As a leading power engineering firm specializing in power quality studies for heavy industrial clients, Elliot Engineering has observed a significant increase in inquiries over the past two years, starting around mid-2023. This trend reflects the evolving challenges in the industrial sector, driven by technological advancements, rising electricity demand, and the integration of renewable energy sources. Poor power quality, encompassing issues like voltage sags, harmonics, and interruptions, can lead to equipment shutdowns, production losses, and increased maintenance costs. In this report, we examine the primary drivers behind this surge in demand, drawing on recent market trends and industry insights, and outline our strategy for addressing these critical issues.
Key Drivers of Increased Power Quality Issues
The surge in power quality inquiries from heavy industrial clients is a multifaceted issue, driven by several interconnected factors. Below, we detail the primary reasons, supported by evidence from industry reports and market analyses.
1. Rising Electricity Demand
Global electricity consumption has seen substantial growth, with the International Energy Agency reporting a 4.3% increase in 2024 and forecasting a 4% annual average growth through 2027 (Rosatom Newsletter). This surge is driven by industrial development, the proliferation of data centers, and the electrification of various sectors, including transportation and manufacturing. In the U.S., Deloitte Insights notes a 1.8% increase in year-to-date electricity demand in 2024, fueled by AI-driven data centers, semiconductor production, and industrial reshoring (Deloitte Insights). Higher demand strains aging grid infrastructure, resulting in more frequent power quality issues, such as voltage sags, swells, and interruptions.
| Region/Country | Growth Rate (2024) | Key Drivers |
|---|---|---|
| Global | 4.3% | Industrial development, data centers |
| USA | 1.8% | Data centers, manufacturing reshoring |
| China | 6% (annual average) | Manufacturing, EVs, data centers |
| European Union | 1.4% increase | Data centers, heat pumps, EVs |
This increased load on power systems exacerbates power quality challenges, as grids struggle to maintain stable voltage and frequency, directly impacting industrial clients.
2. Integration of Renewable Energy
The rapid adoption of renewable energy sources, such as solar and wind, to meet sustainability goals has introduced challenges to grid stability. These sources are intermittent, and their reliance on inverters can cause voltage fluctuations and harmonics. Future Market Insights highlights that the integration of variable renewable energy resources raises demand for power quality devices to manage grid stability (Future Market Insights). This trend, which accelerated around 2022–2023, has impacted industrial clients as utilities rush to meet renewable energy portfolio standards. For example, China’s renewable energy projects, which contribute 1,000 GW from solar and wind sources, have necessitated advanced power quality solutions, such as harmonic filters and voltage regulators.
3. Industrial Automation and Equipment Sensitivity
The adoption of Industry 4.0 technologies and automation has transformed heavy industrial operations, resulting in a significant increase in the use of sensitive electronic equipment, such as programmable logic controllers (PLCs), variable speed drives (VSDs), and automated control systems. These devices are highly susceptible to power quality disturbances, such as voltage sags, harmonics, and transients, which can cause unexpected resets, malfunctions, or shutdowns. Future Market Insights notes that the need for stable and clean power to protect sophisticated machinery, such as that used in Tesla’s Gigafactories, has heightened the demand for power quality solutions (Future Market Insights). This trend, driven by modernization efforts following 2023, has made industrial systems more susceptible to power quality issues.
4. Data Center Expansion
The rise of cloud computing, big data analytics, and AI has led to a boom in data centers, which require uninterrupted and high-quality power to prevent costly downtime. Deloitte estimates that data centers will drive approximately 44 GW of additional demand by 2030, outpacing current supply (Deloitte Insights). The increasing presence of data centers, particularly in the U.S. and Europe, adds pressure on industrial power systems, as their high power demands and sensitivity to interruptions amplify the need for power quality studies. Future Market Insights reports that data centers, such as Microsoft Azure and Google Cloud, utilize unique UPS systems to ensure power quality (Future Market Insights).
5. Smart Grids and Smart Meters
The development of smart grids and smart meters, such as PG&E’s system in the U.S. and Enel’s in Italy, enables real-time monitoring and control, improving grid management. However, this also increases the complexity of power quality management, as these systems must handle fluctuations and integrate variable renewable energy sources. Future Market Insights notes that while these technologies enhance monitoring, they also raise the demand for power quality equipment to manage the resulting complexities (Future Market Insights).
6. Microgrids and Decentralized Systems
The emergence of microgrids, which are decentralized energy systems, has increased the need for power quality equipment to ensure stable operations. Examples include S&C Electric’s PureWave UPS, GE’s Digital Energy Microgrid Solutions, and Tesla’s Powerwall/Powerpack. Future Market Insights highlights that microgrids, while offering flexibility, require additional power quality solutions to manage stability, contributing to the trend of increased inquiries (Future Market Insights).
