Flexible AC Transmission System Market

Global Flexible AC Transmission System Market is poised to witness substantial growth, reaching a value of USD 2.93 Billion by the year 2033, up from USD 1.56 Billion attained in 2024. The market is anticipated to display a Compound Annual Growth Rate (CAGR) of 7.26% between 2025 and 2033.

Flexible AC Transmission System Market Size and Forecast 2025 to 2033

The Flexible AC Transmission System (FACTS) refers to a collection of technologies designed to enhance the performance, reliability, and stability of power grids. FACTS devices are used to regulate the flow of electricity through transmission lines by improving the controllability of the system. These systems enable voltage support, power flow control, and reactive power compensation. FACTS solutions are critical in managing power system stability in the face of rising demand, intermittent renewable energy sources, and the need for efficient long-distance electricity transmission. The growing importance of renewable energy integration, along with the demand for high-quality, uninterrupted electricity, is propelling the adoption of FACTS devices across the globe.

Several factors are fueling the growth of the Flexible AC Transmission System market. Increasing electricity demand driven by industrialization, urbanization, and population growth has created a pressing need for efficient power transmission systems. FACTS devices help optimize existing infrastructure, allowing utilities to meet these demands without extensive new grid investments. Additionally, the rise in renewable energy generation, such as wind and solar power, is creating an opportunity for FACTS systems to stabilize grid fluctuations caused by the intermittency of these sources.

The shift toward smart grids and the need for grid modernization are also contributing to the increasing adoption of FACTS technologies. According to the International Energy Agency, investments in grid modernization and energy storage are expected to grow significantly in the coming years, further boosting the demand for FACTS solutions.

Market Dynamics

Flexible AC Transmission System Market Drivers

• Rising Demand for Electricity: The growing global demand for electricity, fueled by rapid urbanization and industrial expansion, is a primary driver for the Flexible AC Transmission System market. As populations increase, more households and businesses require reliable power. According to the International Energy Agency (IEA), global electricity demand is expected to increase by 2.1% annually between 2021 and 2040. This surge in demand puts pressure on existing transmission networks, making FACTS solutions crucial for enhancing system efficiency and reducing the need for expensive infrastructure expansion.
• Integration of Renewable Energy Sources: The global transition towards renewable energy sources, such as solar and wind, is another significant driver of the FACTS market. These renewable sources are often intermittent, causing fluctuations in the grid that can lead to instability. The International Renewable Energy Agency (IRENA) projects that renewable energy will account for nearly 90% of the world’s power capacity expansion by 2050. FACTS devices offer dynamic control of power flow, helping to integrate these variable energy sources into the grid more effectively.
• Grid Modernization and Smart Grids: The push towards modernizing electrical grids to accommodate new technologies and improve reliability is driving the adoption of FACTS systems. The U.S. Department of Energy's Smart Grid Investment Grant Program reports that smart grid technologies have increased grid efficiency by up to 25%. As part of grid modernization, FACTS technologies are employed to enhance grid stability, manage congestion, and facilitate better demand-side management, contributing to improved overall system performance and resilience.
• Need for Transmission Network Upgrades: As electrical transmission networks age, they become increasingly prone to inefficiencies and failures. Upgrading these networks to handle the rising energy demands requires advanced solutions like FACTS. The U.S. Department of Energy has highlighted that the U.S. transmission infrastructure is in urgent need of upgrades to meet future energy needs. FACTS devices help optimize existing transmission lines, improving the efficiency and capacity of the grid without the need for large-scale physical expansion.
• Support for Power Flow Control in High-Demand Regions: FACTS systems play a critical role in balancing power supply and demand, particularly in regions experiencing high electricity consumption. The European Network of Transmission System Operators for Electricity (ENTSO-E) estimates that power consumption in Europe will grow by 20% by 2040. In such regions, FACTS technologies enable the efficient redistribution of power across congested transmission lines, improving system stability and reducing the risk of blackouts. This is increasingly important as industrialization and electrification of transport continue to rise.

