high-powered EV chargers, breaching the 350 kW threshold. Orchestrated by a synergistic alliance involving governments, energy behemoths, and private investors, the ambitious plan envisages the global installation of over 5,000 high-powered chargers. Beyond mere numerical growth, this surge is strategically poised to ameliorate range anxiety and catapult the adoption of electric vehicles, particularly in the burgeoning commercial sectors of buses and trucks.

1.2 Vehicle-to-Grid (V2G) Technology:

The landscape of 2024 unfolds as a transformative epoch for the automotive sector with the burgeoning prominence of Vehicle-to-Grid (V2G) technology. As this technology inches closer to standardization, the industry braces for the unveiling of at least 20 new vehicle models equipped with V2G/V2H capabilities. Notably, Volkswagen spearheads this paradigm shift by committing to integrate V2G/V2H functionalities across its ID variants in Europe, thereby propelling the integration of electric vehicles with the grid and exemplifying an industry-wide commitment to sustainable innovation.

 

Figure 1. Distribution of 350 kW+ EV Chargers for Commercial Vehicles in 2024: 60% Buses, 40% Trucks 

 

1.3 Rise of Wireless Charging:

A paradigm shift ripples through the electric vehicle charging infrastructure (EVCI) sector in 2024, characterized by the escalating importance of wireless charging. As efficiency scales new heights and costs experience a downward trajectory, major global automotive and EVCI manufacturers strategically channel investments into wireless charging technologies. Tesla's groundbreaking announcement regarding active development in wireless charging technology serves as a resonant industry signal, with leading automotive companies and EV charger Original Equipment Manufacturers (OEMs) anticipated to tread a similar path. This trajectory underscores an industry commitment not just to technological advancement but also to enhanced efficiency, marking a pivotal directional shift.

1.4 EVCI Reliability:

In addressing the critical aspect of EVCI reliability, 2024 emerges as a year poised for a series of mandates. These mandates emphasize heightened transparency, streamlined roaming payments, and a commitment to minimum uptimes. Particularly targeted at regions like Europe and North America, where reliability concerns regarding electric vehicle charging infrastructure have gained prominence, these initiatives underscore a collective industry effort. Collaborative endeavors between EVCI service providers, manufacturers, and Charge Point Operators (CPOs) are anticipated to fortify the overall reliability of electric vehicle charging infrastructure. This collective effort aims to ensure a more robust and seamless charging experience for users and further cements the industry's commitment to user-centric reliability standards.

 

Source: Open-Source Image

 

High Voltage (HV) Switchgear

 

2.1 HV Switchgear Market Trends:

Projections for 2024 highlight a concerning trend in the U.S. HV Switchgear market, with lead times expected to triple. The increased lead times are intricately linked to the import-oriented nature of the U.S.'s HV Switchgear market, tightly integrated with the global supply chain experiencing heightened strain due to an upswing in global demand.

 

 

Figure 2: HV switchgear lead time in the US to reach 3x the pre-Covid level in 2024 

 

2.2 Strategic Shifts and HV GIS Surge:

Fueled by the Inflation Reduction Act (IRA) tax credits and a burgeoning demand for electrification and renewable energy initiatives, established Original Equipment Manufacturers (OEMs) embark on a strategic recalibration of their business models. This recalibration signifies a pronounced shift from import-driven approaches to the local production or assembly of HV Switchgear in the U.S. market. This strategic shift is underscored by notable players such as Hitachi Energy, who plan expansion, and the anticipated entry of two East Asian players, signaling a significant move towards domestic production. This trend is notably driven by the appealing incentives provided by the IRA and the increasing demand for a reliable and secure supply chain for critical grid infrastructure.

2.3 Impact on Global Supply Chains:

The extended lead times in the U.S. HV Switchgear market are inextricably linked to the dynamics of the global supply chain. The import-oriented nature of this market, coupled with persistent shortages in semiconductor components crucial to HV switchgear operation, contribute to the threefold increase in lead times. The strain on the global supply chain is heightened due to the upswing in global demand, posing additional challenges to meeting the market's demands. The industry's response to these challenges unfolds as a testament to its adaptability and resilience in the face of complex, interconnected global dynamics.

