Middle-East and Africa DC Distribution Networks Market - Growth, Trends, and Forecasts (2023 - 2028)

The Distribution Networks Market of the Middle East and Africa DC is expected to register a CAGR of over 6% during the forecast period.

The market was negatively impacted by COVID-19 in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the long term, factors such as growth in the renewable energy sector, compatibility with battery storage devices, and advantages over AC distribution, like power-sharing between systems with different frequencies, are expected to drive the market over the forecast period.
• On the other hand, high initial costs and complexity compared to generic distribution networks are expected to hinder the market's growth.
• Nevertheless, Electric Vehicle (EV) fast charging systems are expected to witness significant demand, owing to the growing environmental concerns and increasing demand for DC infrastructure. They are seen as a long-term opportunity for the DC Distribution Networks Market.
• With increasing electricity demand, Saudi Arabia is expected to dominate the Middle-East and Africa DC Distribution Networks Market during the forecast period.

MEA DC Distribution Networks Market Trends

Electric Vehicle (EV) Fast Charging Systems Witnessing Significant Growth

• The Electric Vehicle (EV) charging system segment is booming due to many factors, such as increasing adoption of electric vehicles, supportive government policies across the Middle East and African countries, etc. Moreover, oil is considered a limited resource, and an alternate source of transportation fuel like electricity is not only a smart investment but also an inevitable one.
• Battery Electric Vehicles (BEVs) sales in Africa and the Middle East reached 7.6 thousand units in the first half of 2021. The number of Plug-in Electric Vehicles (PEVs), including Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs), has been rising, which, in turn, is expected to drive the DC distribution network market during the forecast period.
• The development in power electronics technology, such as microgrids, is mostly connected to distribution networks. In the power industry, the flexible DC distribution network has got attention for its lower integration and construction costs, energy reduction loses, and higher reliability.
• The demand for adequate charging equipment is expected to increase during the forecast period. As EVs are limited by driving range and can usually travel up to 330 miles before recharging, the need for charging infrastructure is imperative for the success of these kinds of vehicles. However, in the current market scenario, charging stations are yet to become a viable economic investment due to their lower utilization and relatively high upfront cost, particularly for DC.
• In June 2022, the UAE’s Ministry of Energy and Infrastructure signed an agreement with Siemens technology to install ultra-fast EV chargers, which will also help reduce carbon emissions in the country. Ten Siemens Sicharge D 160 kW ultra-fast chargers will be installed on the highways in Ras Al Khaimah, Ajman, Umm Al Quwain, and Fujairah. To meet changing market demands, the chargers have a scalable power of up to 300 kW and can be expanded with additional external dispensers for up to two additional charging cables.
• Therefore, based on the aforementioned factors, electric vehicles' fast charging systems is likely to witness significant demand for the DC distribution network market in Middle-East and Africa region during the forecast period.

Saudi Arabia Driving the Market Demand

• The Saudi power sector is on a growth trajectory and is racing to keep up with growing electricity demand. The country is undergoing structural reforms in the power sector that mainly aim at privatizing the sector, including the unbundling of the state-run Saudi Electricity Company (SEC). Investments of more than USD 130 billion are expected to be made in the electricity sector by 2022 to cover a peak load of 110,000 MW.
• The major trends driving this market increase in distribution efficiency, increasing demand for DC dependent infrastructure, the mismatch between renewable source and demand location. Moreover, the DC system can work on variable frequencies, and DC architecture is simpler than AC, requiring less space, equipment, installation, and maintenance.
• To better equip its grid system for peak power demand, the country led a Gulf Cooperation Council project to link grids of the member states. Moreover, Saudi Arabia runs its electricity transmission network at 380 kV, 60 Hz, while the other five countries in GCC use 400 kV, 50 Hz. Based on the asynchronous nature of the interconnected state’s electricity, the best solution was to add an HVDC interconnection.
• The electricity generation in Saudi Arabia was 5.5% higher or 356.6 TWh in 2021 than 2020. The generation had witnessed an increasing trend in recent years owing to increase in demand from residential, commercial and industrial sectors.
• Apart from the HVDC-based cross-border grid interconnection, several projects for grid strengthening and interconnecting regions of Saudi Arabia are planned with 380kV lines. This interconnection helps in increasing the demand for DC distribution systems for the next few years.
• Owing to the above points, Saudi Arabia is expected to dominate the Middle-East and Africa DC Distribution Networks Market during the forecast period.

MEA DC Distribution Networks Market Competitor Analysis

The Middle-East and Africa DC Distribution Networks Market is consolidated. Some of the major players include (not in particular order) Eaton Corporation PLC, Vertiv Group Corp., Siemens AG, ABB Ltd, and Secheron SA.

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