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Flexible AC Transmission Systems Market

The market for Flexible AC Transmission Systems was estimated at $1.6 billion in 2025; it is anticipated to increase to $2.1 billion by 2030, with projections indicating growth to around $2.7 billion by 2035.

Report ID:DS2401037
Author:Chandra Mohan - Sr. Industry Consultant
Published Date:
Datatree
Energy & Power
Power Generation
Flexible AC Transmission Systems
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Global Flexible AC Transmission Systems Market Outlook

Revenue, 2025

$1.6B

Forecast, 2035

$2.7B

CAGR, 2026 - 2035

5.4%

The Flexible AC Transmission Systems (FACTS) industry revenue is expected to be around $1.6 billion in 2026 and expected to showcase growth with 5.4% CAGR between 2026 and 2035. This positive outlook underscores the strategic importance of Flexible AC Transmission Systems as utilities and transmission operators prioritize grid stability, enhanced power quality, and improved asset utilization amid rising electricity demand and accelerating renewable energy integration. Investments are increasingly directed toward FACTS technology that delivers fast, dynamic voltage regulation, alleviates congestion on high-voltage transmission corridors, and defers costly grid reinforcements. With Shunt Compensation Configuration alone generating approximately $0.85 billion in industry revenue in 2025, market participants are clearly favoring advanced reactive power compensation solutions to maintain system reliability and voltage profiles. Within this market, Voltage Control and Power Control are the key applications and together account for 100.0% of deployments, highlighting how controllability, flexibility, and precise power flow management remain central to procurement strategies and long-term grid modernization roadmaps.

Flexible AC Transmission Systems, often implemented as FACTS technology, comprise power‑electronics‑based equipment such as shunt compensators, series compensators, and hybrid configurations that provide rapid, continuously variable voltage support and power flow control on AC networks. Core features include dynamic reactive power compensation, improved transmission network stability, increased power transfer capability, and enhanced damping of system oscillations, all of which are essential for the reliable operation of modern smart grid environments. Major applications span voltage control at critical nodes, power control across heavily loaded transmission corridors, congestion management, and the seamless integration of variable renewable energy resources into interconnected high-voltage transmission systems. Recent market trends driving demand include the shift toward digitally controlled, modular FACTS platforms, the integration of FACTS with wide‑area monitoring and protection schemes, and their growing role in grid modernization initiatives aimed at boosting efficiency, resilience, and operational flexibility across both mature and emerging power systems.

Flexible AC Transmission Systems market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2025-2035
Flexible AC Transmission Systems Market Outlook

Market Key Insights

  • The Flexible AC Transmission Systems market is projected to grow from $1.6 billion in 2025 to $2.7 billion in 2035. This represents a CAGR of 5.4%, reflecting rising demand across Voltage Control, Power Control, and Power Flow Management.

  • ABB, Siemens, and General Electric are among the leading players in this market, shaping its competitive landscape.

  • U.S. and China are the top markets within the Flexible AC Transmission Systems market and are expected to observe the growth CAGR of 3.5% to 5.2% between 2025 and 2030.

  • Emerging markets including India, Mexico and South Africa are expected to observe highest growth with CAGR ranging between 6.2% to 7.5%.

  • Transition like Power Grid Modernization has greater influence in U.S. and China market's value chain; and is expected to add $41 million of additional value to Flexible AC Transmission Systems industry revenue by 2030.

  • The Flexible AC Transmission Systems market is set to add $1.1 billion between 2025 and 2035, with manufacturer targeting Power Control Application projected to gain a larger market share.

  • With

    growing demand for efficient electrical systems, and

    Advancements in Power Electronic Technology, Flexible AC Transmission Systems market to expand 69% between 2025 and 2035.

flexible ac transmission systems market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032
Flexible AC Transmission Systems - Country Share Analysis

Opportunities in the Flexible AC Transmission Systems

India’s rapid renewable energy integration and transmission expansion create a prime market for Flexible AC Transmission Systems in utility-scale grids. Rising solar and wind penetration is also driving demand for shunt compensation FACTS devices such as STATCOM and SVC to enhance voltage stability and reactive power control. Although global shunt compensation revenue grows from about $0.85 to $1.12 billion by 2030, Indian deployment remains underpenetrated, especially in state transmission utilities. Smart grid upgrades and HVDC integration will accelerate adoption of advanced modular shunt solutions.

