The need to boost energy efficiency along with massive infrastructure investments in developing countries are among factors expected to drive strong market growth for both low-power and high-power AC drives, according to two new studies from ARC Advisory Group Inc., Dedham, Mass. ARC projects that the worldwide market for high-power AC drives will expand at a compound annual growth rate of 9.1 percent over the next five years, rising from more than $4.7 billion in 2006 to nearly $7.4 billion in 2011. The global market for low-power AC drives, meanwhile, is expected to grow at a 7.9 percent annual pace, turning last year’s $6 billion market into an $8.7 billion market by 2011, according to ARC. Attractive payback Demand for energy and basic materials is growing at an astounding rate, driving demand for AC drives worldwide. In addition to speed, control, and energy costs, AC drives also offer greater reliability, soft-start, a higher power factor, and improved efficiency. “Of all these factors, energy savings is an easily measurable component for the return on investment (ROI). The payback period for an AC drive investment, based on energy savings alone, is very attractive,” says Senior Analyst Himanshu Shah, the principal author of ARC’s “High Power AC Drive Worldwide Outlook, Market Analysis & Forecast Through 2011” and “Low Power AC Drive Worldwide Outlook, Market Analysis & Forecast Through 2011.” Increasing pressure to improve financial performance is driving a significant change in the way that end users approach everything they use to control production, engineering, operations, and maintenance across the manufacturing enterprise. Apart from helping users reduce energy costs and thereby gain competitiveness, the application of AC drives also results in process controllability improvements. AC drives are also more reliable and easier to maintain, and these factors help in reducing the total cost of ownership (TCO). With all these benefits, the use of AC drives clearly increases the return on investment and reduces the payback period. Investments were made in many industrial segments to cater to growing consumer demand and infrastructure development needs. This environment clearly shows a boon for AC drive suppliers, because AC drives are widely used in industrial and building automation industries and are favored energy saving devices in this era where global energy demand outpaces the supply. Infrastructure demands While the energy savings aspect significantly boosts demand for AC drives, increasing infrastructure requirements in the “flat world” have created huge demand in developing countries for new infrastructure that almost parallels developed countries. Airport facilities and new road construction are driving demand for products from the metals, mining, cement, and oil industries. An expanding economy in emerging countries is also creating a greater need for more modern buildings with a broad use of building automation. The need for more electricity is driving huge investments in the electric power industry. All of these sectors broadly use AC drives. ARC has found that Eastern Europe, the former Soviet Union, and the Middle East continue to represent strong growth opportunities for AC drives. China is still one of the biggest growth markets and will remain so for the next several years. India’s economy is likely to continue growing at a robust rate. With energy demand outstripping the supply, demand for AC drives will continue to increase. ARC Advisory Group Inc.www.arcweb.com
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