Flexible AC Transmission System Market Opportunities

• Expansion in Emerging Markets: The growing energy needs in emerging markets present a significant opportunity for the FACTS market. Countries in Asia, Africa, and Latin America are experiencing rapid urbanization and industrialization, resulting in increased electricity demand. According to the International Energy Agency (IEA), emerging economies in Asia are expected to account for around 60% of global energy demand by 2040. This surge in demand creates the need for enhanced transmission infrastructure, positioning FACTS as an ideal solution to optimize existing networks and reduce system losses. Governments in these regions are investing heavily in power grid upgrades, opening a substantial market for FACTS technologies.
• Development of High-Voltage Direct Current (HVDC) Systems: The growing demand for HVDC systems, which provide efficient long-distance power transmission, is creating new opportunities for FACTS integration. The IEA reports that HVDC technology is crucial for connecting remote renewable energy sources with urban demand centers, particularly in Europe and Asia. As countries increase investments in HVDC networks, FACTS systems will be needed to manage the grid’s stability and voltage levels. The rise in HVDC projects—estimated to reach 80 gigawatts globally by 2030—represents a significant opportunity for FACTS systems to optimize the performance of these systems.
• Government Initiatives and Policies: Government policies aimed at grid modernization and renewable energy integration are fostering opportunities for FACTS. The U.S. Department of Energy's Grid Modernization Initiative emphasizes upgrading aging transmission infrastructure and integrating more renewable energy. Similarly, the European Union's Clean Energy for All Europeans package promotes a smarter, more flexible energy system. These governmental pushes for sustainable, resilient, and smart grids are creating a favorable environment for the growth of FACTS systems as part of grid improvement initiatives. Increased government funding and policy support are vital drivers that enable the adoption of FACTS solutions worldwide.
• Technological Advancements in FACTS Devices: Advancements in FACTS technology, such as improved power electronics and better control systems, present a promising opportunity. The U.S. Department of Energy has highlighted that advancements in semiconductor technologies and digital control systems are increasing the efficiency and reducing the cost of FACTS devices. With these technological improvements, FACTS systems can offer better performance with lower capital expenditures, making them more accessible to utilities and independent operators. As these technologies evolve, they are expected to drive increased adoption across both developed and developing markets.
• Rising Focus on Smart Cities: The growth of smart cities is an emerging opportunity for FACTS systems. As urban areas embrace technology-driven solutions to optimize infrastructure and reduce energy consumption, FACTS systems will be integral in supporting these smart grids. According to the Smart Cities Council, the global smart cities market is projected to reach $2.57 trillion by 2025. FACTS solutions are key to enhancing the efficiency of these grids, ensuring uninterrupted power supply, and facilitating the integration of renewable energy sources. As smart cities continue to evolve, FACTS technologies will play a crucial role in meeting their energy needs efficiently.

Flexible AC Transmission System Market Restrain & Challenges

• High Initial Investment Costs: One of the primary challenges hindering the widespread adoption of Flexible AC Transmission Systems (FACTS) is the high initial investment required. The deployment of FACTS devices involves substantial capital expenditure on infrastructure, which can be a significant burden for utilities, especially in developing countries. According to the U.S. Department of Energy, modernizing grid infrastructure, including the integration of FACTS technologies, requires significant upfront costs, which can deter investment in the short term. This financial barrier is especially challenging for regions with limited access to funding or government incentives, slowing down the market’s growth.
• Lack of Skilled Workforce: The deployment and maintenance of FACTS devices require specialized skills, which are in short supply in many regions. The complexity of FACTS technologies demands highly trained engineers and technicians for installation, calibration, and ongoing maintenance. The International Energy Agency (IEA) reports that the renewable energy sector faces a similar shortage of skilled workers, particularly in developing nations. This skills gap can delay the adoption of FACTS systems as utilities struggle to find qualified personnel, hindering the timely execution of projects and increasing operational costs.
• Technological Complexity and Integration Challenges: The integration of FACTS devices into existing power grids can be a complex process due to the varying operational requirements of different systems. Each transmission network has unique characteristics, making it challenging to ensure seamless compatibility between FACTS devices and legacy infrastructure. The International Renewable Energy Agency (IRENA) notes that grid modernization efforts often face difficulties in terms of interoperability and integration, which can delay the deployment of advanced technologies. These technical challenges, including potential disruptions during installation and testing, can slow down the widespread adoption of FACTS solutions.

