Flexible AC Transmission System Market in China

Flexible AC Transmission System in China Trends and Forecast

The future of the flexible AC transmission system market in China looks promising, with opportunities in the utility, renewable, industrial, and railway markets. The global flexible AC transmission system market is expected to reach an estimated $2.7 billion by 2031, with a CAGR of 7.9% from 2025 to 2031. The flexible AC transmission system market in China is also forecasted to witness strong growth over the forecast period. The major drivers for this market are an expansion of transmission lines, an increasing need for STATCOM devices to regulate voltage, and escalating integration of renewable energy into power grids.

• Lucintel forecasts that, within the generation category, the second generation will remain the larger segment over the forecast period.
• Within the end use category, utility will remain the largest segment over the forecast period.

Emerging Trends in the Flexible AC Transmission System Market in China

China is speeding up its energy transition, focusing on renewable energy and smart grid solutions. As the grid becomes increasingly complex, Flexible AC Transmission Systems (FACTS) are becoming important technologies to ensure stability and efficiency. With increasing solar and wind capacities, urbanization, and increasing electrification, FACTS technologies are becoming strategically important. These systems assist in real-time voltage, frequency, and load flow management, and thus are crucial for the changing power scenario. The trends below identify how China is leading the application of FACTS to achieve energy objectives as well as targets of grid modernization.

• Expansion of Ultra-High Voltage Networks: China is increasing ultra-high voltage (UHV) transmission lines to transport high quantities of power over extended distances. FACTS devices are crucial to maintaining stability and reducing losses in these networks. They provide improved control over voltage levels and reactive power. This is an indication of the countries vision to connect remote renewable generation locations to urban load centers. By maximizing the efficiency of long-distance transmission, FACTS technologies help ensure the reliability and robustness of UHV systems, which form the basis of Chinese national power strategy.
• Decentralized Grid Operations: As there is an increase in distributed generation and microgrids, China is transforming from the centralized to decentralized grid configurations. Flexible support is offered by FACTS solutions like STATCOMs and SVCs in controlling voltage fluctuations and keeping local power quality at its best. These devices facilitate improved control across different grid nodes, backing the energy transition for urban and rural areas. The trend facilitates local grid resilience along with smoother localized renewable integration, marking a new trend in planning and operating Chinese power networks.
• Transportation Electrification: The very fast development of electric vehicles in China is straining urban and suburban grids. FACTS technologies assist in coordinating the dynamic EV charging infrastructure-based load profiles. Equipment like dynamic voltage restorers and unified power flow controllers facilitates reliable power delivery and voltage management. This movement is an illustration of how FACTS enable transportation electrification through lessening strain on local grids and providing an unbroken supply of power, which is essential as the nation transitions towards massive electric mobility uptake.
• Expansion of Offshore Wind Integration: China is heavily investing in offshore wind farms, several of which are located far from mainland consumption hubs. FACTS devices play an important role in managing voltage control, power oscillations, and reactive power management in subsea transmission. The trend indicates the drive to exploit coastal wind energy while ensuring grid stability. With enhanced transmission support and fault ride-through capabilities, FACTS improve the feasibility and reliability of offshore wind integration, making them key elements in Chinese renewable energy mix.
• Emergence of Digital FACTS Controllers: Digitalization is changing FACTS systems with the integration of real-time monitoring and artificial intelligence-based control algorithms. In China, it is concentrating on smart grid automation, where digital FACTS equipment enhances operating precision and reactivity. These intelligent controllers give predictive insights into grid disturbances, which optimize decision-making in milliseconds. The trend makes it possible to transition to autonomous grid operation, enhancing overall efficiency and resilience. It also resonates with national programs for digital infrastructure and leading-edge power electronics development.

These new trends show how China is aligning its FACTS market with its overall energy and technological ambitions. From enabling ultra-high voltage networks to supporting decentralized grids and digital control, FACTS are driving grid innovation. The increasingly complex power systems fueled by renewables and electrification require smart, responsive solutions. FACTS technologies are moving beyond their conventional applications to becoming enablers of grid transformation and stability during a period of accelerated energy transformation.

Recent Developments in the Flexible AC Transmission System Market in China

Chinese power infrastructure is modernizing at a rapid pace, led by the requirements of efficiency, stability, and integration of renewable energy. FACTS systems are increasingly playing a critical role in optimizing power transfer and ensuring the quality of the grid. Policy developments, investments in smart technology, and industry partnerships are rapidly driving the implementation of FACTS. These advancements not only improve operational performance but also comply with Chinese vision of a cleaner, wiser energy future. The following are five significant developments that are contributing to the existing trend of the FACTS market in China.

