HV & EHV underground and subsea market worth $15.5 bn

The global market for HV and EHV underground and submarine cables systems is worth $15.5 billion for 2014, according to CRU's latest HV & EHV Market Outlook report. 

CRU estimates that for 2014, the HV and EHV submarine power cable market is worth around $4.5 billion in terms of total project value, while the global HV and EHV underground cable market is worth an estimated $5.5 billion in terms of cable cost alone. Assuming that the cable cost is around 50% of the total system installed cost, the total market for HV and EHV underground cables, accessories and installation is worth around $11 billion.

For the HV and EHV underground cable sector the total value of the cable alone represents around 11% of the total insulated power cable market. However, in terms of margin generation and therefore importance to the cable, its importance is much greater since typical margins for these cables is much higher than for LV and MV power cables.

"All of the sectors covered in the HV & EHV Market Outlook report are growing at a much faster rate than the cable industry as a whole, with the submarine sector poised to record the strongest growth," said Rob Daniels, principal consultant, Wire & Cable, CRU and author of the report.

The underground cable sector is being driven by the need to supply greater amounts of power into urban areas along with a growing resistance to overhead transmission lines near to residential areas or in areas of outstanding natural beauty. This resistance to overhead lines means that there is growing use of underground cables in non-urban transmission lines particularly at voltages below 230kV.

The submarine cable market is being driven by two main issues, the need to interconnect grids to meet the challenges of using more renewable energy, and the need to get power generated by offshore wind farms to consumers.

The need to increase grid interconnection is also leading to greater investment in new over land transmission lines. In many parts of the world the transmission grids saw a period of big investment after the Second World War. Many of the cables installed then are now nearing the end of their life and so there is also growing demand from the replacement of old cables.

Competition is growing in the HV underground cable sector with around 200 factories theoretically able to make HV cables, but strong growth should help reduce the impact of increasing capacity. For the other sectors, margins will remain relatively high and CRU expects all the sectors in this report to remain attractive ones for the cable industry.

The HV and EHV Cables Market Outlook looks at the global market for underground and submarine power cables and is published every two years.

The report covers all HV and EHV underground cables, and all HV and EHV submarine cables along with MV offshore wind farm submarine array cables. This study does not cover bare overhead conductors. In looking at the market CRU has defined HV as 60kV to 230kV and EHV as any cable rated above 230kV.

This split is used since for underground cables rated at voltages up to 230kV there are quite a number of potential suppliers and the barrier to entry is now not that great so it is relatively easy for new companies to enter this market.

In contrast the production of EHV cables above 230kV remains limited to a relatively small number of manufacturers and the barriers to entry remain high. For the submarine cable sector CRU has also split the market between cables used for grid interconnections and cables associated with the development of offshore wind farms.

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