China Flexible AC Transmission System (FACTS) Market Size, Share, Trends and Forecasts 2031

Key Findings

• The China Flexible AC Transmission System (FACTS) Market is expanding rapidly due to the growing need for grid flexibility, stability, and efficiency amid increasing renewable energy integration.

• Rising deployment of STATCOM and SVC systems is driving modernization of existing substations and transmission corridors across China.

• Utilities are favoring FACTS solutions as cost-effective alternatives to new transmission lines, optimizing existing infrastructure utilization.

• The integration of energy storage with FACTS (STATCOM+BESS) is enabling voltage and frequency stabilization while providing synthetic inertia support.

• Digital twin and model-based simulation tools are enhancing system planning, predictive maintenance, and performance validation for FACTS installations.

• Regulatory mandates for grid reliability and reactive power compensation are accelerating FACTS adoption in both transmission and industrial networks.

• Modular, containerized, and brownfield-friendly FACTS designs are reducing project timelines and lowering installation complexity in China.

• Supply chain localization, cybersecurity resilience, and trained technical expertise remain critical challenges for scaling FACTS implementation.

China Flexible AC Transmission System (FACTS) Market Size and Forecast

The China Flexible AC Transmission System (FACTS) Market is projected to grow from USD 6.8 billion in 2025 to USD 11.9 billion by 2031, at a CAGR of 9.8%. Growing renewable penetration, grid congestion, and evolving reliability standards are key factors supporting market expansion. Shunt devices such as STATCOM and SVC dominate installations, offering rapid voltage control and reactive power support. Series devices like TCSC and SSSC enhance transmission capacity without the need for new corridors. Utilities in China are increasingly prioritizing FACTS deployment over new grid construction due to shorter project cycles and regulatory flexibility. Hybrid FACTS integrated with energy storage and real-time monitoring systems will define the next growth wave.

Introduction

Flexible AC Transmission Systems are advanced power electronics solutions designed to enhance controllability, stability, and utilization of AC transmission networks. FACTS technologies such as STATCOMs, SVCs, TCSCs, and UPFCs improve voltage regulation, power factor, and dynamic performance of power systems. In China, FACTS play a pivotal role in renewable integration, long-distance power transfer, and grid reliability enhancement. Utilities and grid operators are deploying FACTS for improved dynamic control, reduced transmission losses, and power quality management. As energy systems transition toward renewables, FACTS are becoming essential for grid modernization, real-time control, and improved operational flexibility.

Future Outlook

By 2031, FACTS installations in China will form the backbone of modern grid infrastructure, supporting variable renewable energy, electric vehicle integration, and digitalized transmission operations. Advanced converter topologies using SiC-based devices will reduce losses and footprint, enhancing STATCOM performance. Hybrid FACTS solutions combining reactive power control with active energy management will gain prominence. Utilities will increasingly adopt standardized, modular platforms for rapid deployment and scalability. Grid operators will rely on predictive analytics, cybersecure SCADA, and adaptive controls for proactive system stability. The long-term outlook points to FACTS evolving from auxiliary assets to central grid control elements.

China Flexible AC Transmission System (FACTS) Market Trends

• STATCOM Replacing SVC for Advanced Voltage Control
  Utilities in China are increasingly replacing legacy SVC systems with STATCOMs due to superior performance under low-voltage conditions and faster response. Multi-level converter-based STATCOMs deliver high dynamic range with low harmonic distortion, reducing filter requirements and footprint. Containerized solutions improve ease of installation in space-limited substations. Grid codes mandating rapid reactive response and fault ride-through capabilities are driving this shift. Over the next decade, hybrid SVC-STATCOM configurations will dominate retrofit projects to extend existing grid asset life while meeting modern performance standards.

• Series Compensation for Corridor Enhancement
  FACTS devices such as TCSC and SSSC are being deployed to increase power transfer capacity across existing transmission corridors in China. They effectively reduce line reactance and improve transient stability, allowing more power flow with fewer losses. Advanced protection and control systems mitigate subsynchronous resonance risks. Integration with PMU-based monitoring enables adaptive damping and real-time adjustment of compensation levels. This approach helps utilities manage load growth efficiently without building new lines, supporting sustainability and cost efficiency.