• Expansion of National Smart Grid Pilot Programs: The government has increased smart grid pilot areas in provinces to pilot next-generation FACTS systems. The initiatives involve real-time data management, digital twin simulation, and AI-based controllers. The objective is to prove scalable grid management techniques with FACTS technologies. State-owned enterprises are spearheading the deployments, and the initiative increases FACTSÄX%$%X visibility and technical competence. The development is vital for future mass-scale deployment and supports national digital energy objectives.
• Partnerships with Academic and Research Institutions: Chinese power firms are collaborating with universities and R&D facilities to jointly develop next-generation FACTS solutions. Collaboration is centred on dynamic performance enhancement, design compactness, and power efficiency. The result of these collaborations is better product reliability and customized designs for local grids. This kind of collaboration speeds up the technology transfer and supports China as a global leader in power system innovation, filling the gap between theoretical innovation and commercialization.
• New Manufacturing Plants for FACTS Components: Some local manufacturers have established specialized plants to manufacture FACTS components like thyristors, reactors, and control systems. These factories seek to localize production, cut costs, and respond to growing domestic demand. Increased capacity ensures timely project implementation and less dependency on imports. This initiative aids national self-reliance and consolidates supply chains, which is important as grid technology is strategic to energy security.
• Integration into Renewable Mega Projects: FACTS technologies are becoming integral parts of large-scale solar and wind installations in provinces such as Xinjiang and Inner Mongolia. They tackle intermittency and power quality problems, making them grid code compliant. Their incorporation minimizes curtailment and maximizes the financial attractiveness of renewable assets. This innovation highlights how FACTS are being integrated into renewable infrastructure, increasing their commercial significance and aiding Chinese renewable energy goals.
• Evolution of Mobile FACTS Units: China has started to deploy mobile FACTS units for temporary grid support and emergency voltage stabilization. The small, self-contained systems are deployed in disaster-stricken or remote regions to offer rapid reactive power compensation. Their mobility facilitates rapid deployment in the event of grid disturbances or maintenance activities. This innovation strengthens the resilience of the grid and offers a flexible solution to abrupt voltage problems, which supports disaster preparedness and rapid response efforts.

Recent advancements in Chinese FACTS market showcase the nations aggressive drive to upgrade its power infrastructure. With innovation spanning from mobile-based solutions to consolidated support for renewable projects and localized production, China is establishing a strong and resilient FACTS market. These innovations guarantee that China maintains a leading position in renewable integration and grid modernization, further cementing its status as a leader in the development of energy infrastructure in the world.

Strategic Growth Opportunities for Flexible AC Transmission System Market in China

China is experiencing a very fast evolution in its power infrastructure grid to serve increasing energy demand and the integration of renewables. The Flexible AC Transmission System (FACTS) market is expected to grow significantly because technological innovations and changing energy policy are driving the need across different applications. From improving grid stability to enabling the large-scale integration of renewable energy, FACTS solutions are increasingly becoming vital in optimizing Chinese power systems. The following are strategic growth opportunities by application, each of which has the potential to redefine the industry.

