Global electricity transmission infrastructure relies on a mix of high-voltage alternating current (HVAC) and high-voltage direct current (HVDC) technologies to support an increasingly interconnected transmission grid. Today, large capital investments in HVDC-based projects are being planned for new and often very large capacity transmission networks. If every HVDC system that has been announced for commissioning between now and 2020 is actually built, cumulative global investment in HVDC systems would be a little over $217 billion. A new report from Pike Research, however, concludes that officially announced budgets and schedules for HVDC systems overstate the likely outcomes by nearly a factor of two.

A more plausible scenario, according to the cleantech market intelligence firm, is that the cumulative spending for HVDC systems between 2012 and 2020 will be between $110 billion and $120 billion.

“The planned systems require massive amounts of capital, are subject to the whims of regulatory and national energy policies, and will certainly change depending on the course of energy prices, energy demand growth, and global economics – all of which are interrelated,” says vice president Bob Gohn. “Combined with the uncertainties of the global economy, these factors indicate that there is likely to be a significant gap between the planned level of investment in HVDC systems and the build-outs that will actually happen.”

Virtually all construction of new HVDC systems is occurring in Europe, India, China and North America. Growth in each of these regions is being driven by different forces: while rapid economic growth and the drive to complete national electrification programs are fueling HVDC systems in China and India, Europe will see large amounts of renewable generation, along with the interconnection of many national grids into a unified continent-wide system. In North America, meanwhile, three-quarters of planned future investment in HVDC comes from “merchant” transmission companies, due to the balkanized regulatory framework of the region.