Current Trends in the Flexible AC Transmission System Market

• Integration of Power Electronics: The integration of advanced power electronics is one of the key trends driving the development of FACTS technologies. Modern power electronic components allow for more efficient and precise control of power flow and voltage regulation within the transmission network. The U.S. Department of Energy has emphasized that innovations in semiconductor materials and devices have drastically improved the performance and cost-effectiveness of FACTS systems. These advancements enhance the response time and reduce energy losses, making the overall system more reliable and efficient. Power electronics are now enabling the scaling of FACTS devices for use in a broader range of applications, from large-scale transmission grids to smaller, decentralized networks, driving wider adoption.
• Development of Digital Control Systems: The development of digital control systems for FACTS devices has revolutionized their operation and efficiency. These systems enable real-time monitoring and control of power systems, improving their responsiveness to changing grid conditions. According to the International Energy Agency (IEA), digital control technologies are increasingly being integrated into power transmission infrastructure, enhancing the accuracy and speed of data processing and decision-making. These advancements allow grid operators to make more informed, dynamic adjustments to power flows, minimizing disruptions and improving stability. Digital control systems also make it easier to integrate renewable energy sources by providing more flexible control mechanisms, ensuring a smoother transition from conventional power generation to renewable-based grids.
• Growth of Modular FACTS Solutions: There is a growing trend towards modular FACTS solutions that offer greater scalability and flexibility in grid management. These solutions allow utilities to expand their systems gradually, without the need for large-scale, one-time investments. According to the U.S. Department of Energy, modular designs are particularly advantageous in regions with rapidly changing energy demands or where the grid infrastructure is being upgraded incrementally. Modular FACTS systems can be easily integrated into existing transmission networks, reducing the cost and complexity of implementation. This trend also allows for faster deployment, enabling grid operators to address issues like congestion and voltage instability in a more cost-effective and timely manner.
• Increased Adoption of Hybrid FACTS Devices: Hybrid FACTS devices, which combine traditional FACTS technologies with energy storage and renewable energy integration, are gaining traction. These hybrid solutions offer enhanced capabilities, such as better load balancing and dynamic voltage control, while supporting the integration of renewable energy sources. The International Renewable Energy Agency (IRENA) predicts that hybrid solutions will play a significant role in grid modernization efforts, particularly as the share of renewable energy in the global power mix continues to rise. Hybrid systems are capable of addressing both short-term fluctuations and long-term challenges, making them increasingly essential for ensuring grid stability in the face of variable renewable energy output.
• Adoption of AI and Machine Learning for Grid Optimization: Artificial intelligence (AI) and machine learning (ML) are being integrated into FACTS devices to enhance grid optimization and predictive maintenance. These technologies enable predictive analytics to anticipate power flow disruptions and identify potential issues before they occur. The U.S. Department of Energy has recognized the growing role of AI and ML in modern grid management, as these technologies can optimize energy distribution, improve efficiency, and reduce operational costs. By analyzing large datasets in real-time, AI-driven FACTS systems can automatically adjust grid parameters to prevent failures and improve overall system resilience, making them particularly valuable in the management of complex and diverse energy network.

Segmentation Insights​​​​​​​​​​​​​​

Flexible AC Transmission System market Analysis, By Devices

By devices, the market is divided into Static Synchronous Compensator (STATCOM), Static Var Compensator (SVC), Unified Power Flow Controllers (UPFC), Thyristor Controlled Series Compensator (TCSC), and other devices.