• Renewable Energy Integration: China is increasing its renewable energy capacity, specifically solar and wind. FACTS devices assist in managing voltage fluctuations, reactive power, and power quality issues related to intermittent renewable sources. By facilitating the smooth integration of renewable energy into the grid, FACTS solutions minimize curtailment and maximize the efficiency of green energy projects. This is in line with Chinese drive to be carbon-neutral by 2060 and support Chinese renewable energy goals through the establishment of a stable and dependable grid for renewable generation.
• High Voltage Transmission Systems: The growing need for long-distance, high-voltage power transmission necessitates the need for FACTS devices to control voltage and stabilize power flow. These systems allow for efficient delivery of power to large regions with minimized losses and increased reliability. FACTS technology, including SVCs and STATCOMs, offers dynamic control of voltage to make ultra-high voltage transmission lines stable and enable reliable power delivery from remote generation points to urban areas. This is at the core of Chinese energy policy, particularly with the development of ultra-high voltage (UHV) transmission grids.
• Smart Grid Deployment: With China embracing smart grid technologies, FACTS systems play a pivotal role in offering real-time voltage regulation, dynamic compensation, and grid optimization. These devices allow for quicker and more accurate responses to power swings, providing an uninterrupted and stable electricity supply. The expansion of smart grids in China provides FACTS solutions with a pivotal position in upgrading the grid. Their integration increases automation, enhances system stability, and aids China in its vision of developing a digitally upgraded power infrastructure to meet rising energy demands.
• Electric Vehicle Charging Networks: The development of electric vehicles (EVs) in China has generated a heightened demand for power from charging stations. FACTS devices assist in controlling the fluctuating loads generated by charging infrastructure, avoiding voltage dips, and facilitating efficient power distribution. This growth opportunity is conducive to Chinese ambitious agenda for mass EV adoption. Through grid stability and enhanced power quality in urban areas, FACTS systems improve the performance of EV charging networks, which are crucial to the realization of Chinese transportation electrification objectives.
• Industrial Applications: Chinese fast-developing manufacturing industry demands effective and efficient power for manufacturing processes. FACTS systems have a vital contribution to make in industrial applications by offering dynamic voltage support, minimizing power disturbances, and optimizing power flow. This provides the scope for FACTS technologies to maintain seamless operations in energy-intensive industries such as steel, chemicals, and automotive production. As China continues to industrialize, FACTS solutions are expected to play a larger role in supporting the power needs of its manufacturing and industrial hubs.

These strategic growth opportunities demonstrate the importance of FACTS technologies in enabling Chinese ambitious industrial and energy targets. From the integration of renewable energy to smart grid use, FACTS play a critical role in maintaining the stability, efficiency, and sustainability of Chinese power grids. The opportunities presented by high voltage transmission, EV charging networks, and industrial applications reinforce the importance of FACTS as a key element in the upgrading of Chinese energy infrastructure.

Flexible AC Transmission System Market in China Driver and Challenges

The Chinese Flexible AC Transmission System (FACTS) market is shaped by a variety of technological, economic, and regulatory forces. Technological innovation and the need for a cleaner, more efficient energy system are fueling demand for FACTS solutions. At the same time, regulatory systems and economics offer opportunities and pose challenges for the market. The following are the most significant drivers and challenges shaping the Chinese FACTS market, followed by an overview of their combined effect.

The factors responsible for driving the Flexible AC Transmission System market in China include:
• Growing Demand for Renewable Energy: Chinese fast-paced shift towards renewable energy, such as wind and solar, is one of the primary drivers for the FACTS market. As renewable energy is inherently variable in nature, FACTS solutions like STATCOMs and SVCs are needed to ensure grid stability and voltage fluctuation management. Since China has set a goal to become carbon neutral by 2060, efficient power flow management is essential to integrate renewable sources into the grid, thus making FACTS technologies a necessary component in guaranteeing a sustainable and stable energy mix.
• Ultra-High Voltage (UHV) Network Expansion: The continued development by China of ultra-high voltage (UHV) transmission lines for delivering power over long distances is a key market driver for FACTS. These networks suffer from great demands to sustain voltage stability and to reduce losses. FACTS technology assists in optimal power flow control and reduction in line losses, and allows for effective transfer of power from distant sources of renewable power to consumption areas in cities. The development of UHV grids supports Chinese energy strategies and establishes a solid demand for solutions using FACTS.
• Integration of Smart Grid and Automation: The growth in smart grid technology is fueling the use of FACTS solutions. Smart grids demand real-time monitoring, control, and dynamic response to emerging grid conditions. FACTS equipment adds flexibility and reliability to smart grids through real-time voltage control and power quality optimization. Increased automation and digitalization in the energy industry trend bolsters advanced FACTS solutions development, key to efficient operations in todaies power grids.
• Electrification and Urbanization of Transportation: Chinese urbanization and electrification of transportation infrastructure are major drivers for FACTS technologies. With growing urban populations, the need for stable power in cities increases. FACTS devices provide stable power delivery in urban networks, particularly in regions with growing electric vehicle charging infrastructure. These technologies assist in managing the added power demand without compromising grid stability, which is in line with Chinese emphasis on green transportation and urbanization.
• Investment in Infrastructure and Government Policies: The Chinese governments support for energy infrastructure development, including funding for renewable energy and grid modernization projects, is a key driver for the FACTS market. Energy efficiency, grid stability, and carbon reduction policies have promoted investments in FACTS technologies. Government programs promote the use of such solutions in urban and rural grids to ensure that the power infrastructure is compatible with Chinese long-term energy goals.