7. Infrastructure Expansion in Developing Countries
Rapid industrialization and urban development in developing countries, particularly India, have created a high demand for power quality solutions. Future Market Insights projects a 5.6% CAGR for India’s market, reaching USD 5.8 billion by 2034, driven by projects such as Sanand Semiconductor (2025) and Hubli Dharwad EV factory (2024) (Future Market Insights). Voltage fluctuations, outages, and load imbalances are common due to inadequate infrastructure, exacerbating power quality issues for industrial clients. India’s National Smart Grid Mission and Power for All initiatives further underscore the focus on power quality.
8. Large-Scale Renewable Energy Projects
The global expansion of renewable energy, such as China’s 1,000 GW from solar and wind sources, has increased the demand for harmonic filters, voltage regulators, and energy management systems to maintain grid stability. Future Market Insights notes that large-scale projects, such as Lijiaxia Hydropower and Kela Solar, increase the demand for power quality solutions to address grid stability challenges (Future Market Insights).
Market Trends and Economic Context
The growing market for power quality equipment underscores the recognized need to address these issues. Mordor Intelligence projects the market to reach USD 25.81 billion by 2030, growing at a CAGR of 7.4% (Mordor Intelligence). Similarly, Future Market Insights anticipates a CAGR of 6.25% from 2023 to 2033, surpassing USD 69.65 billion by 2033 (Future Market Insights). This growth is driven by the detrimental impact of poor power quality on industrial processes, including equipment failure, downtime, product quality issues, and clean-up costs.
| Market Projection | 2024/2025 Value | 2030/2033 Value | CAGR |
| Mordor Intelligence | USD 18.06 billion (2025) | USD 25.81 billion (2030) | 7.4% |
| Future Market Insights | USD 41.1 billion (2024) | USD 69.65 billion (2033) | 6.25% |
The economic impact of power quality issues is significant, with the Electric Power Research Institute (EPRI) estimating annual costs to U.S. industrial sectors at USD 145–230 billion. A one-second outage is estimated to cost USD 1,477 for industrial and digital economy firms (Ubicquia).
Timing and Post-Pandemic Recovery
The trend of increased power quality issues began around mid-2023, aligning with the post-pandemic industrial recovery. As industries rebounded from COVID-19 disruptions, electricity demand surged, straining aging grids and highlighting existing vulnerabilities. The accelerated integration of renewable energy sources, supply chain upgrades for advanced equipment, and rising energy costs have made power quality a financial priority, prompting more inquiries for studies and solutions. This timing also coincides with the rapid adoption of Industry 4.0 technologies and the expansion of data centers, further exacerbating power quality challenges.
Recommendations for Addressing Client Inquiries
To meet the growing demand for power quality studies, our firm employs several strategies to support our heavy industrial clients:
- Comprehensive Power Quality Studies: We utilize advanced tools like the Dranetz HDPQ or Fluke 1777 to monitor and diagnose issues such as harmonics, sags, and unbalance. Our approach involves starting at the affected load and working upstream to identify the source of disturbances, ensuring accurate and actionable insights.
- Mitigation Solutions: We recommend tailored solutions, including active filters, static var generators, and uninterruptible power supplies (UPS), to address harmonics, reactive power, and voltage variations. These solutions help reduce downtime and equipment damage, improving operational reliability. Capacitor banks, with a 13.1% market share in 2024, are particularly effective for voltage regulation and power factor correction (Future Market Insights). If power quality issues are more isolated to a machine in a process, then less expensive machine-level solutions may be appropriate, such as isolation transformers or changing transformer taps.
- Client Education: We emphasize the economic benefits of addressing power quality issues, such as reduced downtime (costing thousands per incident) and maintenance costs, to justify investments in mitigation equipment. By presenting clear cost-benefit analyses, we help clients make informed decisions.
- Utility Collaboration: We work closely with utilities to address grid-side issues, such as voltage regulation and harmonic contributions from renewable sources. This collaborative approach ensures comprehensive solutions that improve overall power quality for our clients.
Conclusion
The increased demand for power quality studies in industrial settings is driven by a complex interplay of factors, including rising electricity demand, the integration of renewable energy, industrial automation, data center expansion, smart grid development, microgrid adoption, infrastructure expansion in developing countries, and large-scale renewable energy projects. These challenges, which became more pronounced around mid-2023, reflect the evolving needs of the industrial sector in a rapidly changing energy landscape. At Elliot Engineering, we are committed to helping our clients navigate these challenges by providing expert analysis, innovative solutions, and strategic partnerships. As the industrial landscape continues to evolve, maintaining high power quality will be essential for ensuring operational efficiency, reliability, and competitiveness.