• The Static Var Compensator (SVC) holds a significant share of the global Flexible AC Transmission System market due to its ability to provide dynamic voltage support and enhance power quality in transmission systems. The U.S. Department of Energy notes that SVC devices are widely used to stabilize power flow and prevent voltage fluctuations in large-scale grids, particularly where renewable energy sources are integrated. This technology is crucial for ensuring system stability, reducing transmission losses, and maintaining voltage levels across extensive grids. The increasing need for reliable grid operation, especially in regions with high renewable energy penetration, contributes to SVC’s leading position in the market.
• The Thyristor Controlled Series Compensator (TCSC) is the fastest-growing segment within the FACTS market due to its capability to enhance power transmission and improve stability by controlling series impedance. The International Energy Agency (IEA) highlights that TCSC systems are gaining adoption in long-distance transmission systems to optimize power flow and reduce congestion. As the global transmission grid infrastructure modernizes and demand for flexible, high-capacity systems grows, TCSC is increasingly being used to prevent transmission line overloads and enhance grid efficiency. The rising shift towards smart grid technology and the integration of renewables is accelerating TCSC adoption, as they offer critical support in managing power flow.

Flexible AC Transmission System market Analysis, By Controllers

By Controllers Type, the market is categorized into Shunt Controllers, Series Controllers, and Combined Controllers.

• Shunt Controllers dominate the market due to their ability to provide reactive power compensation, which stabilizes voltage levels across transmission networks. These controllers are widely used in areas with significant variations in voltage, as they maintain grid reliability by compensating for the reactive power demand. The U.S. Department of Energy reports that shunt controllers are critical for enhancing the performance of electrical grids, particularly in power transmission systems involving renewable energy sources, where voltage instability is common. Their role in voltage regulation and grid stability makes them the leading segment in the FACTS market.
• Combined Controllers are the fastest-growing segment in the FACTS market due to their versatile capabilities in both shunt and series compensation, which enhances overall system stability and efficiency. According to the International Energy Agency (IEA), combined controllers are gaining traction in modernizing grids, as they can simultaneously control both reactive power and power flow, making them ideal for large, complex grid networks. As grid operators look for more efficient and flexible solutions to integrate renewable energy, the demand for combined controllers is increasing rapidly, positioning them as a critical component in next-generation transmission systems.

Flexible AC Transmission System market Analysis, By Functionality

By Functionality Type, the market is categorized into Voltage Control, Network Stabilization, Transmission Capacity, and Harmonic Suppression.

• Voltage control is the largest segment in the FACTS market, primarily due to maintaining stable voltage is crucial for grid reliability. Voltage instability can lead to power outages or damage to equipment, which increases operational costs. According to the U.S. Department of Energy, voltage control is essential in regions with high renewable energy penetration, where fluctuations in generation require advanced voltage regulation mechanisms. FACTS devices that manage voltage ensure uninterrupted power supply, reducing transmission losses and improving overall system efficiency. As global energy grids transition toward cleaner sources, the demand for effective voltage control systems continues to rise.
• The transmission capacity segment is growing rapidly due to the increasing demand for higher power transfer without compromising grid stability. The International Energy Agency (IEA) reports that with rising energy consumption and the global shift to renewable energy, transmission capacity is becoming a critical factor in modern grid infrastructure. FACTS technologies that enhance transmission capacity enable grids to handle more power without costly infrastructure upgrades. These solutions are particularly vital in developing countries, where expanding power transmission networks is a priority to meet rising demand. As global energy needs continue to surge, this segment is expected to see sustained growth.

Flexible AC Transmission System market Analysis, By Application

By Application Type, the market is categorized into Utilities, Renewables, Industrial, Railways, and Other.