 

Figure 3: HV GIS anticipated YoY increase in market size (2023-2024)

 

Source: Open-Source Image

Medium Voltage (MV) Switchgear

 

3.1 GCC Market Dynamics:

Medium Voltage (MV) Switchgear market in the Gulf Cooperation Council (GCC) experiences a notable paradigm shift. The entry of Chinese players, Seiyuan Electric and Chint, introduces a formidable challenge to existing market players. While relatively lesser known in the region, these players strategically position themselves for a significant debut in the MV switchgear sector in 2024. Their approach involves leveraging competitive pricing and offering a diverse product portfolio to carve a niche in this dynamic market.

3.2 APAC Market Growth:

Anticipations in the Asia-Pacific (APAC) MV Switchgear market includes a doubling of market share for solid-insulated switchgear in 2024. Epoxy resin (EP) and cycloaliphatic epoxy (CAE) are expected to undergo substantial growth in the APAC MV switchgear market. Despite higher initial costs, solid insulation offers the advantage of lower operational and maintenance expenses compared to Gas-Insulated Switchgear (GIS). The SF6-free segment, particularly Solid Insulation Switchgear (SIS), is projected to secure a 15-20% market share in the APAC region, reflecting a significant shift towards environmentally friendly and cost-effective switchgear solutions.

 

 

Figure 4: SIS share in Sf6-free switchgear market (*Others include Sf6-free alternatives such as man-made gases (Novec), dry air, pressurized N2) 

 

3.3 U.S. MV Switchgear Outlook:

Muhammad Usman's outlook for the MV switchgear market in the United States emphasizes substantial growth in 2024. The increased adoption of Solid Insulation Switchgear (SIS) emerges as a notable driver, aligning with heightened concerns for grid resilience. A key development is the initiative to underground networks at an accelerated pace, particularly in the North American market. By 2024, it is anticipated that more than 10% of the U.S. network will be undergrounded. This surge is attributed to the need for optimal space utilization, fully integrating solar and wind energy into the mix. Transmission and Distribution (T&D) companies are increasingly preferring the undergrounding of networks, contributing to the anticipated 12% growth in the U.S. underground switchgear market between 2024-2025.

 

Figure 5: USA grid infrastructure overhead vs. underground share in 2024 

 

Source: Open-Source Image

 

Transformers

 

4.1 Power Transformer Price Trends:

In 2024, a projected 8-10% increase in Power Transformer prices looms on the horizon, as indicated by Azhar Fayyaz. This rise is attributed to the interplay of two key factors: fluctuations in commodity prices and adjustments in profit margins. The forecast predicts a 3-4% upswing in the commodity prices of transformer raw materials. Manufacturers are expected to leverage supply-demand imbalances to bolster their profit margins. Regional variations are expected in this trend, particularly in North America. Due to a heightened shortage of power transformers in the U.S. and a reliance on foreign sources, manufacturers in this region are projected to amplify their profit margins to a greater extent than the increase in raw material costs.

Figure 6: Projected Power Transformer (PT) Prices Increase in 2024 

 

4.2 Power Transformer Lead Time Challenges:

An additional challenge emerges with increased lead times of power transformers, leading to a potential delay of renewable energy targets by three years, as highlighted by Azhar Fayyaz. Global power transformer manufacturers are currently operating at full capacity, with a solid three-year backlog, particularly in the solar sector. The escalating global demand for standalone solar, wind, and grid-scale storage, driven by countries striving to meet established targets, is anticipated to intensify. This heightened demand will exacerbate the existing situation, resulting in prolonged lead times and subsequently delaying the grid interconnection of renewable energy projects. Consequently, most renewable energy targets, initially set for 2030, are now expected to be met no earlier than 2033 due to these delays.

4.3 Distribution Transformer Market Improvement:

In response to the supply-demand imbalance, domestic power transformer manufacturing in the U.S. is set to double in 2024. Power transformer manufacturers are establishing new facilities driven by sustained demand and a significant imbalance between supply and demand. Currently, only around 20% of the transformer demand in the U.S. is met by domestic supply, with the remaining 80% being imported. The United States is undergoing a multi-decade replacement program due to the aging of installed transformers beyond their 35 to 40-year design life, resulting in increased demand for power transformers. Manufacturers are strategically opening new facilities or expanding existing ones in the country. Recent investments include Hitachi Energy's $37 million expansion in Virginia, Delta Star's $30.2 million capacity expansion in Virginia, and WEG's extensive plan for transformer production across the Americas.

