Navigating the Transition to Sustainable MV Switchgear Amidst Decarbonization Initiatives
The push for decarbonization in Europe is reshaping the power sector. Stringent environmental regulations and ambitious renewable energy targets have necessitated the expansion and upgradation of the electricity distribution network. This is to accommodate the increased adoption of distributed energy resources (DERs) and electrification across sectors. These factors are expected to significantly drive the demand for medium-voltage (MV) switchgear in the region. However, the transition to sulfur hexafluoride (SF6)-free gas-insulated switchgear (GIS) is imminent due to the European Union (EU) F-gas regulation 2024. This shift is not just a regulatory requirement but a crucial step toward a more sustainable future.
EU Decarbonization Targets
The EU is leading the global climate action with aggressive decarbonization goals set for member states. The region plans to become the world’s first carbon-neutral continent by 2050. In order to speed up the process of decarbonization, the EU has raised the target for reduction in greenhouse gas emissions and is now planning to achieve a minimum of 55% net reduction in greenhouse gas emissions compared to 1990 levels.
In September 2023, the European Parliament set a new target of 42.5% by 2030 for the share of renewable energy in the energy mix. Initially, the target set for the share of renewable energy sources in the energy mix backed by the European Commission (EC) under the REPowerEU plan was 32%. Additionally, the latest legislation has placed the approval process for new renewable energy plants on a fast track.
F-gas Ban as Part of Decarbonization
Across Europe, gas-insulated electrical switchgear is crucial in ensuring a reliable and efficient grid operation. However, this technology employs SF6, which is one of the fluorinated gases (F-gases) and is a very potent greenhouse gas detrimental to the environment (Figure 1). The EU has been leading the fight against fluorinated gases and has banned their use in multiple applications since 2007.
In March 2024, the revised F-gas Regulation (EU) 2024/573 took effect. It seeks a steeper phase-out of F-gases from remaining applications after years of feedback and discussions with stakeholders across industries. The regulation has placed restrictions on the use of SF6 in electrical switchgear, including MV primary and secondary switchgear, and high-voltage (HV) switchgear. The deadline for MV primary and secondary switchgear in less than 24-kV category is Jan. 1, 2026, whereas, for MV primary and secondary switchgear between 24 kV and 52 kV is Jan. 1, 2030. The deadline for HV switchgear between 52 kV and 145 kV is Jan. 1, 2028, whereas, for HV switchgear greater than 145 kV, the deadline is Jan. 1, 2032.
MV Switchgear Market Outlook
As per the estimates of PTR, the demand for MV switchgear in Europe is expected to observe significant growth from 2023 to 2028. The air-insulated switchgear (AIS) market is expected to achieve a compound annual growth rate (CAGR) of 4.75% in terms of revenue over this period, suggesting a consistent upward trajectory. On the other hand, the GIS market is expected to grow at a faster pace with a projected CAGR of 7% in terms of revenue compared to the AIS market. By 2028, GIS is expected to dominate the MV switchgear market and account for an estimated 60% share of the total yearly demand in terms of units (Figure 2).
It is noteworthy that GIS is mostly deployed in renewable generation and electricity distribution networks, so any amendments in the regulatory framework concerning GIS insulation are expected to impact the entire MV switchgear market drastically. Considering the spike in the MV switchgear demand in Europe and adjustments in the regulatory framework, the attention in the region has shifted toward SF6-free switchgear solutions.
SF6-free Switchgear Outlook
According to the estimates of PTR, the demand for SF6-free MV switchgear is expected to grow significantly. This is especially true for MV switchgear, which employs natural-origin gas (NOG) for insulation. As far as SF6-free switchgear within the 1 kV to 24 kV category is concerned, it is facing an early deadline in 2026 and is expected to observe rapid growth in demand. SF6-free MV switchgear in the 1 kV to 24 kV category, as per initial estimates, is anticipated to grow with a CAGR surpassing 30% in terms of revenue from 2023 onward until 2028 (Figure 3). On the contrary, the market for SF6-free MV switchgear in the 24 kV to 42 kV category, which has a relatively distant deadline, is expected to grow at a slower pace.
Major original equipment manufacturers, including ABB, Schneider Electric, Siemens, and Eaton, have taken proactive measures to introduce SF6-free switchgear solutions over the years and have deployed either NOGs or solid epoxy as insulation. Consumers see these environmentally friendly switchgear solutions positively, but concerns regarding the high upfront cost and longer lead times associated with these products need to be addressed. Upon interaction with PTR, a few consumers reported compatibility issues when replacing equipment due to the larger housing of NOG-based GIS.
Moreover, there exists a considerable demand for retro-filling services in the MV switchgear market, where SF6 gas is removed from the operational equipment and is replaced with environment-friendly and technically suitable alternatives. This trend indicates a shift in the MV switchgear industry toward technology that is not only sustainable but also ensures operational efficiency and compatibility.
MV Switchgear Growth Drivers
According to PTR estimates, MV switchgear demand in the continent is driven mainly by the increased adoption of renewable energy generation and a spike in electricity demand in Europe, especially in the EU member states.
Increasing Renewable Energy Adoption. As per the forecast of PTR, a drastic increase in the renewable generation capacity is expected, which will drive the demand for MV switchgear in Europe from 2023 to 2030. It is projected that three major technologies, including utility-scale solar, onshore wind, and offshore wind, have the highest potential for growth over these years.
Utility-scale solar is expected to observe remarkable growth, accounting for a CAGR of 19.07% from 2023 onward till 2030. PTR expects the utility-scale solar capacity to increase from 115 GW in 2023 to 405 GW by 2030, underscoring the increasing role of large-scale solar installations across the continent.
Furthermore, onshore and offshore wind generation capacity is also anticipated to increase drastically over the same period. Onshore wind generation capacity is expected to grow from 232 GW to 380 GW, whereas, offshore wind generation capacity is predicted to grow from 35 GW to 130 GW. Accumulative onshore and offshore wind generation capacity is expected to increase drastically to 510 GW by 2030, indicating the presence of an enabling policy framework for the wind sector in the region. Regardless, Europe is expected to fall short of the target set under REPowerEU for the deployment of wind generation capacity by 10%, mainly due to limited supply, a shortage of trained personnel, and rising prices.
Rising Electricity Demand. Rising electricity demand in Europe is also expected to drive the demand for MV switchgear. According to PTR estimates, the electricity demand in the region is anticipated to increase annually by nearly 2.5% (Figure 4). This growth is mainly triggered by the electrification of sectors, such as transportation and heating/cooling, which are gradually replacing fossil fuels with electric-powered alternatives. Furthermore, the electrification of industries will also contribute positively to the increase in electricity demand in the region.
Looking Ahead
In conclusion, Europe’s transition toward sustainable MV switchgear stands at the intersection of ambitious decarbonization goals and evolving market dynamics. As the continent navigates through regulatory frameworks, technological innovations, and consumer preferences, stakeholders across the industry are tasked with balancing environmental stewardship, operational efficiency, and market competitiveness.
The shift toward SF6-free solutions represents a pivotal step toward achieving climate neutrality while ensuring the reliability and resilience of the electricity distribution network. With collaborative efforts among policymakers, manufacturers, and end-users, Europe is poised to forge a greener, more sustainable future for its energy infrastructure.
—Muhammad Usman is an Analyst-II with PTR Inc., specializing in MV and HV switchgear market analysis. He is passionate about an SF6-free future and digitalization in the energy sector, and works closely with clients to provide effective solutions.