• The utilities segment is the largest in the FACTS market, driven by the essential role these systems play in maintaining grid stability and reliability. FACTS devices in utilities are used for voltage control, power flow regulation, and reactive power compensation. According to the U.S. Department of Energy, utilities are increasingly adopting FACTS solutions to enhance the efficiency and capacity of transmission networks, particularly as electricity demand grows. With the expansion of smart grids and the integration of renewable energy sources, utilities rely on FACTS technologies to ensure that the grid remains stable and operates smoothly across large-scale infrastructure.
• The renewables segment is the fastest-growing due to the increasing need for grid stability in systems with high renewable energy integration. The International Renewable Energy Agency (IRENA) states that as countries transition to cleaner energy sources, FACTS systems are becoming crucial for balancing power generation and consumption, particularly in intermittent renewable sources like solar and wind. FACTS devices improve the efficiency of energy transmission and prevent fluctuations in power supply, thus facilitating the integration of renewables into the grid. This sector’s rapid growth reflects the global push towards renewable energy and decarbonizing the power sector.

Flexible AC Transmission System Market Regional Insights

The market has been geographically analysed across five regions, Europe, North America, Asia Pacific, Latin America, and the Middle East & Africa.

• The Asia-Pacific region is the largest and fastest-growing market for Flexible AC Transmission Systems (FACTS). This growth can be attributed to rapid industrialization, the expanding demand for electricity, and efforts to modernize energy infrastructures. Countries like China and India are leading the way, with China focusing on smart grid technology and renewable energy integration to improve power transmission efficiency (China National Energy Administration). India, too, is investing heavily in grid modernization to tackle transmission losses and stabilize its grid while expanding its renewable energy sector (Ministry of Power, Government of India). These countries are increasingly adopting FACTS solutions to support reliable power transmission amidst growing energy demand.
• North America is experiencing steady growth in the FACTS market due to infrastructure upgrades and the integration of renewable energy. The U.S. Department of Energy has prioritized grid modernization and energy resilience, fostering demand for FACTS to manage power distribution more effectively. Furthermore, as the U.S. moves toward a cleaner energy mix, FACTS are crucial for stabilizing grid systems and ensuring efficient transmission, especially with intermittent renewable energy sources like wind and solar. With significant investments expected to continue in grid infrastructure, North America remains a key region with promising growth for FACTS adoption in the near future.

Flexible AC Transmission System Market Competitive Overview

The Flexible AC Transmission System (FACTS) market is highly competitive, with several key players focused on technological advancements and strategic partnerships to maintain their market positions. Leading companies such as ABB Ltd., Siemens AG, General Electric, and Mitsubishi Electric Corporation dominate the market with their innovative FACTS solutions, which are essential for enhancing grid stability, power quality, and transmission efficiency. These companies are increasingly investing in research and development to introduce advanced solutions like Static Var Compensators (SVC), Thyristor-Controlled Series Compensators (TCSC), and Unified Power Flow Controllers (UPFC), which cater to diverse energy grid requirements.

In addition to technological advancements, companies are expanding their geographic reach through mergers, acquisitions, and partnerships with local firms. This enables them to capitalize on emerging markets in Asia-Pacific, Latin America, and the Middle East. Government incentives for renewable energy and smart grid technologies further intensify the competition, pushing companies to offer cost-effective, high-performance solutions. With the rising demand for efficient and flexible transmission networks, particularly in renewable energy integration, competition among market leaders remains fierce as they focus on strengthening their product portfolios and gaining a competitive edge in the rapidly evolving market.

