Japan Surge Arrester Market Assessment, By Type [Secondary Arresters, Distribution Arresters, Intermediate Arresters, Station Class Arresters, Others], By Voltage Range [Low, Medium, High], By Application [Substation, Transmission, Others], By End-user [U

Japan Surge Arrester Market Assessment, By Type [Secondary Arresters, Distribution Arresters, Intermediate Arresters, Station Class Arresters, Others], By Voltage Range [Low, Medium, High], By Application [Substation, Transmission, Others], By End-user [Utilities, Railways, Industrial and Commercial, Residential], By Region, Opportunities and Forecast, FY2018-FY2032F

Japan surge arrester market is projected to witness a CAGR of 3.85% during the forecast period FY2025- FY2032F, growing from USD 278.35 million in FY2024 to USD 376.57 million in FY2032. Several factors engage in the substantial growth of surge arresters such as renewable energy integration, smart grid developments, technological advancements, T&D network expansions, regulatory support, and regional investments.

In Japan, the demand for electricity is on the rise, driven by population growth and industrialization. As power loads increase on grids, the need for effective surge protection becomes critical to prevent equipment damage from transient voltage spikes, driving the demand for surge arrester equipment in the market. The utilities sector is looking to modernize infrastructure to meet growing electricity demands, contributing to the upliftment of surge arresters market size in the forecast period. In addition, the country is looking for significant investments in upgrading and expanding transmission and distribution (T&D) networks, which foster the surge arresters market share.

Furthermore, surge arresters are vital for protecting the advanced systems which leads to increased demand from the utilities sector. Surge arresters ensure grid stability and resilience as more renewable energy projects come online. The shift towards the integration of renewable energy sources in the existing grid necessitates robust surge protection solutions to manage the variability and potential surges associated with the integration of various sources of energy. The deployment of smart grid technologies increases the complexity of electrical networks, which will drive the demand for protection equipment in different applications.

For instance, in August 2024, Tokyo Electric Power Co. expected to invest around USD 3.2 billion in the power grid to meet AI demand. As in the coming years, Japanese utilities are preparing themselves for a rise in demand for data centers and chipmaking plants in the country. The rise in industrialization and investment in the expansion of electric grids drive the demand for surge arresters in the market.

Growing Focus on Reducing the Vulnerability of Power Infrastructure to Natural Disasters is Driving Market Growth

In Japan, natural disasters are becoming more frequent, leading to a higher risk of electrical surges during extreme weather events. These disasters can cause substantial economic losses and damage to power infrastructure, which in turn leads to fluctuations in power supply and grid stability.

Given Japan's vulnerability to natural disasters, the residential sector is emphasizing the construction of energy-resilient infrastructure. Surge arresters are integral components of resilient electrical systems that can withstand natural disasters without considerable damage. The residential sector is looking to invest in protective equipment that is a cost-effective solution compared to the potential financial losses associated with equipment damage during natural disasters. By protecting substations, transformers, and distribution panels, surge arresters help ensure the reliability of electrical infrastructure during and after such events.

Surge arresters assist in safeguarding electrical appliances from voltage spikes that may occur during natural disasters, ensuring continuity of service and reducing recovery time after such events. They are essential for protecting electrical infrastructure from the damaging effects of natural disasters, which drives their demand in the market.

For instance, Japan has experienced quite a few extreme natural disasters which have an enormous impact on society. Typhoons and torrential rains have damaged power generation facilities and knocked over pylons and utility poles which leads to instability in the grid systems. Maintaining proper stability during and after disasters drives the demand for surge arresters in the market.

Growth in Industrialization and Smart City Development Elevate Market Size

The country’s ongoing industrialization necessitates substantial investments in electrical infrastructure, including transmission and distribution networks for maintaining proper power supply. In addition, the growth of industrial activities leads to higher energy consumption, which requires robust electrical systems equipped with surge arresters to prevent damage from transient overvoltage. Thus, to safeguard equipment from voltage surges, the demand for reliable surge protection devices is rising in the country.

Furthermore, the development of smart cities involves integrating advanced technologies and renewable energy sources into existing infrastructure. Smart grids are deployed with surge arresters for this purpose. Moreover, advanced surge arresters are designed for smart grid applications that can manage complex electrical loads and provide real-time monitoring capabilities, aligning with the technological demands of modern urban infrastructure.

In addition, the Japanese government of different states supports investments in smart city initiatives and industrial development through favorable regulations and funding programs. Smart city projects prioritize electrical safety and reliability, driving the need for surge arresters to protect sensitive electronic devices and infrastructure from power surges. Surge arresters are critical components in the systems as equipment, ensuring stability and reliability while managing complex electrical loads that drive its market demand.

