Shunt Reactor Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, 2022 Segmented By Form Factor of Product (Oil-Immersed Reactor and Air Core Dry Reactor), By Form Factor (Fixed Shunt Reactor and Variable Shunt Reactor), By Rated Voltage (Less than 200 kV, 200kV-400kV and Above 400kV), By End-user (Electric Utility and Renewable Energy), By Region, Competition 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 3.01 Billion
CAGR (2026-2031)	6.49%
Fastest Growing Segment	200kV-400kV
Largest Market	Asia Pacific
Market Size (2031)	USD 4.39 Billion

Market Overview

The Global Shunt Reactor Market will grow from USD 3.01 Billion in 2025 to USD 4.39 Billion by 2031 at a 6.49% CAGR. Shunt reactors are inductive electrical devices utilized in high-voltage transmission systems to absorb reactive power and stabilize voltage levels during load variations. The primary drivers supporting the growth of this market include the escalating global demand for electricity and the imperative to integrate variable renewable energy sources into national grids. Furthermore, the extensive modernization of aging power infrastructure in developed economies necessitates the substantial deployment of these stability-enhancing components to ensure network reliability and efficiency.

According to the International Energy Agency, in 2024, global investment in electricity grids was projected to reach USD 400 billion. This significant financial commitment highlights the critical need for transmission equipment, yet the market faces a substantial challenge regarding supply chain bottlenecks for key raw materials such as electrical steel. These logistical constraints frequently result in extended manufacturing lead times and increased costs, which can impede the timely execution of essential grid expansion projects.

Key Market Drivers

Rapid expansion of renewable energy integration and grid interconnection acts as a primary catalyst for the shunt reactor market. As variable sources like wind and solar enter the energy mix, grid operators must manage significant voltage fluctuations caused by intermittent generation. This necessitates the deployment of inductive devices to absorb excess reactive power, particularly during periods of low load or high generation. According to the International Energy Agency, January 2024, in the 'Renewables 2023' report, annual renewable capacity additions increased by 50% to almost 510 gigawatts in 2023, marking the fastest growth rate in two decades. This accelerated deployment directly correlates with the increased requirement for compensation equipment to ensure network stability and compliance with stringent grid codes.

Increasing investments in long-distance high-voltage transmission projects further propel market expansion. Utilities are constructing extensive transmission superhighways to transport electricity from remote generation sites to demand centers, which inherently generates high capacitive reactive power that must be neutralized. According to National Grid, May 2024, in the 'Full Year Results 2023/24' statement, the company executed a record capital investment of GBP 8.2 billion across its UK and US networks to upgrade critical infrastructure. Such financial commitments reflect a global trend toward fortifying transmission backbones to handle higher loads. According to the International Energy Agency, in 2024, global electricity demand is forecast to grow by roughly 4%, reinforcing the necessity for reliable high-voltage systems equipped with adequate shunt reactors.

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Key Market Challenges

The Global Shunt Reactor Market is severely restricted by supply chain bottlenecks impacting the availability of essential raw materials, most notably grain-oriented electrical steel. These logistical hurdles create a production bottleneck that prevents manufacturers from meeting the escalating requirements for grid stability equipment. Since shunt reactors rely on the same specialized magnetic cores as other large inductive devices, shortages in high-grade steel compel manufacturers to ration output, resulting in extended delivery timelines that disrupt the scheduling of transmission upgrades. This inability to secure timely equipment forces utility operators to delay renewable integration projects, directly stifling market expansion.

Market data illustrates the severity of these logistical constraints. According to the National Electrical Manufacturers Association, in 2025, lead times for large power transmission equipment, including transformers and reactors, extended to between 120 and 210 weeks due to these material shortages. This prolonged waiting period creates substantial financial risk and operational uncertainty for grid investors, often causing capital committed to infrastructure modernization to remain unspent. Consequently, the market struggles to convert projected demand into actual installations, hampering the sector's overall economic momentum.

Key Market Trends

The Accelerated Adoption of Variable Shunt Reactors (VSRs) is transforming the market as grid operators increasingly seek dynamic solutions to manage the volatility associated with renewable energy sources. Unlike traditional fixed reactors that provide static compensation, VSRs allow for the continuous and precise adjustment of inductance, enabling real-time voltage stabilization during the rapid load fluctuations typical of wind and solar generation. This capability significantly reduces the need for frequent circuit breaker switching, thereby extending equipment lifespan and operational efficiency. Highlighting this technological shift, according to Hitachi Energy, October 2024, in the 'Hitachi Energy develops 500 kV variable shunt reactor for wind farm in Uzbekistan' press release, the company manufactured a customized 500 kV variable shunt reactor to support a major wind project, confirming the industry's move toward flexible compensation equipment.

