Submarine Power Cables Market - Growth, Trends, and Forecast (2020 - 2025)

The submarine power cables market is expected to witness a significant growth in the coming years owing to the increasing demand from offshore wind power sector and growing demand for inter-country and island power connections are attributed to drive the demand for submarine power cables globally. However, high frequency of maintenance and repair work needed to submarine cables are expected to act as a restraint for the submarine power cables market.

• High-Voltage Direct Current (HVDC) cables is expected to account for the largest market share in submarine power cables market as HVDC cables are used for power transmission over longer distances and for system interconnection. For transmission purpose, AC is converted to DC through cables, and back to AC at the other end.
• The increasing demand for HVDC cables for offshore oil rigs, renewable energy generation is expected to act as opportunity for submarine power cables market over the forecast period.
• Asia-Pacific region dominated the market across the globe with the majority of the demand coming from countries such as the China and South Asian Countries.

Key Market Trends

Increasing Demand form Offshore Wind Power Sector

• The total cumulative offshore installations have reached 23.36 GW, in 2018, representing a 23.74% increase in cumulative offshore wind installed capacity over the previous year.
• Globally, the share of offshore installations continued to increase and reached 8% for new installations and 4% of the total installations in 2018. By 2025, the share is expected to exceed 10% and the total installed based is expected to reach 100 GW.
• The offshore wind power generation is dominated by the United Kingdom, Germany, and China. The United Kingdom represented approximately 34.4% of the total offshore installed capacity, in 2018.
• In 2018, Europe’s new offshore wind farm investments totaled EUR 10.3 billion, representing almost 24% of the total new power investments and a 37% increase from the 2017 levels. The United Kingdom financed USD 5.9 billion of wind investments in total, representing 22% of total financing activity for the construction of new onshore and offshore wind farms.
• The aforementioned scenario has been driving the demand for the submarine power cables to feed electricity to the grid from offshore wind farms.

Asia-Pacific to Dominate the Market

• In 2018. Asia-Pacific region dominated the submarine power cables market with the largest market share, with China leading the market followed by ASEAN countries.
• The Chinese government is actively promoting the development of renewable infrastructure, in order to curb pollution, as well as to reduce the share of thermal power in the country’s power generation profile. This is likely to drive the development of wind power projects in the country during the forecast period. ​ In the offshore wind market, China installed 1.8 GW in 2018, taking the lead for the first time, followed by the United Kingdom.​
• The Indian offshore wind power market is still in its early stages and has a potential of around 60 GW. The potential areas of the country’s offshore wind power are located at the coasts of Gujarat and Tamil Nadu. The Ministry of New and Renewable Energy is focusing on offshore wind power development. In early 2019, MNRE announced a draft offshore wind energy policy.
• Japan and ASEAN countries being a group of island nations, has huge installations between the islands for power transmission. Japan, being an island nation, has many suitable locations for offshore wind power generation. The country analyzed that offshore wind turbines can generate five times more electricity than onshore wind turbines. Also, there are land constraints for the development of onshore wind farms in the future.
• Philippines comprises of over 7,500 islands of which 2,000 islands are inhabited. The majority of the ASEAN countries comprises of a cluster of small islands, where the power generation is not possible on each island. This creates a need for the power transmission between the islands and in turn leads the increase in demand for submarine power cables.
• The above scenario in the Asia-Pacific region, is expected to drive the demand for submarine cables over the forecast period.

Competitive Landscape

The submarine power cables market is partially consolidated, due to the small number of companies operating in the industry. The key players in this market include Prysmian Group, NKT A/S, Nexans SA, Sumitomo Electric Industries Limited and ABB Ltd. amongst others.

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