Figure 7: US Power Transformer (PT) Market is heavily import driven. 

 

4.4 U.S. Power Transformer Market Dynamics:

In 2024, there is an optimistic outlook for the lead times of distribution transformers in the U.S. market, as anticipated by Eyman Ikhlaq. Following the post-Covid period, where lead times escalated from weeks to months, the market is expected to witness a positive shift. The American Public Power Association reported a substantial 400% increase in average lead times between 2020 and 2022, resulting in the cancellation or delay of 1 out of 5 public utility projects due to transformer shortages. To address this supply-demand imbalance and alleviate the challenges associated with extended lead times, several transformer manufacturers have unveiled plans to establish over ten new manufacturing facilities in the U.S. market. These facilities are slated to commence operations in 2024, contributing significantly to the partial easing of the supply-demand balance. This proactive industry response aims not only to tackle current challenges but also to enhance the resilience and efficiency of the distribution transformer supply chain in the U.S. The anticipated improvement in lead times signals a positive trend in the market, reflecting efforts to enhance the availability and timely delivery of distribution transformers.

 

Figure 8: US Distribution Transformer (DT) Lead Time Growth 

 

 

Source: Open-Source Image

 

Grid Technology Affinity Matrix

5.1 European Smart Meter Coverage:

In the realm of European energy transformation, the drive towards grid modernization is gaining momentum, propelled by the ambitious targets set by EU (European Union) policies. As articulated by Asad Tariq, Europe envisions achieving an impressive 77% smart meter coverage by the year 2024. This strategic push is reflected in the specific targets set by member states, with Ireland aiming for a deployment of 2.4 million smart meters annually, Greece targeting 0.8 million installations, the United Kingdom ambitiously pursuing smart meter coverage in 74.5% of homes, and Belgium setting its sights on an 80% penetration rate.

Figure 9: Smart meters coverage in Europe is estimated to reach 77% by the end of 2024.

 

5.2 U.S. Grid Flexibility and BESS Dominance:

Simultaneously, across the Atlantic, the United States is embracing cutting-edge technology to enhance grid flexibility in 2024. Abdullah Bin Kamran highlights BESS as the top player in this landscape, surpassing other technologies such as FACTS, DERMS, and HVDC. The ascendancy of BESS is attributed to a confluence of factors, including stable investments, technological maturity, standardization efforts, and the establishment of more than five gigafactories. This evolution underscores the pivotal role played by BESS in shaping the future of grid resilience and adaptability in the United States.

Conclusion

The power and energy trends in 2024 present a dynamic and evolving landscape with both challenges and opportunities. This whitepaper provides a comprehensive analysis of key projections, enabling stakeholders to make informed decisions in navigating the complexities of the industry. By understanding the intricacies of each segment, industry players can strategically position themselves to harness the potential of a transformative year.

 

About the Authors

Abdullah Kamran serves as an Analyst at PTR Inc. He focuses on the topic of energy storage and battery energy storage systems. He specializes in research on the global energy storage market, covering areas such as market sizing of different markets, policy landscapes, market developments, pipelines of projects, installations of these projects, and the development of new battery technologies. He also covers the battery value chain and tracks the supply chain advancements in the industry, such as the installation of raw material plants and battery gigafactories. He holds a BS in Electrical Engineering from LUMS, which gives him the required technical knowledge on his topic.

Amna Mumtaz serves as Market Analyst at PTR Inc., specializing in eMobility and focusing on EV chargers forecast in the Asia-Pacific (APAC) region. With a Master's in Electrical Engineering from NUST, she served as a Research Assistant for a year before joining PTR. Amna's expertise lies in assessing and predicting trends, providing valuable insights through market sizing analyses. Her dedication and educational background make her a key contributor to PTR's eMobility team, shaping the future of the EV chargers market in APAC.

Asad Tariq serves as Senior Analyst at PTR Inc. He spearheads a dynamic team focused on analyzing markets of grid flexibility and modernization technologies. With expertise in High Voltage Direct Current (HVDC) transmission, AI-powered grid solutions, and flexible technology, Asad plays a pivotal role in developing a comprehensive global knowledge base. His profound understanding of AI-powered digital grid solutions positions him as a trusted source for insights into the rapidly evolving energy transition landscape. Asad's professional journey includes specialized studies delving into the applications and benefits of AI in the power sector. Prior to his role at PTR Inc., he contributed significantly as a research assistant at USPCASE - NUST, publishing two research articles in Elsevier. Asad holds an MSc and a BSc in Electrical Power Engineering from NUST Islamabad and UET Lahore, reflecting his commitment to excellence in the field.