Concurrently, the Integration of Intelligent Monitoring and IoT Technologies is shifting asset management strategies from reactive to predictive maintenance models. Utilities are deploying embedded sensors and digital twin software to simulate reactor performance under various stress conditions, which facilitates early fault detection and optimizes maintenance schedules for aging infrastructure. This digital evolution is critical for enhancing network reliability by providing granular visibility into the health of high-voltage assets. A notable advancement in this domain occurred when, according to GE Vernova, February 2024, in the 'GE Vernova launches new portfolio of Grid Automation solutions to enhance grid resilience' announcement, the company introduced the GridBeats portfolio, which includes AI-driven Asset Performance Management tools designed to digitize substation equipment through physics-based digital twins.

Segmental Insights

The 200kV-400kV segment is currently positioning itself as the fastest-growing category within the global shunt reactor market. This rapid expansion is primarily driven by the extensive development of high-voltage transmission infrastructures required to support increasing electricity demand and grid modernization initiatives. As utilities integrate variable renewable energy sources like wind and solar into existing networks, the need for effective voltage regulation and reactive power compensation in this specific voltage range becomes critical. Furthermore, the systematic replacement of aging grid assets in mature economies accelerates the adoption of these reactors to ensure operational stability and transmission efficiency.

Regional Insights

Asia Pacific holds the leading position in the global shunt reactor market, driven by extensive investments in electrical transmission infrastructure. Rapid industrial growth and urbanization in major economies like China and India necessitate the expansion of high-voltage grids to ensure power reliability. Additionally, the increasing integration of renewable energy sources requires reactive power compensation to maintain grid stability. Large-scale modernization projects undertaken by state utilities further fuel the demand for these units. Consequently, the region remains the primary hub for market expansion as energy requirements continue to rise.

Recent Developments

• In September 2025, Hyosung Heavy Industries signed a contract valued at approximately $150 million with a major transmission network operator in the United States. Under this agreement, the company will supply 765 kV ultra-high voltage transformers and reactors, as well as circuit breakers, for a new transmission grid construction project in the southern and eastern regions of the country. This large-scale order highlights the increasing demand for high-voltage power equipment to support the expansion of the U.S. power grid, driven by the growth of data centers and the integration of renewable energy sources.
• In August 2025, Siemens Energy announced the delivery of its first shunt reactor manufactured entirely with 100% recycled copper to the German grid operator TenneT. This milestone was part of a broader strategic partnership between the two companies aimed at decarbonizing the grid infrastructure supply chain and reducing carbon emissions. The use of recycled copper in the reactor's windings represents a significant step towards a circular economy in the energy sector. This initiative aligns with the industry's growing focus on sustainability and the reduction of the environmental footprint of essential power transmission components.
• In May 2025, GE Vernova secured a significant order from the Power Grid Corporation of India Limited (POWERGRID) to supply over 70 extra high-voltage transformers and shunt reactors. The equipment, which includes 765 kV class units, will be deployed in key transmission projects across India to support the evacuation of renewable power. Manufacturing of these units is set to take place at the company's facility in Vadodara, with deliveries scheduled to commence in 2026. This contract underscores the critical role of advanced grid technology in modernizing India's transmission infrastructure and meeting its clean energy targets.
• In October 2024, Hitachi Energy manufactured a 500 kV variable shunt reactor for the Dzhankeldy 500 megawatt onshore wind farm in Uzbekistan. This project, developed by a leading power generation company, marks the first time such technology has been produced in China for the Uzbekistan market. The variable shunt reactor is designed to enhance grid stability and reliability by dynamically regulating reactive power and improving power quality management for renewable energy sources. This development supports the country's goal to increase its renewable energy capacity and integrate more wind power into its infrastructure.

Key Market Players

• Siemens AG
• Hitachi ABB Power Grids
• Hyosung Corporation
• Trench Group
• CG Power and Industrial Solutions Limited
• Mitsubishi Electric Corporation
• Fuji Electric Co.
• TBEA Co. Ltd
• Hyundai Heavy Industries Co. Ltd
• Alstom SA

By Form Factor of Product	By Form Factor	By Rated Voltage	By End-user	By Region
Oil-Immersed Reactor and Air Core Dry Reactor	Fixed Shunt Reactor and Variable Shunt Reactor	Less than 200 kV 200kV-400kV and Above 400kV	Electric Utility and Renewable Energy	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Shunt Reactor Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Shunt Reactor Market, By Form Factor of Product:

• Oil-Immersed Reactor and Air Core Dry Reactor

• Shunt Reactor Market, By Form Factor:

• Fixed Shunt Reactor and Variable Shunt Reactor

• Shunt Reactor Market, By Rated Voltage:

• Less than 200 kV
• 200kV-400kV and Above 400kV

• Shunt Reactor Market, By End-user:

• Electric Utility and Renewable Energy

• Shunt Reactor Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE