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Worldwide revenue from flexible alternating current transmission systems (FACTS) will surpass $5 billion annually in 2022, according to a new report by Navigant Research.

FACTS, the research firm notes, include an array of technologies, such as series compensation (SC) solutions, static volt-ampere reactive compensators (SVCs) and static synchronous compensators (STATCOMs), that can improve the reliability and stability of the high-voltage (HV) transmission grid.

The majority of electricity transmission systems in service today, the research firm reports, are HV alternating current (AC) systems that rely on many of the same technologies that existed at their conception more than 100 years ago. Navigant adds that rapid worldwide expansion in large-scale wind and solar projects, coupled with the growth of heavy industry in Latin America, South Africa and other regions, is providing new opportunities for FACTS.

According to Navigant, increased electricity demand is only one of many drivers for the growth of FACTS installations. With the capital costs and uncertainty associated with new transmission grid and HV substation construction, transmission grid operators and utilities will always seek to mitigate voltage drops over long-haul transmission lines, driving the requirement for the most inexpensive and rapidly installed SC systems.

In addition, the research firm says that many transmission substations using SC solutions and associated fixed series capacitor devices have been operational for 30 or 40 years. These installations represent every utility's aging infrastructure and are now on 30-to-40-year replacement and upgrade cycles, pushing consistent demand for SC technologies.

Coal and nuclear generation plant retirements also drive demand for large-scale SVC technologies to reinforce voltage stability and reactive power correction on the transmission grid in the retired plant vicinity, Navigant reports. In North America and Europe, a large number of coal plants will be retired by 2017. This activity and pending European and Japanese nuclear plant retirements will encourage large-scale FACTS implementation demand.

The research firms adds that new applications for FACTS technologies are spurred by large-scale onshore and offshore wind and solar farm interconnections with the transmission grid. These interconnections have to be synchronized and stabilized due to their inherent intermittency, particularly in the European, Asia Pacific, African and Latin American markets.

Furthermore, Navigant notes that both the proliferation of distributed renewables on the grid and the smart grid focus on pushing distribution automation and control technologies to the edge of the grid are driving new markets for scaled-down FACTS that can be delivered as modular containerized standard distributed SVC/STATCOM solutions. The research firm expects this area to be a market that could rapidly accelerate as technologies become less expensive and readily deployed at distribution substations and even on pole-mounted transformers.

Overall, the global market for FACTS is growing at a steady pace, Navigant reports. The firm forecasts that global cumulative FACTS installation revenue will amount to $42.3 billion in a base scenario between this year and 2023. Interest in SVCs, STATCOMs and distributed SVCs/STATCOMs has grown as the utility industry is faced with increased grid stability and reliability concerns, and as such, Navigant expects continuing growth in demand for these technologies.

Notably, the research firm projects double-digit compound annual growth rates for FACTS technologies in the Latin America, Asia Pacific and Africa regions, as well as for wind-, solar- and distribution grid-focused installations.

"Flexible AC transmission systems can be used creatively to help solve some of the most demanding transmission challenges on the power grid," comments James McCray, senior research analyst with Navigant. "These new distributed solutions are showing tremendous potential for helping to correct problems like localized voltage sag, power factor fluctuations and flicker."


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