Sales of medium-voltage drives in the Chinese market are forecast to grow at an average of 16.6 percent per year from 2010 to 2015, according to IMS Research.

(Although the company also reports that the low voltage drives market in China is cooling off.)

Wilmer Zhou, senior analyst, comments, “The market for medium-voltage motor drives is closely related to large projects and capital investment. As the Chinese government tries to transform the economic growth model from investment to consumption, the investment in mines, oil and gas fields and infrastructure expansion will continue, as will energy-saving renovations in factories, which will help to maintain the steady growth of the market for medium-voltage motor drives.”

The Chinese market for medium-voltage motor drives continued to grow steadily in 2011, increasing 15.8 percent to nearly $700 million, because most industries continued to invest steadily in “green” products. Growth will slow slightly in 2012, as municipality spending and investments are slightly lower in 2011 and 2012.

“In China, users of medium-voltage motor drives have the backing often of being in strong, state-owned groups. These key industries are dominated by the Government, and procurement has always been heavily tinged by politics. Suppliers with good government relationships and those with the backing of state-owned groups have more opportunities in the market”, added Zhou.

Overall, the leading suppliers LD-Harvest, Siemens and Hiconics are capturing a greater share of the market share while the smaller suppliers are holding or losing market share. Siemens and LD-Harvest, the market leaders, each accounted for an estimated 15 to 17 percent of total 2011 revenues. With an aggressive market strategy, Hiconics is estimated to have increased its market share to 11.5 percent in 2011.

For small companies looking to enter the medium-voltage drive market the three largest barriers to entry are: having to bid at an unreasonably low price, extended payment terms, and no service fees. However, the higher profit margin in high-end markets (mining hoists, traction, rolling mills, and applications with high power rating) is attracting new suppliers. There are just over 30 suppliers to the market for medium-voltage motor drives in China. Supply is very concentrated, with the top three suppliers accounting for an estimated 45 percent of the total revenues in 2011, and the top 10 suppliers accounting for 77 percent.

IMS Research forecasts that growth from 2013 to 2015 will ramp up. The reasons for this are that investment into infrastructure is expected to come back after a short downturn in 2012, the number of retrofit projects for power saving will increase, and there will be increased installation of high-efficiency motors.

According to IMS Research, the Chinese market for low voltage motor drives slowed considerably in 2011 from an abnormally high 2010. Revenues from motor drives (excluding software and services) are projected to grow at a compound annual growth rate (CAGR) of 13.7 percent from 2010 to 2015.

The total Chinese market for low-voltage AC & DC motor drives (including software and services) was estimated at $2.68 billion in 2010.

“In the first half of 2011, the markets for low-voltage drives were still growing strongly. In the second half of 2011, as the Chinese Government tightened monetary policies and imposed strict lending conditions; this caused delays in numerous large projects, such as high-speed railways, city metros, highways, and factory renovation projects. These policies are also causing financial strain for both end users and machine builders”, said a company spokesperson.

"In June 2011, the market went into a precipitous decline. The bad news first came from local small and medium machine builders in South and East China; many reported no new orders during the second half of the year and many small machine builders went bankrupt and closed. The low-voltage motor drive market has been more affected than that for the medium-voltage drives, because of its greater dependence on machine builders. Nevertheless, with $3.1 billion in revenues in 2011, China still accounted for 25 percent of the world market for low-voltage motor drives."

The company says that ABB and Siemens are the market leaders in the Chinese low-voltage motor-drive market in 2011, with 16 percent and 13 percent share respectively. Market leadership is concentrated, as the top five suppliers accounted for nearly 46 percent of the total. However, there are many other suppliers, each with less than 1 percent of the total revenues.

Growth in the Chinese market will continue, because of implementation of policies regarding motor efficiency and energy-saving renovations in various industries. But market growth will be at a lower rate than in the past few years as investment is reduced in the near future, with concerns over high inflation in China.

The European integrated motors and drives (IMD) market has recently recorded consistently high growth rates, except in 2009 when it was affected by the economic recession. During that year, the European IMD market witnessed greater decline in demand (about 14%), compared to the global IMD market (about 13%).

However, with numerous drivers and fewer addressable challenges, the European IMD market is ready to bounce back. Frost & Sullivan anticipates a cumulative annual growth rate of 12.1% from 2010 to 2017.