• Hybrid FACTS and BESS for Dynamic Grid Support
  The convergence of energy storage and reactive power control is reshaping grid support strategies in China. STATCOMs integrated with BESS provide both reactive and active power support, delivering synthetic inertia and fast frequency response. These hybrid systems stabilize grids with high renewable penetration by compensating for intermittency and improving frequency resilience. Shared control and transformer infrastructure optimize capex and reduce footprint. Their dual functionality positions them as future-ready solutions for renewable hubs and microgrids.

• Digital Twin and Data-Driven Operations
  Utilities are investing in digital twin models that mirror the real-time operation of FACTS assets, enabling predictive analysis, anomaly detection, and performance optimization. These virtual replicas simulate transient behavior, control interactions, and fault recovery under varying conditions. Integration with PMU data streams supports faster decision-making and maintenance planning. As asset management digitalizes, such models help extend equipment lifespan, improve efficiency, and reduce unplanned downtime.

• Compact and Modular Architectures for Rapid Deployment
  In China’s urban and industrial centers, FACTS designs are evolving toward compact, modular, and containerized configurations. Pre-engineered STATCOM modules minimize civil works and enable flexible scaling based on load growth. Brownfield upgrades leverage plug-and-play systems to retrofit existing substations with minimal outages. This modularization trend accelerates deployment schedules, simplifies logistics, and enhances maintainability. Such systems also allow faster replication across multiple grid nodes.

Market Growth Drivers

• Renewable Integration and Grid Stability Enhancement
  As renewable capacity expands in China, voltage fluctuations and low inertia challenge system stability. FACTS technologies enable real-time voltage regulation, reactive power balance, and oscillation damping. Their ability to manage weak-grid conditions ensures reliable renewable interconnections and compliance with evolving grid codes. By improving system strength, FACTS help accommodate higher renewable penetration without compromising reliability.

• Transmission Congestion and Deferred Infrastructure Expansion
  FACTS provide utilities a cost-effective alternative to transmission expansion. They increase corridor transfer capacity, improve voltage profiles, and manage line loading, thereby deferring the need for new lines. With rapid urbanization and limited right-of-way approvals, FACTS serve as agile tools for relieving congestion and optimizing existing assets. These systems shorten project timelines and deliver high returns through improved grid utilization.

• Regulatory and Policy Mandates for Reliability
  Governments and regulators in China are mandating grid modernization initiatives that include voltage control and reactive power support. Incentive-based frameworks reward utilities for achieving reliability and efficiency improvements. Compliance with international standards such as IEC 61000 and IEEE 519 for harmonics further drives FACTS installations. Regulatory clarity and favorable cost-recovery mechanisms continue to catalyze adoption.

• Digitalization and Condition Monitoring
  FACTS systems are increasingly equipped with IoT sensors, digital control platforms, and predictive maintenance tools. Real-time health monitoring of key components like valves, reactors, and transformers enhances reliability. Predictive diagnostics minimize downtime, optimize service schedules, and improve ROI. Digitalization is making FACTS smarter, enabling utilities in China to transition toward proactive asset management.

• Industrial Electrification and Power Quality Needs
  Large industrial complexes in China, such as steel, mining, and petrochemical plants, require stable voltage and power quality. FACTS systems help mitigate flicker, harmonics, and transient disturbances, protecting equipment and ensuring uninterrupted operations. Industries seeking to improve energy efficiency and reduce penalties for poor power factor are becoming major adopters of localized FACTS solutions.

Challenges in the Market

• High Capital Cost and Project Financing
  FACTS installations entail significant upfront costs for equipment, site works, and control systems. Access to cost-effective financing in China remains a challenge, particularly for smaller utilities. However, performance-based incentives and long-term O&M contracts are helping mitigate cost concerns. Without supportive policy frameworks, smaller operators may defer investment despite evident reliability benefits.

