In an era where electrical systems are becoming more complex and crucial, surge arresters are playing a vital role in protecting sensitive equipment and infrastructure from damaging surges. As our dependence on electrical systems grows, so does the importance of these critical components.
Surge arresters come in various types tailored for different applications, from industrial machinery to residential use. The surge arrestor market size was USD 1,689.7 million in 2023 and is anticipated to reach USD 2,560.5 million in 2033, growing at a rate of 4.3% from 2024 to 2033.
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Market Segmentation
- By Voltage: Low, Medium, and High
- By Class: Distribution, Intermediate, and Station
- By Material: Polymer and Porcelain
- By Application: AIS and GIS
- By End-user: Residential, Commercial, Industrial, and Utility
- By Region:
- North America: Includes United States and Canada
- Europe: Includes United Kingdom, Germany, France, Spain, Italy, Netherlands, Sweden, Switzerland, Denmark, Finland, Russia, and the rest of Europe
- Asia-Pacific: Includes China, India, Japan, South Korea, Australia, Singapore, Indonesia, Taiwan, Malaysia, and the rest of Asia-Pacific
- Latin America: Includes Brazil, Mexico, Argentina, and the rest of Latin America
- Middle East and Africa: Includes Saudi Arabia, UAE, Egypt, Iran, Qatar, South Africa, and the rest of MEA
Market Trends and Drivers
Increasing Need for Dependable and Uninterrupted Power Supply
The surge arrestor market is currently experiencing a notable trend driven by the increasing need for dependable and uninterrupted power supply, particularly in regions grappling with electricity infrastructure challenges like Nigeria and India.
In April 2024, the Minister of Power, Adebayo Adelabu, emphasized the urgent requirement of $10 billion annually for the next decade to rejuvenate Nigeria’s struggling electricity generation, distribution, and supply chain. This substantial investment indicates a concerted effort to address the existing deficiencies in the power infrastructure, thereby creating a significant demand for surge arrestors to safeguard equipment from voltage spikes and ensure reliable power delivery. Similarly, in April 2024, India, another major market for surge arrestors, witnessed a surge in power demand. The Ministry of Power projected a peak power demand of 260 GW for the summer season, surpassing previous records. This heightened demand underscores the necessity for robust power protection measures, including surge arrestors, to mitigate the risks associated with voltage fluctuations and grid instability during periods of peak demand.
Furthermore, the transformation of India’s power sector over the past few years, as highlighted by the Union Minister for Power and New & Renewable Energy in 2023, has resulted in a substantial increase in power generation capacity, ensuring adequate availability of electricity. However, with increased power generation comes the need for enhanced protection against electrical disturbances, driving the adoption of surge arrestors to maintain the integrity of the expanding power infrastructure.
Growing Adoption of Smart Grids
The surge arrestor market is experiencing significant growth propelled by the widespread adoption of smart grids, fueled by substantial investments and technological advancements in digital infrastructure across the globe.
In various major economies, substantial funds are being allocated to modernize and digitize electricity grids. For instance, the European Commission’s EU action plan “Digitalisation of the energy system” outlines investments of approximately EUR 584 billion by 2030, with a significant portion dedicated to grid digitalization. Similarly, China has earmarked USD 442 billion for modernizing its power grids from 2021 to 2025, reflecting a concerted effort to enhance grid efficiency and reliability. Moreover, Japan’s funding program of USD 155 billion and India’s INR 3.03 trillion scheme demonstrate a commitment to upgrading power distribution infrastructure to meet growing demand and improve system resilience. The deployment of variable renewables and electrification in various sectors is placing increasing strain on power systems. Smart grid technologies play a crucial role in addressing these challenges by enabling real-time monitoring and optimization of grid operations. This capability allows for the efficient utilization of existing resources, ensuring grid stability and reliability even amidst fluctuating demand and supply dynamics. As a result, investments in grid-related digital infrastructure are growing, with around 7% increase observed in 2022 compared to the previous year.
Market Restraints and Challenges
Substitute Technologies for Surge Arrestors
The surge arrestor market faces several restraints, particularly in the form of substitute technologies that offer comparable or alternative surge protection solutions, thereby challenging the market’s growth and profitability.
The presence of substitute technologies offering surge protection capabilities. While surge arrestors have long been the go-to solution for safeguarding electrical systems against voltage spikes, alternative technologies such as voltage regulators, lightning rods, or integrated circuit-based surge protection devices are gaining traction. These substitutes often offer similar surge protection capabilities and may even provide additional functionalities or advantages, such as faster response times or integration with smart grid systems.
The emergence of substitute technologies poses a competitive threat to traditional surge arrestors, leading to market fragmentation and pricing pressures. As consumers and businesses explore alternative surge protection options, manufacturers and suppliers of surge arrestors may face challenges in maintaining market share and sustaining profit margins. Moreover, the availability of substitute technologies may lead to commoditization within the surge protection market, with a focus on price rather than product differentiation or innovation.
