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HVDC systems and power electronics for grid stability

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Bespoke HVDC converter systems are split among three or four OEMs, and surging AI data center demand strains their limited engineering capacity.

High-power electronics that convert, control and stabilize bulk power flows across grids. AI data centers strain regional transmission, increasing need for flow control and asynchronous interconnection. Global HVDC converter market at $8.7bn in 2025; oligopoly of 3-4 OEMs captures value on bespoke systems.

High-power electronics-based systems converting, controlling and stabilising power flow: HVDC converters, FACTS devices, STATCOMs, synchronous condensers and grid-forming inverters.

Why the concentration exists

High Voltage Direct Current systems convert alternating current to direct current for transmission, then back to alternating current at the receiving end. The conversion uses power electronics including thyristors or insulated-gate bipolar transistors, capacitors, circuit breakers and high-voltage cables. This conversion process creates an opportunity to manage the power grid by controlling the magnitude and direction of power flow, which increases stability in the transmission grid.[1][2]

Two dominant converter technologies exist: line-commutated converters using thyristors, and voltage source converters using insulated-gate bipolar transistors. Voltage source converters are a newer technology that allows faster control of power flow, better stability, and more compact converter stations. Experts agree that thyristors used in line-commutated converters are a mature technology with limited room for improvement, and demand for these systems is declining in North America and Europe, though they remain important in regions requiring very high-capacity transmission such as China and India.[3][16]

Modular Multilevel Converter technology represents an advancement in voltage source converter design. Siemens Energy introduced this technology in 2007 and commissioned the first commercial system, the Transbay Cable project in San Francisco, in 2010. The technology enables HVDC transmissions to compensate for fluctuations in power, voltage and frequency, making it suitable for stabilizing power networks during significant disturbances or blackouts.[4][6]

What the evidence shows

Siemens Energy HVDC systems are the most efficient way of energy transmission over long distances using converters with thyristors or IGBT.

siemens-energy.com

Hyosung Heavy Industries provides HVDC transmission systems within its power system solutions portfolio, enhancing grid stability.

hvdcworld.com

Hitachi Energy has been a pioneer in the development of power electronics-based grid solutions including HVDC converters and STATCOMs.

hitachienergy.com
RESCORED JUL 2026oligopolyscaling11 companies

Who supplies it

Siemens Energy has completed nearly 60 HVDC projects in over 25 countries, including 43 HVDC Classic and 42 HVDC PLUS projects. The company has executed over 15 point-to-point HVDC projects using its HVDC PLUS technology. Hitachi Energy launched HVDC Light, an adaptation of HVDC Classic, in 1997 and has been developing power electronics-based grid solutions for decades.[6][9]

Hitachi Energy was selected by Marinus Link Pty Ltd to supply an HVDC system for a 345-kilometer cable route between mainland Australia and Tasmania. Upon completion of both stages, the Marinus Link will have a total capacity of 1,500 megawatts. In August 2022, State Grid Corporation of China revealed a $22 billion investment for executing a new batch of ultra-high voltage power transmission projects across China.[10][19]

Who controls it

Hitachi EnergySiemens EnergyGE Vernova+8 more tracked
$16B market · 20257.2% CAGRsource

What it depends on, and what depends on it

More than 150 HVDC transmission systems and 48 back-to-back converter stations have been built worldwide, including 44 international system interconnections. The installed DC power capacity up to 2021 was about 300 GW. As of September 2023, there were more than 300 GW of installed HVDC capacity worldwide, with 150 GW planned over the next decade.[13][18]

European grid operators have about 50 GW of voltage source converter-based HVDC projects operating and another 130 GW planned over the next 10 years. North America accounts for only 3 percent of all voltage source converter-based HVDC systems in operation worldwide, but approximately 30 percent of planned and proposed systems. China is planning more than $200 billion in investment in transmission lines by the end of 2025.[18][14]

Where it sits in the stack

Takes in: AC or DC power

Sends on: Controlled AC or DC power with managed reactive power, voltage and frequency

view in atlas

What would break it

System integrators for HVDC and converter systems carry risks of cost overruns, integration failure, and delays. Asian competitors with lower costs may undercut margins of established manufacturers. These execution risks affect the reliability of supply for critical grid infrastructure projects.[5]

The United States built its first HVDC system in 2000, but only five more systems have been built in the 25 years since. This limited deployment base means North America has less operational experience with the technology compared to other regions. The Champlain Hudson Power Express, a 339-mile buried HVDC line connecting Quebec to New York City, required developers to choose the more expensive buried line due to expected objections over an overhead line.[15]

The North American Electric Reliability Council found that a shortage of reactive power was a significant factor that contributed to the blackout of August 2003, the largest in North American history affecting over 50 million people across eight U.S. states and two Canadian provinces. A large transmission system requires reactive power reserves for dynamic response to a single failure of a generator or transmission line. Overhead lines consume increasing reactive power with load, creating stability challenges that HVDC systems can help address.[7][11]

What to watch

In early 2025, German transmission system operator TransnetBW signed an order with Hitachi Energy for two enhanced STATCOM facilities at Wendlingen and Oberjettingen, Germany. The project will provide almost 2 gigawatts of grid inertia from 2x250 MVAR grid-forming enhanced STATCOMs plus a 150 megawatt storage system. Construction starts in 2025 with devices operational in 2028.[20]

The U.S. Department of Energy launched the IDEAL HVDC initiative at about $11 million and set a target to cut HVDC transmission system costs by 35 percent by 2035. India's Ministry of Power is developing Green Energy Corridor works including two HVDC terminals of 5,000 MW each, targeted for completion by fiscal year 2029-30. The Government of India's Ladakh renewable evacuation scheme features 5 GW terminal capacity at each end with a 480 km HVDC line.[17]

Hitachi Energy Research designed a wireless sensor network proof of concept for an HVDC station in Germany, with results to be presented at CIGRE 2026 in Paris. EPRI's Program 37 on HVDC and FACTS technologies planned 2025 research includes documenting different possible voltage source converter topologies such as alternate arm converters for fault current limiting. In 2024, EPRI developed a FACTS Application Guide including all FACTS controllers and studied the application of STATCOM with energy storage.[8][12]

Related nodes

Transmission and distribution utilities and system operatorsHV/EHV power transformers, materials and servicesHV switchgear, circuit breakers and protection apparatusOverhead transmission lines, conductors and towersUnderground and submarine cablesSubstations and substation equipment

Sources

  1. siemens-energy.com
  2. en.wikipedia.org · 2026-07-02T22:26:53
  3. physicsworld.com · 2026-06-01T15:05:04
  4. hitachienergy.com
  5. neomarketdata.com · 2025-10-11T10:02:54
  6. siemens-energy.com
  7. en.wikipedia.org
  8. hitachi.com · 2026
  9. hitachihyoron.com · 1997
  10. hitachi.com · May 23, 2024
  11. ansys.com · March 4, 2024
  12. transmission.epri.com · 2025
  13. cigre.org · 2021
  14. power-technology.com · 2025
  15. niskanencenter.org · 2000
  16. powertransmissionworld.com · 7 July 2025
  17. market.us
  18. acore.org · September 19, 2023
  19. power-technology.com · August 2022
  20. tdworld.com · 2025

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