Spurred by the growing need for reliable and affordable power, North American utilities strive for efficiency by the improvement of transmission and distribution network, substation upgrades and loss reduction. These measures provide a major boost to the North American high-voltage and medium-voltage capacitor markets, as these capacitors not only help improve efficiency of power distribution, but also correct disturbances in the system and reduce energy losses.

New analysis from Frost & Sullivan, North American High-voltage (HV) and Medium-voltage (MV) Capacitor Markets, reveals that this market earned revenues of $108.1 million in 2006 and estimates this to reach $164.8 million in 2013.

“The North American high- and medium-voltage markets are, to a large extent, driven by the utilities,” said Frost & Sullivan Research Associate Krathika Belliappa. “Operators and owners of bulk power systems invest more in capacitors as they work to enforce the reliability and security standards set by regulatory bodies such as the North American Electric Reliability Corporation (NERC).”

The price increase of raw materials adversely impacts the highly price-sensitive capacitors market. The price of raw materials such as steel, aluminum, copper, polypropylene film and dielectric fluid rises sharply. These increases escalate capacitor prices and heighten competition.

“Additionally, the North American capacitors market faces a talent crunch, which could be one of the reasons for the lack of technical breakthroughs,” notes Belliappa. “With competition levels excepted to intensify over the forecast period, there could be further pressure on profit margins in the absence of innovations.”

Given these challenges, market participants must explore innovations in the field of capacitors. Sufficient investment in R&D is vital to deal with the increase in raw material prices and help develop value-added features. Participants must also evaluate their respective position in the market and aim at differentiation. This will help them tap unexplored markets and carve a niche for themselves.