Challenges in the Flexible AC Transmission System market in China are:
• High Initial Capital Costs: One significant challenge facing the Chinese FACTS market is the prohibitively high initial capital expenditure of installing and holding FACTS devices. While these devices offer long-term advantages in terms of efficiency and stability of the grid, the amount of investment needed to deploy them can be overwhelming for certain grid operators. This problem can hinder the large-scale application of FACTS, particularly in smaller or less-developed areas that might have difficulty finding finances for such massive infrastructure projects.
• Technical Complexity and Integration Problems: Yet another challenge is the technical intricacy of integrating FACTS solutions within existing grid infrastructure. The design, installation, and maintenance of FACTS equipment demand specialized know-how, and integrating them within legacy systems might be problematic. Moreover, there is a threat of system downtime during installation or upgrades. Such challenges need precise planning and proficient manpower to complete the integration and avoid disrupting the grid operations at the time of implementation.
• Policy Alignment and Regulatory Hurdles: Regulatory environments in China can sometimes pose challenges for the implementation of FACTS technologies. Although the government is favorable to grid modernization, local policies and inconsistent regulations may discourage fast deployment of new technologies. There should be harmony between local and national policies to simplify the deployment of FACTS equipment. Delayed regulatory approvals or policy dissonance may discourage market growth and hold back the achievement of energy objectives.

The factors, such as renewable energy integration, expansion of the UHV network, and government incentives, create a bright future for Chinese FACTS market. Nevertheless, challenges from high capital expenditure, technological complexity, and regulatory issues must be overcome to facilitate maximum market growth. Meeting these challenges will prove decisive in making FACTS technology widespread so that China has a robust, efficient, and sustainable power grid to cater to its future energy demands.

List of Flexible AC Transmission System Market in China Companies

Companies in the market compete based on the product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leveraging integration opportunities across the value chain. Through these strategies, flexible AC transmission system companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the flexible AC transmission system companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7

Flexible AC Transmission System Market in China by Segment

The study includes a forecast for the flexible AC transmission system market in China by generation, product, end use, and application.

Flexible AC Transmission System Market in China by Generation [Analysis by Value from 2019 to 2031]:

• First Generation
• Second Generation

Flexible AC Transmission System Market in China by Function [Analysis by Value from 2019 to 2031]:

• Voltage Control
• Network Stabilization
• Transmission Capacity
• Harmonic Suppression

Flexible AC Transmission System Market in China by Application [Analysis by Value from 2019 to 2031]:

• Voltage Control
• Power Control

Flexible AC Transmission System Market in China by End Use [Analysis by Value from 2019 to 2031]:

• Utilities
• Renewables
• Industrial
• Railways
• Others

Features of the Flexible AC Transmission System Market in China

Market Size Estimates: Flexible AC transmission system in China market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Flexible AC transmission system in China market size by generation, product, end use, and application in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different generations, products, end uses, and applications for the flexible AC transmission system in China.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the flexible AC transmission system in China.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.

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FAQ

Q1. What are the major drivers influencing the growth of the flexible AC transmission system market in China?
Answer: The major drivers for this market are an expansion of transmission lines, an increasing need for STATCOM devices to regulate voltage, and escalating integration of renewable energy into power grids.
Q2. What are the major segments for flexible AC transmission system market?
Answer: The future of the flexible AC transmission system market looks promising with opportunities in the utility, renewable, industrial, and railway markets.
Q3. Which flexible AC transmission system market segment will be the largest in future?
Answer: Lucintel forecasts that, within the generation category, the second generation will remain the larger segment over the forecast period.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.

This report answers following 10 key questions:

Q.1. What are some of the most promising, high-growth opportunities for the flexible AC transmission system market in China by generation (first generation and second generation), function (voltage control, network stabilization, transmission capacity, and harmonic suppression), application (voltage control and power control), and end use (utilities, renewables, industrial, railways, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Flexible AC Transmission System Market In China, Flexible AC Transmission System Market In China Size, Flexible AC Transmission System Market In China Growth, Flexible AC Transmission System Market In China Analysis, Flexible AC Transmission System Market In China Report, Flexible AC Transmission System Market In China Share, Flexible AC Transmission System Market In China Trends, Flexible AC Transmission System Market In China Forecast, Flexible AC Transmission System Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.