• Integration Complexity and System Interoperability
  FACTS integration demands coordination with existing protection, SCADA, and EMS systems. Misconfigured settings or control conflicts can lead to operational instability. Ensuring interoperability across multi-vendor environments and verifying performance through EMT/RMS studies is essential. Skilled engineering resources and robust testing are crucial to avoid costly commissioning delays.

• Supply Chain Volatility and Localization Challenges
  Key components such as power semiconductors, reactors, and transformers face fluctuating lead times. Localization mandates in China, while beneficial long-term, initially constrain supplier pools and increase qualification time. Currency volatility and raw material costs further challenge project economics. Early procurement strategies and multi-sourcing are necessary to ensure timely delivery.

• Cybersecurity Vulnerabilities in Digital Controls
  As FACTS systems integrate with utility OT networks, they become potential cyberattack vectors. Ensuring secure communication protocols, authentication layers, and real-time threat detection is vital. Compliance with emerging cybersecurity standards requires additional investment in system hardening and personnel training. Neglecting these safeguards could lead to severe operational disruptions.

• Skill Gaps and O&M Limitations
  FACTS operations require specialized expertise in power electronics, control algorithms, and diagnostics. China faces a shortage of trained personnel for commissioning and maintenance. Utilities must invest in training programs, remote monitoring partnerships, and vendor-managed service agreements to ensure continuous system performance and reliability.

China Flexible AC Transmission System (FACTS) Market Segmentation

By Technology

• Static Var Compensator (SVC)

• Static Synchronous Compensator (STATCOM)

• Thyristor-Controlled Series Capacitor (TCSC)

• Static Synchronous Series Compensator (SSSC)

• Unified Power Flow Controller (UPFC)

• Fixed Series Compensation (FSC)

By Voltage Class

• Sub-Transmission (69–132 kV)

• Transmission (220–400 kV)

• Extra/Ultra-High Voltage (500 kV and above)

By Application

• Voltage Support & Power-Factor Correction

• Transfer Capacity Increase & Congestion Relief

• Renewables Integration & Weak-Grid Support

• Power Quality (Harmonics, Flicker)

• Oscillation Damping & Stability Enhancement

By End User

• Transmission System Operators (TSOs)

• Distribution Utilities

• Independent Power Producers (IPPs) & Renewable Developers

• Large Industrial & Mining

By Deployment Model

• Greenfield Substation Installations

• Brownfield Retrofits/Upgrades

• Mobile/Containerized Solutions

Leading Key Players

• Hitachi Energy (ABB legacy)

• Siemens Energy

• GE Vernova Grid Solutions

• Mitsubishi Electric

• Toshiba Energy Systems

• NR Electric

• Hyosung Heavy Industries

• Bharat Heavy Electricals Limited (BHEL)

• American Superconductor (AMSC)

• RXHK (Rongxin)

Recent Developments

• Hitachi Energy deployed a high-capacity STATCOM project in China to support renewable interconnection stability and reduce curtailment.

• Siemens Energy upgraded hybrid SVC-STATCOM systems in China, improving low-voltage performance and harmonic mitigation at key substations.

• GE Vernova delivered TCSC equipment in China to enhance corridor transmission capacity and grid damping performance.

• Mitsubishi Electric launched a modular STATCOM platform in China, reducing commissioning time through containerized assembly.

• NR Electric implemented integrated FACTS and protection systems in China for enhanced oscillation damping and fault recovery.

This Market Report Will Answer the Following Questions

1. What is the projected market size and CAGR of the China Flexible AC Transmission System (FACTS) Market by 2031?

2. Which FACTS technologies—STATCOM, SVC, TCSC, SSSC, UPFC—will dominate applications in China?

3. How are hybrid FACTS+BESS and digital twins transforming grid stability strategies?

4. What integration, cost, and cybersecurity challenges constrain market expansion?

5. Which vendors and localization frameworks best align with grid modernization initiatives in China?