For example, the Japanese government has allocated substantial funds, around USD 155 billion, to promote investments in emerging grid technologies and energy-efficient initiatives. This investment will create a significant demand for surge arresters as critical components in smart grid systems in the coming years.

For instance, in September 2024, Japan extended a concessional loan of around USD 55 million to support the second phase of Phnom Penh’s power transmission and distribution system expansion. The loan marks the third funding package to enhance the city’s electricity infrastructure, with plans to build substations and transmission lines, which drive the demand for surge arresters in the market.

Regulatory Support Creates Opportunities for Market Growth

The Japanese governments and regulatory bodies are implementing stricter safety standards that require the installation of surge protection devices in new electrical infrastructure projects. The regulatory frameworks aim to improve power quality and grid stability, which further encourages the adoption of surge arresters. The government has established stringent safety standards and regulations that mandate using surge protection devices in various applications, particularly in the utility sector.

Moreover, the devices help mitigate voltage spikes and ensure the electrical equipment operates within safe limits and meets regulatory compliance. The utility sector and companies seek to adhere to safety guidelines and compliance, boosting demand for surge arresters. The upcoming regulations drive utilities and industries to invest in surge arresters to ensure safety and reliability in their electrical systems. This opens the opportunity for a surge in the arrester market in the forecast period.

For instance, the Ministry of Economy, Trade and Industry has inaugurated a “Public-Private Council on Smart Industrial Safety” to encourage the public and private sectors to collaborate and strongly promote a smart industrial safety system among Japanese industries, which drives the demand for efficient electric systems and equipment.

Distribution Surge Arrester Expected to Dominate Japan in Forecast Period

The distribution surge arrester has a high adoption rate which makes the segment dominate the market. Distribution surge arresters play a crucial role in strengthening electrical infrastructure and ensuring the smooth operation of power integration. Furthermore, with the rise in the complexity of electrical infrastructure, the utility sector is adopting distribution surge arresters to enhance reliability and efficiency.

Distribution surge arresters mitigate the impact of transient over-voltage, help to prevent outages, and minimize disruptions of power supply in different applications. Distributed surge arresters contribute to maintaining a stable voltage profile within the utility sector, improving overall operational efficiency and reducing energy losses. In addition, the cost of installing surge arresters is much lower than the costs associated with repairing or replacing damaged equipment due to surges which drive the demand for the distribution surge arrester in the market.

South Region is Expected to be the Fastest Growing Region

The South region is expected to be the fastest-growing region during the forecast period. The region aims to diversify the energy mix, emphasizing renewable power as a sustainable solution. Different energy sources are incorporated into the single grid, which leads to voltage fluctuations and variabilities. The surge arresters help stabilize the grid by protecting against surges associated with power fluctuations. The higher authority’s emphasis on the integration of renewable energy sources in the electric grid creates opportunities for surge arresters in the region. Moreover, the Japanese government supports the adoption of highly efficient protection equipment in the commercial sector, which will foster the demand for surge arrest growth in the coming years.

Furthermore, the expansion of transmission and distribution (T&D) networks in southern Japan to meet growing energy demand creates a strong demand for surge arrester technologies, which help maintain grid stability. Surge arresters are becoming well-suited protection equipment for several projects, helping utility companies manage the power flow that drives demand in the region.

Future Market Scenario (FY2025 – FY2032F)

Japan is expected to implement policies that drive the adoption of high-efficiency protection technologies in different end users which fosters the demand for surge arresters in coming years.

Japan aims to increase the share of renewable energy to 36-38% of its energy mix by 2030, which will boost the demand for a surge arrester market in the coming years.

Continuous research and development (R&D) in surge arrester technology will drive improvements in protection efficiency and durability which drive the equipment demand in several projects.

Key Players Landscape and Outlook

Continuous innovation characterizes the surge arrester landscape in Japan, where companies compete on energy efficiency, product lifespan, and unique features. The market outlook remains positive, owing to increased demand for the integration of renewable energy. Surge arrester players are concerned with supply chain resilience, energy efficiency, and environmental practices, which will define the industry's future. Product launches, agreements, business expansions, collaborations, and developing technologies are projected to increase competition in the fast-paced market.

For instance, in October 2024, Mitsubishi Electric Corporation will be investing around USD 110 million to strengthen its energy system production equipment capabilities both in Japan and overseas. The company will invest in the Transmission & Distribution Systems Center to improve its productivity of switchgear and other key components. This development will increase the production of several components which are used in the electric grid.