 

Azhar Fayyaz serves as Senior Analyst at PTR Inc. His main area of interest is power systems. Currently, he is a product manager of transformer topic and is managing custom research projects for Fortune 500 clients globally. The topics under his mandate include power transformers, distribution transformers, switchgear, substation automation, power factor correction, etc. Azhar comes from a technical background and has an MSc. degree in Power Engineering.

 

Eyman Ikhlaq serves as an Analyst at PTR Inc., specializing in Transformers topics. She initiated her professional journey in the research sector at IDR, where she held the role of a Market Research Analyst for the APAC region. Having garnered a year of valuable experience scrutinizing market trends across diverse domains, Eyman transitioned to PTR as a Power Grid Analyst. Presently, her concentration revolves around conducting thorough analyses and providing insights into the field of Transformers. Her professional trajectory is marked by a solid technical background, having earned a Bachelor's degree in Electrical Engineering.

 

Ijlal Ullah Khan serves as an Analyst in the EVSE Department at PTR Inc. He has a skillset of deep analysis and forecasting of various applications and EV Charging Supplier equipment across different geographies primarily Nordics, Benelux and Iberia. He holds a Bachelor's degree in Mechanical Engineering from Ghulam Ishaq Khan Institute of Engineering Sciences and Technology.

 

 

 

Muhammad Usman is an Analyst at Power Grid, PTR, focusing on switchgear market analysis. He is enthusiastic about digitalization in the energy sector and has a track record of collaborating closely with clients to deliver effective solutions. With an Electrical Engineering background and a master’s degree in Energy Systems Engineering, Usman has contributed to market reforms in Pakistan’s electricity sector through previous involvement in a USAID project.

 

 

Rafey Khan is a Senior Analyst II and Team Lead for Electric Vehicle Charging Infrastructure service. His research focuses on e-mobility topics, specializing in electric vehicles and it’s charging infrastructure. He has worked with major EVCI system and component manufacturers, utilities and CPOs to conduct research and provide consulting to 30+ markets around the world. He holds comprehensive knowledge of the E-Mobility market of USA particularly around EV and EVSE technologies, emerging market trends, and regional competitive landscape. He is an electrical engineer from Lahore University of Management Sciences (LUMS) and holds a MBA from Institute of Business Administration (IBA). Before joining PTR, Rafey has gained valuable experience in Schneider Electric and K-Electric, which are a digital automation company and a utility company, respectively.

 

Saad Habib serves as a Market Analyst at PTR Inc. with a focus on High Voltage (HV) and Medium Voltage (MV) Switchgear within the Power Grid team, brings a wealth of experience to his role. Previously, as a Project Manager at Future Gulf Tech. Cont., a prominent project management and consultancy firm in Pakistan, he demonstrated his expertise in the field. Saad holds a Master's degree in Business Administration from CBM and a Bachelor's degree in Electrical Engineering from FAST National University. His professional strengths include keenly analyzing market trends, evaluating the impact of renewable energy updates, and assessing country policies that shape the switchgear landscape.

 

 

 

Saifa Khalid serves as Senior Analyst at PTR Inc. Her main area of interest is power systems. Currently, she leads the power grid research team in developing PTR’s syndicated power grid services and manages custom research projects for Fortune 500 clients globally. The topics under her mandate include HV switchgear, MV switchgear, power transformers and distribution transformers. With a background in Electrical Engineering, Saifa brings technical proficiency to her role, ensuring impactful solutions in the dynamic realm of power systems.

 

Saim Talat serves as Senior Analyst at Power Technology Research, where his work is centered on various aspects of e-mobility, with a specialization in electric vehicles and their charging infrastructure. His extensive experience includes collaborations with prominent EVSE system and component manufacturers, involving in-depth research and analysis of over 30 markets worldwide. Saim possesses a profound understanding of global EVSE technologies, emerging trends in the market, and the competitive landscape in different regions. Concurrently, he is pursuing a master's degree in electromobility, focusing on E-powertrain and sustainable energy production.

 

 

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