Growth Opportunities in North America and Asia-Pacific

In North America, Flexible AC Transmission Systems adoption is increasingly centered on Power Control applications, as utilities prioritize load flow control, congestion relief, and enhanced power transmission efficiency across aging high-voltage grid corridors; top opportunities lie in upgrading existing series compensation assets with advanced FACTS solutions, deploying modular power flow controllers on constrained renewable energy integration paths, and bundling grid modernization projects with digital analytics for real-time control. Competitive intensity is shaped by a mix of established high-voltage equipment suppliers, niche power electronics specialists, and engineering–procurement–construction consortia that differentiate through project execution capability, lifecycle service models, and integration of FACTS technology into broader smart grid portfolios. Key regional drivers include stringent reliability standards, policy incentives for decarbonization, the need to defer costly transmission build-outs through better utilization of existing T&D infrastructure, and growing demand from independent transmission developers seeking flexible, software-driven Power Control to manage increasingly variable power flows.
In Asia-Pacific, Flexible AC Transmission Systems are most strongly driven by Voltage Control applications, with dynamic voltage regulation and reactive power compensation critical for stabilizing rapidly expanding high-voltage transmission networks and dense urban load centers; the most attractive opportunities arise in large-scale grid reinforcement programs, long-distance bulk power transfer corridors, and integration of FACTS-based voltage control into smart substations serving fast-growing industrial and metropolitan zones. Competitive dynamics are characterized by the rapid emergence of regional manufacturers of FACTS equipment, intensified price competition, and technology partnerships between local firms and international system integrators to address country-specific grid codes and high-speed control requirements. Primary drivers include sustained electricity demand growth, aggressive renewable energy integration targets, government-backed grid modernization and interconnection initiatives, and the need for cost-effective Voltage Control solutions that enhance grid stability while supporting flexible operation of increasingly complex, multi-source power systems.

Market Dynamics and Supply Chain

01

Driver: Increasing Renewable Energy Integration and Expanding Transmission Network Modernization Globally

The Flexible AC Transmission Systems market is also primarily driven by the growing integration of renewable energy sources and the modernization of aging transmission networks. Rapid expansion of wind, solar, and hybrid power plants introduces grid variability and voltage instability, necessitating advanced reactive power management solutions. FACTS devices like STATCOMs, SVCs, and UPFCs help maintain stable voltages, improve fault ride-through, and ensure compliance with grid codes. Separately, transmission network modernization projects in emerging and developed economies aim to enhance grid reliability and efficiency, often upgrading legacy lines and substations. FACTS systems are also deployed to optimize power flow, reduce congestion, and enhance line utilization. Together, these factors are also fueling adoption, increasing capital expenditure, and encouraging utilities to invest in modular, high-speed, and digital-controlled FACTS solutions to support reliable and flexible power delivery in increasingly complex grids.
Technological advancements in power electronics, including IGBT and modular multilevel converter innovations, are also a key driver for FACTS market growth. These innovations allow devices like STATCOMs, SVCs, and Unified Power Flow Controllers (UPFCs) to deliver faster reactive power compensation, better voltage stability, and improved harmonic mitigation. High-speed digital control systems and real-time monitoring enable precise adjustment of power flow in response to grid fluctuations, supporting renewable integration and system resiliency. Utilities and industrial operators increasingly adopt these enhanced FACTS solutions for improved efficiency, reduced transmission losses, and seamless integration into smart grid platforms, reinforcing market expansion in both established and emerging power networks.
02

Restraint: High Capital Costs and Lengthy Payback Periods Hinder FACTS Deployment in Price‑Sensitive Regions

One major restraint for Flexible AC Transmission Systems is the high upfront capital investment required for advanced FACTS devices like STATCOMs, Static VAR Compensator (SVCs), and UPFCs. These solutions involve expensive power electronics, control systems, and installation costs, which can deter utilities with limited budgets. For example, smaller grid operators in developing markets may postpone FACTS procurement in favor of cheaper reactive power solutions like capacitor banks, slowing revenue growth for vendors. The lengthy payback period due to delayed efficiency gains also alters long‑term procurement decisions, reducing near‑term demand and dampening overall market expansion.
03

Opportunity: Data center corridor reliability in United States digital economy and Offshore wind integration in Germany’s high-voltage continental corridor

Explosive growth of hyperscale data centers across the United States is straining long-distance transmission corridors, opening space for FACTS in reliability-focused projects. Series compensation FACTS solutions will see the strongest uplift, improving power transfer capacity and damping oscillations on bulk lines feeding digital clusters. With global series compensation revenues increasing from about $0.46 to $0.58 billion by 2030, targeted investments around major data center hubs remain nascent. Grid operators will seek scalable, smart grid ready FACTS platforms with advanced analytics.
Germany’s accelerating offshore wind build-out in the North Sea demands Flexible AC Transmission Systems to stabilize heavily loaded export corridors. Combined compensation configurations, integrating series and shunt elements, will gain momentum to manage fluctuating power flows between coastal hubs and inland industrial clusters. Globally, combined compensation revenues rise from around $0.30 to $0.39 billion by 2030, yet European subsea and coastal networks are still early-stage adopters. Utilities and OEM collaborations will prioritize FACTS technology that supports dynamic grid codes and complex interconnection requirements.
04

