The global market for submarine power cable market is gaining momentum, as national governments and private companies strive to achieve sustainable energy and deeper connectivity. In the face of a growing shift towards renewable energy and a substantial increase in the generation of offshore energy, the growth in demand for submarine power cables is bound to shatter records.
In this blog, I will also offer an analytical overview of the present state of this market, main tendencies, projections of the growth, and main driving forces and provide answers to some frequently asked questions.
Market Overview
Submarine power cables enable electrons to flow over record-breaking distances from one continent to another across vast stretches of the oceans and seas. Electrons flow into such cables at offshore wind farms and emerge on land in the national grid, where they power up homes, offices and factories. Similarly, electrons traverse submarine power cables to bring electricity from sunny continents to cloudy continents for future use. Electrons also flow in and out of submarine power cables, connecting different national grids across the world, which is crucial for coordinated energy supply and demand across countries, thus minimising electricity price fluctuations as a result. Importantly, submarine power cables bring reliable volumes of electricity to some of the world’s remotest islands.
The submarine power cable market size is projected to reach US$ 13.45 billion by 2031 from US$ 8.96 billion in 2023. The market is expected to register a CAGR of 5.2% during 2023–2031. The increasing investment in offshore wind energy plants and the rise in cross-country submarine connections for power transmission are likely to be the key drivers and trends of the market.
Key Drivers of Growth
- Expansion of Renewable Energy: Government bodies support the construction of numerous wind power or phot nationally and internationally Energy Agency (IEA February 2021, ‘offshore wind capacity could reach 235 GW by 2030, a 15-fold increase over the current base. This will require a monumental effort to build over 66,000 kilometres of submarine cables for wind farms.’
- Interconnection Initiatives: There are many interconnectivity projects underway in different countries and regions to improve grid stability and share green energy supplies. The EU (European Union) is aiming to encourage the development of integrated energy markets, following the example of the Sahara-Mediterranean interconnection and Mideast-Africa electricity hubs.
- Technological Developments: Higher capacity and longer distance conversion are now possible thanks to enhanced cable and fibre technology. Additionally, cost reduction is achieved with the increasing use of sophisticated materials and new techniques in installation.
- Government policies and regulations: The submarine Cable industry is benefiting from favourable renewable energy policies and investments in infrastructure. New incentives for offshore wind energy, for example, are a notable occurrence in Europe and North America.
- Rising Electricity Consumption: The growth of population and industries around the world is causing a rapid increase in electricity use, and the energy needs of these additional consumers must be met by new power generation and installation facilities, such as submarine cables.
Regional Insights of the Submarine Power Cable Market
North America
- US
- Canada
- Mexico
Europe
- UK
- Germany
- France
- Russia
- Italy
- Rest of Europe
Asia-Pacific
- China
- India
- Japan
- Australia
- Rest of Asia-Pacific
South and Central America
- Brazil
- Argentina
- Rest of South and Central America
Middle East and Africa
- South Africa
- Saudi Arabia
- UAE
- Rest of the Middle East and Africa
Market Challenges
However, amidst the optimism, this market has its slippery way. Installation of submarine power cables is expensive, installations can have serious environmental impacts, and often have to undergo extremely responsive regulatory regimes. Moreover, the price of the raw materials from which the submarine cables are built affects the market prices, which could vary.
Frequently Asked Questions (FAQs)
- What factors are driving the growth of the submarine power cable market?
The growth of the submarine power cable market is primarily driven by the expansion of renewable energy projects, particularly offshore wind farms, increasing interconnectivity initiatives among countries, advancements in cable technology, supportive government policies, and rising electricity demand.
- Which regions are expected to see the highest growth in the submarine power cable market?
The Asia-Pacific region is projected to experience the highest growth rate, driven by substantial investments in offshore energy projects in countries like China and India. Europe remains the largest market, fueled by ongoing investments in renewable energy and interconnection projects.
- What are the main applications of submarine power cables?
Submarine power cables are primarily used for connecting offshore wind farms to onshore grids, facilitating inter-country power exchanges, and supplying electricity to remote islands and coastal areas.
- How long do submarine power cables typically last?
Submarine power cables can last between 25 to 40 years, depending on the quality of materials used and the conditions they are subjected to. Proper installation and maintenance can further extend their lifespan.
- What are the key challenges facing the submarine power cable market?
Key challenges include high installation costs, complex regulatory environments, environmental concerns, and fluctuations in raw material prices, which can impact overall project feasibility and profitability.
