Flexible AC Transmission Systems Market: Rising to US$ 2,142 Million by 2032 Driven by Global Grid Modernization

As electricity demand accelerates across rapidly industrializing regions and renewable energy integration intensifies worldwide, power transmission systems are undergoing a major transformation. At the center of this evolution lies the Flexible AC Transmission Systems (FACTS) Market, a technology suite critical for improving grid stability, enhancing power flow, and increasing energy efficiency. According to a recent study by Persistence Market Research, the global FACTS market-valued at US$ 1,383.90 million in 2024-is projected to reach US$ 2,142.0 million by 2032, growing at a CAGR of 5.7% from 2025 to 2032.

FACTS technologies have become indispensable for utilities, industries, and renewable developers striving for improved grid reliability and seamless power transmission across long distances. With aging power infrastructures, transmission congestion, and surging electricity loads, grid operators worldwide are turning to FACTS solutions to enhance capacity without constructing new transmission corridors. This makes FACTS not only cost-effective but also crucial for modern power ecosystems.

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Understanding the Growing Importance of FACTS

As global power consumption continues to rise, electrical grids are under more pressure than ever. Renewable energy sources-especially wind and solar-have added new layers of variability and intermittency, demanding faster and smarter grid-balancing solutions. FACTS devices help address these challenges by regulating voltage, improving stability, controlling power flow, and minimizing transmission losses.

With utilities prioritizing operational efficiency and energy security, FACTS systems are emerging as essential technologies that support flexible, resilient, and future-ready power networks. They help grid operators:

Increase transmission capacity without upgrading lines

Stabilize voltage fluctuations

Improve power factor and reduce losses

Avoid grid failures and blackouts

Manage renewable intermittency

Optimize existing infrastructure investments

Government policies promoting renewable integration and energy efficiency are further accelerating the adoption of FACTS worldwide.

Market Growth Drivers

Several powerful drivers are propelling the FACTS market toward its forecasted growth trajectory:

1. Expanding Renewable Energy Installations

Wind and solar farms are often located in remote areas, requiring high-capacity power transmission to urban and industrial zones. FACTS devices, such as STATCOMs and SVCs, improve voltage stability and help in managing renewable intermittency. As nations push for clean energy targets, demand for FACTS solutions continues to rise.

2. Rising Electricity Demand and Grid Congestion

Urbanization, industrialization, electric vehicle adoption, and digital infrastructure development are placing unprecedented strain on transmission networks. FACTS technologies provide an efficient solution to mitigate congestion, improve line loading, and manage peak power flows without costly new construction.

3. Modernization of Aging Transmission Infrastructure

Many countries, especially in North America and Europe, rely on decades-old power networks. Upgrading them fully is expensive and time-consuming. FACTS offers a strategic alternative by enhancing existing line capacity and operational efficiency, making modernization more feasible.

4. Need for Power Quality and Stability

Grid disturbances and outages can cause significant economic losses, especially in industries like manufacturing, IT, healthcare, and transportation. FACTS systems enhance dynamic stability, mitigate harmonics, and ensure consistent power quality.

5. Increased Emphasis on Energy Efficiency

Governments and utilities worldwide are mandating energy conservation policies. FACTS systems reduce losses and improve the overall efficiency of power transmission, aligning with sustainability goals.

Flexible AC Transmission Systems Market Segmentation

Compensation Type:

Shunt
Series
Combined

Generation Type:

Second
First

Application:

Voltage Control

End-Use:

Power Control
Utilities
Renewables
Industrial
Railways

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Detailed Segmentation Insights

By Compensation Type

The shunt compensation segment holds a significant share, driven by rising deployment of STATCOM and SVC systems used for voltage stabilization and reactive power control. Shunt solutions are particularly important for renewable energy integration and industrial applications.

Series compensation is also witnessing strong growth as it enhances power transfer capability over long-distance transmission lines. Combined compensation solutions, though relatively less common, are gaining traction in complex grids requiring multi-dimensional control.

By Generation Type

The second generation FACTS, including advanced STATCOM technologies, is dominating the market due to their faster response times, improved efficiency, and lower maintenance requirements. First-generation devices remain in use in older grids but are gradually being replaced with modern alternatives.

By Application

Voltage control is the primary application area, as real-time voltage regulation becomes increasingly critical in dynamic power networks. FACTS devices help maintain voltage within desired limits even under fluctuating loads and renewable variability.

By End-Use

Utilities are the largest users, deploying FACTS across national and regional grids.

Renewable energy developers adopt FACTS for grid compliance and stability.

Industrial sectors utilize FACTS to maintain power quality in sensitive operations.

Railways, especially electrified networks, rely on FACTS to regulate voltage and ensure uninterrupted transportation services.

Regional Market Landscape

North America

North America is experiencing strong demand due to aging infrastructure, large-scale renewable integration, and grid modernization initiatives. The United States leads the region with significant investments in advanced FACTS systems to support renewable expansion and reduce grid congestion.

Europe

Europe's focus on carbon neutrality and high renewable penetration rates are driving FACTS adoption. Countries like Germany, the UK, and the Nordic nations are deploying FACTS to manage the challenges emerging from large wind and solar installations.

Asia-Pacific

The region is emerging as the fastest-growing market. Massive industrial growth, urbanization, and new transmission projects in India and China are boosting demand. Southeast Asian nations are also investing heavily in transmission upgrades.

Middle East & Africa

Energy diversification, infrastructure development, and grid expansion projects are contributing to regional growth. GCC countries are integrating FACTS for stable long-distance HV transmission.

Latin America

Wind and solar capacity additions, especially in Brazil, Chile, and Mexico, are encouraging utilities to adopt FACTS for improved grid performance.

Company Insights

Leading companies operating in the Flexible AC Transmission Systems Market include:

✦ ABB Ltd.
✦ Siemens Energy
✦ General Electric (GE)
✦ Mitsubishi Electric Corporation
✦ Toshiba Corporation
✦ Bharat Heavy Electricals Limited (BHEL)
✦ NR Electric Co.
✦ Hyosung Heavy Industries
✦ American Superconductor Corporation (AMSC)
✦ Rongxin Power Electronic Co. (RXPE)

These players are actively investing in R&D, product innovation, and strategic partnerships to expand their influence across global markets. The competition is intensifying as companies aim to provide smarter, more efficient, and more resilient transmission solutions.

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Future Outlook

The future of the FACTS market looks exceptionally promising. With global power demand rising, and renewable energy becoming a backbone of energy systems, FACTS technologies will continue to play a vital role in ensuring reliable and stable grid operations. Advancements in power electronics, AI-based grid management, and digital monitoring systems will further enhance the capabilities of FACTS devices.

Moreover, upcoming smart grid initiatives and increasing emphasis on energy sustainability are expected to create substantial growth opportunities in the coming years. The shift towards flexible, intelligent, and robust transmission networks will ensure that the FACTS market remains a key contributor to global power infrastructure transformation.

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