“The demand for high efficiency, along with the need to reduce energy consumption, is set to attract investments in IMD solutions,” notes Frost & Sullivan Research Analyst Ramasubramanian Natarajan. “Heightened knowledge about their potential benefits will extend the implementation of IMDs across an extensive range of industrial applications.”

IMDs are expected to gain preference over stand-alone motors and drives over the long-term. This, however, will depend on anticipated technological advancements in functionality and the availability of the technology at an affordable cost.

“The optimal compatibility of the variable frequency drive (VFD) with the motor in an IMD ensures efficient performance, with efficiency levels exceeding 90%,” remarks Ramasubramanian. “This also makes IMD units easier to deploy than procuring motor and drive as two separate components and then combining them to achieve desired performance. It also reduces lag time and increases productivity.”

While these are positive signs, the immediate challenge for IMD manufacturers will be to scale down high initial costs and project product benefits more clearly to end-users. Another issue has been the technical inability, so far, to develop IMDs for higher power ratings.

“Due to technological limitations, above a certain point, the physical size of the product makes the integration of motor and drives lose its meaning,” explains Ramasubramanian. “While VFD solutions are in position to meet customer demands for higher power rating applications, IMD solutions are not perceived to be cost-effective at high power levels, thereby limiting the overall growth potential of the market.”

Technological advances and their availability across a range of power ratings will lead to the deeper penetration of IMDs into a wider range of applications. This, in turn, will boost customer acceptance of the technology. Competitive price levels will also contribute to encouraging demand for integrated motors and drives across key end-user industry segments.

According to Frost & Sullivan, the European Market for Integrated Motors and Drives market earned revenues of $285.3 million in 2010 and estimates this to reach $632.8 million in 2017. The research covers AC, DC, servo and stepper integrated motors and drives.

If you are interested in more information on this study, please send an email with your contact details to Anna Zanchi, Corporate Communications, at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Timing the announcement with the AHR show this week in Chicago, Danfoss has introduced the VLT® HVAC Basic Drive - a small, full-featured variable speed drive that promises reliable, low-cost HVAC performance for basic fan and pump operations.

“In some fan and pump operations advanced drive features are unnecessary and, because they are superfluous, simply add to overall costs.  The VLT HVAC Basic Drive is an ideal solution that strikes the optimum balance between price and variable speed drive performance in these straightforward HVAC installations,” says Ed Smith, a company representative.

VLT HVAC Basic Drives minimize wear on HVAC equipment and maximize system up-time, while reducing HVAC system operating costs up to 15%. 

The company says that the VLT HVAC Basic Drive is the most compact drive in its class and with its specifications to reduce panel space requirements. Numerous built-in features reduce, and in some applications may even eliminate, the need for additional external equipment such as gateways, PI controllers and PLCs.  An Automatic Energy Optimizer function reduces energy consumption by up to 15%, while “sleep mode” functionality can help further reduce operating costs and extend drive life.  Bypass frequencies minimize operating noise, vibration and resonance issues.

VLT HVAC Basic Drives also feature a “start up wizard” that makes drive set-up fast and simple, and easy tool access further aids fast and effective commissioning and operation.  A robust single-piece enclosure provides reliable, maintenance-free operation in ambient temperatures up to 50 degrees C, with no external cooling required.  A unique cooling concept provides problem-free performance, even in harsh environments, without forced air flowing over the electronics.

Increased discussion about global warming and energy dependency is leading to massive push toward energy-efficient systems. And electric motors account for about 60% of the total industrial power use in Europe.

Slowing down a motor to its optimum speed could lead to significant energy savings and help in reducing carbon footprints. Carbon emissions are directly linked to climate change (global warming), which demands strong reduction in energy usage. The road to greater energy efficiency starts with highly efficient electric drive systems. There is a simple business sense for being more energy efficient as it has a direct impact on our investments. Lower the energy consumption, lower are the energy bills, reducing the need for energy production, contributing to lower carbon emissions. Reducing energy waste leads to decline in energy spent. Most businesses can account their contribution in balancing global warming by cutting down their energy consumption. Usage of electric drives can reduce the overall energy consumption of a plant by up to 50%, depending on how efficiently the system is implemented.

Global Warming – Statistics and Impacts:

Frost & Sullivan estimates that in the current scenario, about 25,000 million tons of CO2 is released by the industries across Europe and despite several measures this has projected an increase year on year. The need for energy has been rising steadily and as per International Energy Agency’s (IEA’s) publication, if the current policies were to be in effect in the future, the emission would increase by 120% in 2050, while oil demand would rise by 65%. The effect of global warming has already started to show adverse effects on the environment. Numerous long-term changes have already been recorded for example, increase in global average air and ocean temperatures, meltdown of Arctic and Antarctic snow and ice, leading to increase in the sea level.