Challenge: Integration Complexity and Skilled Workforce Shortages Slow FACTS System Implementation

Another key restraint is the complexity of integrating FACTS technologies into existing transmission infrastructure and the shortage of skilled engineers familiar with advanced power electronics and control software. Utilities often face technical challenges during commissioning, interoperability testing, and SCADA integration, leading to project delays and cost overruns. For instance, a transmission upgrade project may be postponed because local teams lack experience with modular multilevel converters or real‑time control systems. This integration difficulty not only increases operational costs but also discourages rapid adoption, affecting market dynamics and slowing wider implementation of FACTS solutions.

Supply Chain Landscape

1

Power Quality Management

Infineon TechnologiesVishay IntertechnologyTDK Electronics
2

High-Voltage Transmission

ABBSiemensGeneral Electric
3

Smart Grid Infrastructure

Mitsubishi ElectricAmerican SuperconductorQuanta Services
4

End-User Applications

Utility Grid Stability SolutionsRenewable Reactive Power Compensation
Flexible AC Transmission Systems - Supply Chain

Use Cases of Flexible AC Transmission Systems in Voltage Control & Power Flow Management

Voltage Control : Static synchronous compensators are widely used for voltage control in transmission and distribution networks to maintain stable and reliable power delivery. Utilities primarily deploy Static Synchronous Compensators based on voltage source converters with high dynamic response capabilities at substations or critical nodes in the grid. These systems rapidly inject or absorb reactive power to correct voltage deviations caused by fluctuating loads or intermittent renewable generation. The key advantage of STATCOMs over traditional shunt capacitors lies in their fast response and precise control, enabling utilities to reduce voltage instability, prevent equipment stress, and ensure compliance with grid code standards.
Power Control : In power control applications, STATCOMs help regulate active and reactive power flow to enhance grid efficiency and system reliability. Transmission system operators typically use high-capacity modular STATCOMs integrated with SCADA and energy management systems for real-time control. These compensators adjust reactive power injection and absorption based on system conditions, improving overall power factor and reducing losses. Their high-speed control capabilities allow operators to stabilize the network during sudden load changes or faults. By enabling efficient power control, STATCOMs contribute to improved energy quality, operational flexibility, and reduced operational costs across power generation and distribution networks.
Power Flow Management : Static synchronous compensators play a critical role in power flow management by directing and balancing electricity across transmission lines. Utilities deploy flexible STATCOM units capable of continuous reactive power support at key interconnections or congested corridors to prevent overloading and maintain optimal flow. By dynamically managing line voltages and phase angles, STATCOMs enhance network reliability, reduce transmission losses, and allow better integration of renewable energy sources. Their modular design and fast response times make them ideal for modern smart grids, enabling operators to optimize energy distribution, prevent bottlenecks, and maintain stable system operation under variable load conditions.

Impact of Industry Transitions on the Flexible AC Transmission Systems Market

As a core segment of the Power Generation industry, the Flexible AC Transmission Systems market develops in line with broader industry shifts. Over recent years, transitions such as Power Grid Modernization and Emergence of Smart Grids have redefined priorities across the Power Generation sector, influencing how the Flexible AC Transmission Systems market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Power Grid Modernization

Power grid modernization is emerging as the most material transition driver for FACTS, repositioning FACTS technology from a niche power transmission solution to a core enabler of smart grid infrastructure and renewable energy integration. By providing dynamic voltage control, congestion management, and enhanced grid reliability, FACTS directly address the intermittency and power quality challenges created by large-scale wind and solar deployment. This transition is particularly pronounced across the U.S. and China value chains, where accelerated investments in high-voltage networks and digital substations are expected to generate an additional $41 million in FACTS industry revenue by 2030. As utilities prioritize transmission capacity, grid stability, and efficiency, FACTS adoption will increasingly define competitive positioning for equipment vendors and system integrators.
02

Emergence of Smart Grids

The emergence of smart grids is accelerating the adoption of FACTS, as utilities seek more intelligent and responsive control over increasingly complex power networks. FACTS technologies, including STATCOMs, SVCs, and UPFCs, enable real-time voltage regulation, dynamic reactive power compensation, and optimized power flow, which are critical for smart grid functionality. For example, in renewable-heavy regions, FACTS devices help stabilize voltages and integrate intermittent wind and solar generation efficiently. In industrial sectors, FACTS supports high-demand facilities by maintaining power quality and reducing outages. By providing modular, fast-response, and digitally controlled solutions, FACTS is becoming central to smart grid modernization, enhancing grid reliability, operational efficiency, and enabling flexible energy management across transmission and distribution networks.