Navigating the Grid: Challenges of Long Lead Times and Project Delays
In December 2023, the surge arrestor market faced persistent challenges stemming from long lead times and project delays, as evidenced by data indicating a decline in the share of delayed central infrastructure projects for the second consecutive month. According to a November 2023 report by the Ministry of Statistics and Programme Implementation (MOSPI), which encompasses projects valued at Rs 150 crore or above, approximately 46.1% of projects faced delays. While this marked a slight improvement from previous months, the prevalence of project delays remained a significant concern for the industry.
The MOSPI report revealed that out of a total of 845 delayed projects, the average delay stood at 36.6 months as of November. This prolonged delay significantly impacts the surge arrestor market, as projects requiring the installation of surge protection equipment experience setbacks in implementation and completion timelines. Moreover, the distribution of delays across different time frames further underscores the magnitude of the challenge, with 38% of projects delayed for 25-60 months, 24% for 1-12 months, 23% for 13-24 months, and 14% for more than 60 months.
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COVID-19 Impact
Pre-COVID-19 Pandemic Scenario
The surge arrestor market experienced significant developments and increased awareness of surge protection devices in the pre-COVID-19 era, driven by advancements in technology and growing concerns over electrical system vulnerabilities. In 2018, Insulect Australia Pty Ltd introduced Polymer Surge Arresters, expanding their Switchgear product range to include Medium Voltage options. These surge arresters aimed to provide optimal protection for transformers and other medium voltage equipment against overvoltage transients caused by lightning and switch surge events. By 2019, the integration of electrical systems across workplaces and industries highlighted the importance of surge protection. Excess voltage posed a significant risk to electrical appliances, necessitating the installation of surge arresters to mitigate potential damage. Companies like Schneider Electric offered a range of surge protection devices, including electrical surge arresters and plug-ins, designed to ensure safety and improve the lifespan of electrical devices. Surge arresters played a crucial role in protecting electrical installations and delicate devices from induced or conducted surges.
COVID-19 Pandemic Scenario
The COVID-19 pandemic had a profound impact on the surge arrester market, causing disruptions in development and hindrances to growth. Industry leaders anticipated slowdowns in delivery and construction activities as a result of closures aimed at minimizing the spread of the coronavirus. Manufacturing challenges in key regions like China and the U.S. due to the pandemic posed significant threats to the market in the immediate future. Furthermore, the pandemic led to a depreciation of several countries’ local currencies, resulting in financial losses for metal manufacturers. This, coupled with increased component costs due to the use of US dollars for acquiring significant components, led to a rise in overall manufacturing costs. Consequently, the surge arrester market faced hurdles in its growth trajectory. Moreover, the pandemic-induced delays affected electrification projects globally, pushing back their completion dates and hampering surge arrester production. For instance, according to data from the U.S. Energy Information Administration (EIA), COVID-19 mitigation efforts resulted in more delays than average in the commercial operation dates of proposed electric generator projects in 2020.
Post-COVID-19 Pandemic Scenario
The post-COVID-19 pandemic period is expected to bring significant opportunities for the surge arrestor market, fueled by substantial new funding initiatives aimed at modernizing and digitalizing electricity grids across several major economies. In Europe, the European Commission’s action plan “Digitalisation of the energy system,” introduced at the end of 2022, outlines a comprehensive investment strategy totaling EUR 584 billion by 2030. A significant portion of this investment, approximately EUR 170 billion, will be allocated for digitalization initiatives such as smart meters and automated grid management, presenting a lucrative opportunity for surge arrestor manufacturers to integrate their products into modernized grid systems. Similarly, countries like China, Japan, India, the United States, and Canada have also announced ambitious funding programs to promote investments in smart power grids. China’s plan to invest USD 442 billion by 2025, Japan’s funding program of USD 155 billion, India’s INR 3.03 trillion scheme, the United States’ Grid Resilience Innovative Partnership (GRIP) Program with USD 10.5 billion in funding, and Canada’s USD 100 million investment through its Smart Grid Program collectively signal a surge in demand for technologies like surge arrestors to support grid expansion and enhancement efforts.
Major Players in the Surge Arrester Market
The surge arrester market is characterized by a high degree of consolidation, with a limited number of key players dominating the market. Major contributors include TE Connectivity, ABB Ltd., CG Power & Industrial Solutions Ltd., CHINT Group, DEHN SE, Eaton, Ensto, Elpro, General Electric Company, Hubbell, INAEL, S.A., Izoelektro, Raycap Corporation SA, Siemens Energy, Surgetek, Schneider Electric SE, Leviton Manufacturing Company, Inc.,, TDK Electronics AG, Mitsubishi Electric Corporation (Mitsubishi Electric), and Maclean Power Systems among others.
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