Flexible AC Transmission System (FACTS) Market to Reach US$ 2,142 Mn by 2032 Fueled by Grid Modernization and Renewable Integration

✅FACTS Market Expands at 5.7% CAGR Amid Rising Demand for Efficient Power Transmission

According to the latest study by Persistence Market Research, the global flexible AC transmission system (FACTS) market was valued at US$ 1,453.1 million in 2025 and is projected to reach US$ 2,142 million by 2032, growing at a CAGR of 5.7%. FACTS technologies are playing a vital role in improving grid stability, optimizing transmission efficiency, and supporting the large-scale integration of renewable energy sources. With growing concerns about transmission losses and the need for a more reliable and flexible power grid, FACTS solutions are becoming increasingly indispensable in the global energy landscape.

The flexible AC transmission system market is gaining prominence as energy infrastructure across the world faces increasing demand for stability, efficiency, and scalability. FACTS devices such as Static VAR Compensators (SVCs) and Static Synchronous Compensators (STATCOMs) help utilities manage power quality, enhance grid reliability, and increase transmission capacity without the need for significant new infrastructure investments. With global electricity demand projected to rise consistently due to industrialization, electrification of transport, and digitalization, FACTS are essential in addressing issues such as voltage fluctuations, reactive power imbalance, and congestion in transmission lines.

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In terms of market dynamics, STATCOM technology represents the leading segment owing to its superior performance in dynamic reactive power compensation and faster response compared to conventional systems. Asia Pacific dominates the global FACTS market, driven by its rapid urbanization, large-scale renewable energy projects, and government initiatives to modernize grid networks. Countries like China and India are investing heavily in strengthening their power infrastructure to meet the growing demand, while also ensuring stability in renewable-rich grids. The region's focus on reducing transmission losses and improving energy efficiency is a primary reason behind its market leadership.

✅Key Market Insights

➤ STATCOM systems dominate the market due to their efficiency in dynamic grid stabilization.
➤ Asia Pacific leads the market with heavy investments in renewable energy and smart grid projects.
➤ Growing integration of wind and solar power is creating strong demand for FACTS technologies.
➤ FACTS reduce transmission losses, lowering operational costs for utilities and grid operators.
➤ Government-backed infrastructure modernization programs worldwide are accelerating adoption.

✅Why is the adoption of Flexible AC Transmission Systems (FACTS) increasing globally?

The adoption of FACTS systems is rising because they enable utilities to handle the challenges of modern power grids, including renewable integration, congestion management, and reactive power balance. With renewable energy sources like wind and solar introducing variability into grids, FACTS provide real-time voltage control and stability. They also allow higher utilization of existing transmission infrastructure, minimizing the need for costly new power lines. Moreover, regulatory pressure to improve grid reliability and reduce transmission losses is pushing utilities to deploy FACTS. This combination of efficiency, flexibility, and cost-effectiveness makes them critical for future-ready power systems.

✅Market Dynamics

Market Drivers:
The primary drivers of the FACTS market include the growing demand for renewable energy integration, rising electricity consumption, and government mandates for improving transmission efficiency. FACTS help in managing the variability of wind and solar power, ensuring grid stability, and maximizing existing infrastructure capacity.

Market Restraining Factor:
High initial investment costs remain a major barrier to adoption, especially in developing economies. The complexity of FACTS installation and integration into existing power systems can also hinder large-scale deployment. Additionally, limited technical expertise in emerging markets may slow adoption.

Key Market Opportunity:
Significant opportunities exist in smart grid modernization and digital FACTS systems. The integration of digital technologies, IoT, and AI into FACTS solutions will open new avenues for real-time grid management and predictive maintenance. Moreover, emerging economies investing in grid expansion present lucrative growth prospects for FACTS providers.

✅Market Segmentation

The flexible AC transmission system market can be segmented by type and application. By type, the market is divided into Static VAR Compensator (SVC), Static Synchronous Compensator (STATCOM), Unified Power Flow Controller (UPFC), and others. Among these, STATCOM dominates due to its enhanced efficiency, rapid response, and ability to handle a wide range of voltage issues in renewable-rich grids. SVC continues to hold a considerable share in established markets due to its proven performance and cost-effectiveness in traditional grid applications. UPFC, while less common, is gaining traction for its ability to control multiple grid parameters simultaneously.

By application, the market is categorized into utilities, industrial, and renewables integration. Utilities hold the largest share, as FACTS are widely used to improve grid stability and transmission capacity. Industrial applications, including steel, chemical, and manufacturing plants, also rely on FACTS to maintain power quality and reduce downtime. Renewables integration is the fastest-growing segment, as the variability of wind and solar generation requires advanced grid stabilization technologies. With the global shift towards cleaner energy, this segment is projected to witness the highest growth over the forecast period.

✅Regional Insights

Asia Pacific dominates the global FACTS market, with China and India leading investments in power infrastructure upgrades and renewable energy integration. Government-backed policies promoting smart grid development are further supporting adoption. North America follows closely, driven by the U.S.'s focus on reducing grid congestion and improving power quality. Europe is also a key market, particularly due to renewable energy commitments under the EU Green Deal. Regions such as Latin America and the Middle East & Africa are witnessing emerging opportunities as investments in renewable power projects and industrial growth demand enhanced grid reliability.

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✅Competitive Landscape

The market features strong competition among global and regional players focusing on innovation, partnerships, and expansion to capture greater market share.

✦ ABB Ltd.
✦ Siemens Energy AG
✦ General Electric Company
✦ Mitsubishi Electric Corporation
✦ Toshiba Energy Systems & Solutions Corporation
✦ Hyosung Corporation
✦ Bharat Heavy Electricals Limited (BHEL)
✦ RXPE Ltd.
✦ NR Electric Co., Ltd.
✦ American Superconductor Corporation (AMSC)

✅Key Industry Developments

Recent years have witnessed a surge in strategic collaborations between utilities and technology providers to enhance FACTS adoption. ABB and Siemens have both launched digital-ready FACTS platforms capable of remote monitoring and predictive maintenance. General Electric is actively deploying STATCOM systems for renewable-rich grids across North America and Europe.

In Asia, Mitsubishi Electric has secured contracts for STATCOM installations in India's renewable sector, while Hyosung has expanded its presence in the Middle East to support growing energy demand. These developments highlight the industry's focus on renewable energy integration and next-generation grid stability solutions.

✅Innovation and Future Trends

Future trends in the FACTS market are centered on the digitalization of grid systems. IoT-enabled FACTS devices with real-time monitoring and AI-based predictive analytics will play a major role in improving operational efficiency. The move towards digital substations will also strengthen the application of FACTS in smart grids.

Another key trend is the shift towards eco-friendly solutions. Companies are developing FACTS technologies with lower energy consumption and reduced environmental impact, aligning with global sustainability goals. As power systems become increasingly complex, hybrid FACTS solutions combining multiple functionalities are expected to emerge, shaping the future of grid management.

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