Global Capacitor Bank Market Set to Hit USD 5.5 Billion by 2034, Says Transparency Market Research

The global capacitor bank market is set for steady growth, driven by the rise in renewable energy generation and aging grid infrastructure. Valued at US$ 3.6 Bn in 2023, the market is projected to expand at a compound annual growth rate (CAGR) of 4.1% from 2024 to 2034, reaching US$ 5.5 Bn by the end of 2034. Capacitor banks play a critical role in power factor correction and voltage regulation, especially in solar and wind energy applications, where correcting power factors can save a significant amount of electricity.

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Analysts' Viewpoint

The increasing adoption of renewable energy sources is fueling the capacitor bank market, as wind and solar power systems rely on capacitor banks to address lagging power factors and optimize electrical energy usage. Additionally, aging grid infrastructures necessitate the integration of new technologies to maintain power system stability. Advanced tuned-filter capacitor banks, which combine reactive energy compensation with inductors to dampen harmonic currents, are emerging as a vital solution for preventing resonance and improving system reliability. These developments are propelling market demand across various regions.

Market Introduction

A capacitor bank consists of several capacitors of the same rating, connected in series or parallel, to store electrical energy and correct power factor lag. Also known as power factor correction banks, these systems enhance electrical efficiency by reducing the phase difference between voltage and current in an AC power supply. Capacitor banks are available in various configurations, such as internally fused, externally fused, and fuseless, each designed to meet specific operational requirements. Recent design innovations-such as self-healing capacitors with extended foil and solderless connections-offer improved performance, simplicity, and repeatability in power conversion processes.

Key Market Drivers

Rise in Renewable Energy Generation

Enhanced Power Factor Correction: As renewable energy sources like solar and wind become more prevalent, capacitor banks are essential for compensating for lagging currents in these systems. For example, in solar energy, they supply reactive power to improve the power factor, thereby boosting plant efficiency.
Increasing Renewable Adoption: Global trends show a significant increase in renewable energy capacity, as evidenced by high installation rates reported by regulatory bodies like FERC. This surge in renewable capacity is directly driving the demand for capacitor banks in power conversion processes.

Aging Grid Infrastructure

Grid Modernization Needs: Aging electrical grids experience issues like voltage drops and power losses. Capacitor banks are used to repair these inefficiencies and restore optimal voltage levels.

Government Investments: Numerous governments are investing in modernizing their power grids. For instance, Svenska kraftnät in Sweden is actively upgrading its transmission network to handle increased renewable integration, thereby fueling market growth.

Regional Outlook

Asia Pacific

Asia Pacific held the largest market share in 2023, largely due to the rapid adoption of solar energy across the region. Countries like India and China are experiencing significant growth in renewable energy installations, which in turn drives demand for capacitor banks for power factor correction and grid stabilization. Additionally, the region's robust investments in grid modernization further bolster market dynamics.

Analysis of Key Players

Leading players in the capacitor bank market are focusing on developing tuned-filter capacitor banks that offer both reactive energy compensation and harmonic damping.

Key companies include:

Eaton
COMAR Condensatori S.p.A.
ABB
Enerlux Power s.r.l.
Hitachi, Ltd.
Circutor
Vishay Intertechnology, Inc.
TDK Electronics AG
Schneider Electric
GE Vernova
Nissin Electric Co., Ltd.

These companies are enhancing their product portfolios by integrating advanced materials and smart technologies to improve energy density, reduce costs, and ensure reliable operation in both new and aging grid systems.

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Key Developments

February 2024: Powerside, a Canadian electrical equipment supplier, launched Pole-MVar, a tuned-filter capacitor bank designed for pole-mounted installations to address harmonic distortion and resonance issues.

2023: Kyocera AVX introduced a range of high-capacity supercapacitor banks featuring low leakage and lead-free compatibility, compliant with RoHS and UL 810A standards for electrochemical capacitors.

Market Segmentation

By Voltage:

Low (69 kV)

By Type:

Internally Fused
Externally Fused
Fuseless

By Installation:

Open Air Substation
Metal Enclosed Substation
Pole Mounted
Others

By Application:

Power Factor Correction
Harmonic Filter
Voltage Regulation
Renewable Integration
Industrial Application
Data Center
Others

By Region:

North America
Europe
Asia Pacific
Latin America
Middle East & Africa

By Country (Select):

North America: U.S., Canada
Europe: Germany, U.K., France, Italy, Russia & CIS
Asia Pacific: Japan, China, India, ASEAN
Others: Brazil, Mexico, South Africa, GCC

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