Leading Market Players in the Flexible AC Transmission System Market

• ABB Ltd.: ABB Ltd. is a global leader in electrification and automation technologies, offering a wide range of Flexible AC Transmission System (FACTS) solutions. The company provides innovative systems such as Static Var Compensators (SVC), Thyristor-Controlled Series Compensators (TCSC), and Unified Power Flow Controllers (UPFC) to optimize power transmission and ensure grid stability. ABB's expertise in digital technologies and smart grid solutions enhances its ability to integrate renewable energy sources, making it a key player in the market. The company’s strong R&D capabilities and focus on sustainability further solidify its leadership position.
• Siemens AG: Siemens AG is a renowned player in the global FACTS market, providing state-of-the-art power transmission technologies aimed at improving grid efficiency and stability. Siemens offers a comprehensive range of solutions, including dynamic reactive power compensation and power flow control devices, crucial for integrating renewable energy and managing fluctuating loads. The company's extensive global footprint, coupled with a strong emphasis on smart grid technologies, positions Siemens as a leader in the energy sector. Siemens continues to advance its offerings through innovation and strategic partnerships, playing a pivotal role in modernizing energy infrastructures worldwide.
• General Electric (GE): General Electric (GE) is a prominent player in the Flexible AC Transmission System market, offering a wide range of grid solutions aimed at improving the efficiency and stability of power transmission systems. GE’s products include Static Var Compensators, UPFCs, and SVCs, which support grid optimization and facilitate the integration of renewable energy. GE’s expertise in advanced technologies, such as digital grids and automation, enhances the operational efficiency of its FACTS solutions. The company’s commitment to innovation and sustainability makes it a key competitor in the market, addressing the evolving needs of modern power grids.

Top Strategies Followed by Players

• Technological Innovation and Product Diversification: Many leading players in the Flexible AC Transmission System market, such as ABB Ltd. and Siemens AG, focus heavily on technological innovation to enhance the performance and efficiency of their FACTS solutions. Companies continuously develop advanced systems, such as Unified Power Flow Controllers (UPFC) and Static Var Compensators (SVC), to meet the growing demand for grid stability and renewable energy integration. For instance, Siemens has made significant strides in integrating digital grid technologies, while ABB is actively developing solutions for voltage regulation and dynamic power flow control, positioning themselves as frontrunners in the sector.
• Strategic Partnerships and Collaborations: Companies like General Electric (GE) and Mitsubishi Electric Corporation pursue strategic partnerships and collaborations with government bodies, utilities, and technology firms to strengthen their market presence. These partnerships allow for better access to emerging markets and accelerate the development of more cost-effective and efficient FACTS solutions. For instance, GE has collaborated with several utilities to implement smart grid technologies, while Mitsubishi Electric has teamed up with key stakeholders in Asia-Pacific to deploy FACTS devices, enhancing their product offerings and expanding their global footprint.
• Sustainability and Green Energy Initiatives: Key market players, including Hitachi Ltd. and Toshiba Corporation, have adopted sustainability-driven strategies in response to increasing environmental concerns. They focus on developing and promoting FACTS solutions that enable more efficient energy transmission and facilitate the integration of renewable energy sources into power grids. For instance, Hitachi has committed to delivering advanced technologies that contribute to reducing carbon emissions and improving energy efficiency. Their involvement in projects aimed at increasing renewable energy integration highlights their commitment to supporting the global transition toward greener energy systems.

List of Companies Profiled in the Report are:

• ABB Ltd.
• Adani Power Ltd.
• Alstom SA
• CG Power and Industrial Solutions Limited
• Eaton Corporation
• General Electric
• Hyosung Corporation
• Mitsubishi Electric Corporation
• NR Electric Co. Ltd.
• Siemens AG
• Toshiba Corporation
• Hitachi Ltd.
• GE Grid Solutions
• Bharat Heavy Electricals Ltd.
• American Superconductor Corporation

Global Flexible AC Transmission System Market Report: Scope

List of Segments Covered

This section of the Flexible AC Transmission System market report provides detailed data on the segments at country and regional level, thereby assisting the strategist in identifying the target demographics for the respective product or services with the upcoming opportunities.

By Devices

• Static Synchronous Compensator (STATCOM)
• Static Var Compensator (SVC)
• Unified Power Flow Controllers (UPFC)
• Thyristor Controlled Series Compensator (TCSC)
• Other Devices

By Controllers

• Shunt Controllers
• Series Controllers
• Combined Controllers

By Functionality

• Voltage Control
• Network Stabilization
• Transmission Capacity
• Harmonic Suppression

By Application

• Utilities
• Renewables
• Industrial
• Railways
• Other