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Fracking energises MV drives sales in the Americas

10 December, 2013

The unconventional energy revolution for shale gas and oil in North America has led to strong sales of medium-voltage (MV) drives in the Americas, with the market expected to expand by more than 14.5% during 2013 and a further 9.5% in 2014. According to the market analyst IHS, these strong sales offset weaker sales in China during 2012, resulting in the global market for MV drives expanding by 6% to reach $2.6bn. It expects the 2013 global growth rate to average around 8%, with big regional differences.

The MV drives market in the Americas is highly dependent on how the oil and gas industry performs. In 2012, IHS estimates that more than 35% of American MV drive sales went into this sector. But it adds that predicting sales to the oil and gas industry is complex because sales into upstream, midstream, and downstream applications are expected to diverge between 2013 and 2017.

In the midstream segment, MV drives are used to power compressors and pumps for pipeline transportation. IHS expects sales growth here to slow during 2014, as North American governments reach an agreement on the future of LNG exports and further pipeline expansion across the United States.

In the Asia-Pacific region, China accounted for two-thirds of the MV drives market by revenue in 2012. But overcapacity in the Chinese metals, cement, and shipbuilding industries has resulted in weaker MV drive sales in the PRC.

Global market for MV drives in 2012: regional sales ($m, left axis) and growth rates (%, right axis)
Source: IHS

IHS predicts that MV drive sales growth will increase in China during 2014 as a different set of industries start to demand the technology. The continuing strength of the US and Canadian markets, coupled with a resurgent Latin America, is predicted to result in the Americas being the fastest-growing global region for MV sales during 2014.

“A seismic shift in MV drive demand by industry over the next five years is leading to a very different MV drives market,” suggests IHS analyst, Rolando Campos. “In this challenging economic environment, it is more important than ever to understand what is driving these changes.”

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