Every year, power quality personnel resolve to keep surges, sags, and transients from disrupting facility power supplies. This resolution has become even more important as companies invest in the latest electronic equipment to provide choosy customers with high-quality products and services. Ensuring quality power, however, means engineers must rely on transient protection and power conditioning technologies and lead-acid batteries for help. How will these markets perform in the face of increasing power quality requirements? Read on to find out.
Protection and Conditioning
With more than 60% of transient voltages and surges originating within facilities, the need for surge suppression and power conditioning is greater than ever. Failure to protect equipment and facilities from power-line disturbances can result in production and revenue losses. Industry participants estimate that United States' companies incur approximately $26 billion in annual productivity losses and equipment repairs and/or replacements.
From 2001 to 2007, the anticipated compound annual revenue growth rate for the United States' transient protection industry is 5.7% (see Fig. 1). This figure is primarily comprised of the steadily growing line-cord transient voltage surge suppressor (TVSS) segment. In 2000, this segment constituted 32% of the transient protection market revenues, followed by the fast-growing hard-wired segment at 30%.
In Fig. 1, you'll also notice the dramatic decline in the market growth rate between the years 2000 and 2001 — 7.3% to 2%. This sharp dip mirrors the overall decline in the U.S. economy, cutbacks in consumer spending, and the drop in the telecommunication and information technology markets, which ultimately affect TVSS demand.
The power conditioning market, which includes small- (up to 3kVA) and medium-scale (3.1kVA to 100kVA) power conditioners, sold $474.7 million worth of equipment in 2000 — an increase of 4.4% over 1999. Like the transient protection market, the power conditioning market experienced a lower growth rate in 2001 (1.5%) because of the softening U.S. economy (see Fig. 2).
The markets for transient protection and power conditioning are expected to resume healthy growth rates as the economy strengthens over the years. They also will continue to benefit from the restructuring of the power industry and the increasing need for zero downtime.
The unbundling of utility operating units has diminished customer confidence in the industry's ability to deliver reliable power. At the same time, customer downtime costs are rising and power quality is becoming a critical concern. Customers want assurance that they'll receive high-quality power.
The drive for continuous operation, or zero downtime, is impacting the design of power quality equipment and systems. The United States' hard-wired TVSS and power conditioning industries have tried to meet this requirement by building redundancy into its products and eliminating single point of failures. TVSS systems, for example, maintain their surge protection capabilities even if one module fails, and end users can easily replace a failed component without turning off an entire AC power system.
Currently, the TVSS and power conditioning markets are experiencing a decreasing price trend because of intense competition. However, vendors can prevent prices from dropping further by continually enhancing their products.
Stationary lead-acid (SLA) batteries provide electrical power to systems during power outages. They stabilize voltages by eliminating system irregularities, and they sustain large loads while utilities switch from one generation system to another.
The two main types of SLA batteries are flooded (wet) cells and valve-regulated lead-acid (VRLA) cells. The market divides them into two categories: greater than 25Ah and less than 25Ah. Those batteries with less than 25Ah are inexpensive and designed to power emergency lighting, fire alarms, small uninterruptible power supply (UPS) systems, and security systems. Batteries with more than 25Ah tend to be more expensive and complex in design.
In 2000, stationary lead-acid batteries experienced phenomenal revenue growth — approximately 22.1% (see Fig. 3, on page 18). Market trends, however, show a dramatic drop in growth (-23%) the following year. The primary contributing factors behind this startling decline include the following:
- A drop in economic activity adversely affected the manufacturing and service sectors
- Excessive expansion of the telecom infrastructure in the last 3 years bankrupted some service providers
- Sluggish economic conditions discouraged major investments in infrastructure development, especially for 3G wireless
- Failed dot-com companies reduced the market size dramatically
Fortunately, the outlook for 2002 and beyond shows some recovery. For starters, an increased awareness of power quality and the consequences of downtime will fuel a resurgence. In addition, the replacement market for installed equipment will play a contributing role, as end-users seek cost-efficient solutions to combat budget restraints during the economic downturn.
Another factor that will boost market growth is upgrading the telecommunications infrastructure to 3G wireless technology. Such technology will offer high-speed wireless access to Internet, video, music, and other multimedia content. 3G networks are expected to carry voice and data 40 times faster than current networks, which run at 9.6 KBps. This event is expected to encourage new equipment business as well as upgrades.
So what challenges, if any, will the battery market face in the immediate future? Market saturation is one. The Y2K scare caused a surge of battery replacement that inundated the market and decreased short-term production. Farther down the road, price pressures resulting from product maturity and competition will continue to influence the market. In addition, the poor reputation of sealed lead-acid batteries may prompt end users to purchase less-expensive flooded batteries.
The transient protection, power conditioning, and lead-acid battery markets are extremely dynamic, but they are expected to increase along with the demand for redundant, high-quality, reliable power in critical applications. Power quality engineers can continue to look to the market for products that provide basic safeguards against power anomalies and protect equipment and facilities from power distortions and outages.
Sara M. Bradford is an industry analyst in the power supplies group at Frost & Sullivan, an international marketing, consulting, and training company based in San Jose, Calif. You can reach her at [email protected].