The value of the global market for high-voltage direct current converter stations is predicted to rocket from $8.3bn last year to $89.6bn by 2020.

A new report states that rising demand for electricity in the Asia Pacific region and the growth in renewable energy generation will be behind the massive growth.

The analysis from research and consulting firm GlobalData says that the 2012 figure of $8.3bn was a significant rise on the $1.1bn value in 2006, however it forecasts a boom during the rest of this decade, with cumulative capacity reaching 543.7 GW.

The report concludes that a major driver behind the growth “will be the need to transmit clean energy generated in renewable power plants to urban areas with fewer transmission losses”.

It adds that the HVDC converter station market will also “benefit from the increasing number of cross-border interconnections being implemented in Europe, Asia Pacific and the Middle East to improve electricity security and reliability”.

China is currently leading the HVDC substation sector, accounting for a cumulative share of 51 per cent between 2006 and 2012, and by 2020, China’s value of its market share is expected to reach $27.1bn says GlobalData.

Ginni Hima Bindu, GlobalData’s power analyst, said: “Power plants in China are located close to the sources of fuel – hydropower and offshore wind power plants – and are far away from the urban areas. This means that power has to be transmitted over long distances, leading to a growing need for stable HVDC infrastructure.

“Furthermore, the advanced technology in HVDC systems is able to provide transmission systems with benefits such as transient stability improvement, voltage stability and control, absence of reactive power, and the removal of cascading disturbances. HVDC transmission lines enable power transmission over long distances – around 500km and over – with minimal power losses.”

However, the GlobalData report warns that high implementation costs and the lengthy approval processes for transmission projects are major barriers to the growth of HVDC systems, “as they only become economical when used over very long distances”.