Global Warming – Mitigation and Measures:

The Industrial sector is responsible for consumption of about 41.6% of the total electricity produced in Europe.

Recent years have witnessed an influx of regulations applied to all manufacturing industries across Europe. In 2001, the climate change levy was introduced, followed by climate change agreements. The European Union Emission Trading System (EU ETS) came into effect from 2005, followed by the environmental permitting regime in 2008. The most recent, Carbon Reduction Commitment Energy Efficiency Scheme is now being widely implemented across Europe, starting from April 2010. The new set of motor efficiency regulations namely IE1, IE2 and IE3 is another big step in controlling carbon emissions. All the motors entering the market on or after 16 June 2011 must comply with IE2 standards. From 1 January 2015, motors of power rating between 7.5 kW to 375 kW being placed in the market must comply to IE3 efficiency standards or IE2 standards if they are equipped with variable speed control. From 1January 2017, motors of power rating between 0.75 kW to 375 kW being placed in the market must comply to IE3 efficiency standards or IE2 standards if they are equipped with variable speed control.

Chart1: Energy Consumption: Per cent Distribution by Application Sectors (Europe), 2010

Undoubtedly, the biggest impact on energy savings can come from applying variable speed drives to many of the electric motors used throughout industries across Europe. Realizing this, Carbon Trust – an independent non-profit organization set up by the UK Government- has taken a large step in controlling CO2 emissions through its Big Business Refit program, which encourages industries across UK to invest and implement newer and more environmental-friendly technologies like variable frequency drives and energy efficient electric motors, by extending interest-free loans from £3,000 to £500,000. In the first half of 2009, Carbon Trust extended interest-free loans to hundreds of SMEs to equip their businesses with the latest energy-saving technology. Carbon Trust claims that they are saving an average of £14,000 each on their annual energy bills.

Variable Frequency Drive:
A variable frequency drive (VFD) allows a motor’s speed to be varied electrically, instead of mechanical means. The insulated gate bipolar transistor technology, which creates the variable voltage and frequency to control a motor’s speed, technically, has much greater efficiency and offers wide flexibility of operation. Apart from saving a great deal on electrical power consumption, it also offers soft-start capability, where-in the motor is slowly ramped up to the desired speed, instead of being thrown abruptly upon switching on. This reduces the mechanical stress on the motor and increases its life. The motor’s speed can be easily adapted to changing process conditions using a variable frequency drive, thereby achieving greater process control. Optimizing the speed of a motor using a VFD can result in enormous energy conservation, reducing the cost of recurring investments.

Usage of VFDs can also contribute in the reduction of other secondary cost cutting factors. For example, heating a business premise consumes significant amount of energy. It is estimated that for every 1oC of extra heat increase, there is an increase in the energy consumption by 8%, thereby adding 8% to the energy bills. Employing several electric drives, spread over the premises, can contribute to overall heating of the premises, reducing the energy required for HVAC devices.

Adopting Green Technology:
The implementation level of VFDs across European industries is estimated to be only about 45% to 50%, by 2010. This has resulted in a reduction of CO2 emissions by 6,000 million tons per annum. With increasing presence of VFDs in diverse markets across Europe, further reductions in CO2 emission is inevitable. The return of investments for today’s advanced drives is less than a year. This makes the usage of VFDs relatively economical and enables companies to be environmentally responsible, thereby making the technology sustainable.

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This is first in a DrivesMag Exclusive series of articles on the business of drives from global research company Frost & Sullivan.

Vacon first established a subsidiary in China in 2003 to focus on providing AC drives solutions for the local market and, as a spokesperson says "to help Chinese enterprises and society to become highly efficient in the utilization of energy and control of CO2 emissions."

Today, the company has announced a significant investment in that subsidiary, inaugurating a new 24K square meter factory in Suzhou.

The new plant also has a R&D lab and the after-sales service center for the Asia-Pacific region.

Danfoss has been re-approved by the International Association for Continuing Education and Training (IACET) as an Authorized Provider of Continuing Education Units (CEUs) for five years. Danfoss offers education programs to more than 1000 participants each year in all aspects of selecting, installation, commissioning and servicing their drive products.