2023 INDUSTRY ROUNDUP Power electronics in 2023: Increased integration and efficiency

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The power electronics industry comprises numerous materials, devices, and systems, applied across many diverse applications. Incessant evolution and expansion in user demand is met by constant innovation and new product introductions.

The power electronics industry in 2023 remains driven both by trends in consumer demand, and how manufacturers are introducing new electronic components and systems to meet these demands and opportunities. For example, electric and hybrid vehicle owners – and therefore manufacturers – seek efficiency, extended range, zero emissions, and sustainability. Many semiconductor enterprises are seeking to meet these demands by developing new fabrication facilities and cutting-edge technologies such as silicon carbide (SiC) and gallium nitride (GaN), while the paramount focus remains on optimizing efficiency .

Shaped by such interactions, the power electronics market, valued at USD 41.2 billion in 2023, is projected to reach USD 46.3 billion by 2026, according to a MarketsandMarkets ‘Power Electronics Market’ forecast . A CAGR of 4.4 % during 2023 to 2026 is expected.

These interactions also mean that the market can be segmented both by its key power electronics technologies and by the applications that use them. For insight into what’s been happening in 2023, we start by reviewing key takeaways from May’s PCIM Europe event in Nuremberg, Germany along with more details from the MarketsandMarkets forecast. Then we highlight some of the major trends and events within each of the market areas identified by this review to capture the diversity as well as the depth of power electronics technologies’ impact.

Power electronics technologies….

A market briefing at PCIM reported on several significant developments. General trends include increased integration, higher efficiency, and adoption of wide-bandgap materials such as SiC and GaN. Power modules are benefiting from advances in die attach methods, new terminal connections, and optimization of IGBT performance.

The event also reflected interest in modular multilevel converters (MMCs), which allow powerful converters used in high-voltage direct current (HVDC) transmission and medium-voltage drives to be assembled like Lego bricks.

And it’s not just about power electronics hardware. The marriage of digital twins and artificial intelligence is facilitating real-time simulations, predictive maintenance, and optimized performance, while energy harvesting, from vibrations to sunlight, is benefiting entities ranging from wearables and IoT sensors to smart cities.

As keeping power electronics cool becomes increasingly challenging, interest is growing in liquid cooling, phase-change materials, and creative heatsinks. Meanwhile, designing for recyclability, minimizing waste, and extending product lifecycles all contribute to a more sustainable, circular economy.

Each of these innovations apply to electronic power devices that can potentially be used across all power management applications. However, the event also reflected interest in a couple of vertical industries:

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….and markets

E-mobility, in terms of faster charging stations, lighter batteries, and smarter power management.

Power Electronics for Data Centers: Projections indicate that the PSU market is expected to reach USD 10.5 billion by 2028 with a CAGR of 6 % from 2022 to 2028.

Meanwhile, the MarketsandMarkets forecast comments on Renewable Power Sources: “At present several countries are shifting from electricity generation using fossil fuels like coal and gas to renewable energy sources. Power electronics play a key role in shifting electrical energy patterns to renewable energy with high energy efficiency, by converting and controlling AC and DC electrical power. Power electronics-based power converters are also used widely in renewable energy installations, primarily wind and solar energy systems, as these are the most promising renewable energy sources for electricity generation. These renewable systems include solar panels, wind turbines, fuel cells, batteries, capacitors, and other power devices. These systems can be integrated with different types of power electronics to handle varying power requirements.”

Key markets

Below, we look at three high-profile yet diverse industries, to highlight the ubiquitous importance of power electronics technology.

Electric and hybrid vehicles

Infrastructure: One of the most exciting trends now emerging for EVs relates to infrastructure as much as the vehicles themselves: V2X (Vehicle to everything) is an umbrella that covers V2H (Vehicle to home), V2G (Vehicle to grid) and possibly other V2-type acronyms. V2X considers an EV as a battery on wheels, and depends on the vehicle having a bidirectional on board charger (OBC). This allows the car battery to not only accept charge, but also act as a BESS (Battery energy storage source) for its local grid infrastructure.

In V2G mode, the battery can supply power to the grid, for example to mitigate load on the grid generators during times of peal demand. A large number of such installations could collectively help to reduce grid loading challenges. And vehicle owners could use V2H mode as a source of backup power – or they could charge the EV battery when electricity is lower cost, and draw from it during times of higher grid electricity pricing.

The Department for Energy Security and Net Zero (DESNZ) has been running a V2X Innovation programme; this included a competition, launched in March 2023, for companies to build small scale demonstrations of novel V2X energy technology, providing storage and flexible services .

Inside the vehicle: Power electronics finds multiple, and increasing, roles within the vehicle as well. As cars become more advanced, faster communication systems, advanced driver-assistance systems (ADAS) and efficient power converters are becoming steadily more important. The semiconductor market is expected to grow at a double-digit compound annual growth rate and reach USD 1 trillion by 2030, with the automotive market contributing more than 20 %.

One of the main drivers of this growth is the use of discrete devices like MOSFETs and IGBTs in power converters: inverters, DC/DC and on-board chargers (OBCs). By 2030, discrete components are expected to make up over 52 % of the total semiconductor content per vehicle, with an average cost rising from USD 301 to USD 563 per vehicle.

Discrete silicon carbide (SiC) and gallium nitride (GaN) power compound semiconductors are capable of operating at higher frequencies, voltages, and temperatures than traditional Si-based semiconductors, making them more efficient and ideal for high-performance automotive applications. SiC devices are already being adopted into electric vehicles, while GaN is still in its infancy and is expected to enter the EV market in the future.

Investing in these technologies will pave the way for innovation and open up new opportunities for the automotive sector as it moves toward electrification.

Renewable energy and battery energy storage systems

Renewable energy systems today typically use photovoltaic (PV) solar panels or wind turbines as the core energy sources. However, whichever technology is used, a battery energy storage system (BESS) also has an essential role; it bridges the time differences between when power can be generated, and when it’s required by the load.

Accordingly, we offer some insight into current and expected PV system status by looking at two key areas; some new developments in PV cell technology, and progress in lithium-ion and other battery technologies used in BESS systems.

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Solar panels breaking the 30 % energy efficiency milestone: According to a Guardian article published in July 23, solar power cells have raced past the key milestone of 30 % energy efficiency, after innovations by multiple research groups around the world. The feat makes this a “revolutionary” year, according to one expert, and could accelerate the rollout of solar power.

Today’s solar panels use silicon-based cells but are rapidly approaching their maximum conversion of sunlight to electricity of 29 %. At the same time, the installation rate of solar power needs to increase tenfold in order to tackle the climate crisis, according to scientists.

The breakthrough is adding a layer of perovskite, another semiconductor, on top of the silicon layer. This captures blue light from the visible spectrum, while the silicon captures red light, boosting the total light captured overall. With more energy absorbed per cell, the cost of solar electricity is even cheaper, and deployment can proceed faster to help keep global heating under control.

The perovskite-silicon “tandem” cells have been under research for about a decade, but recent technical improvements have now pushed them past the 30 % milestone. Experts said that if the scaling-up of production of the tandem cells proceeds smoothly, they could be commercially available within five years, about the same time silicon-only cells reach their maximum efficiency.

The current efficiency record for silicon-only solar cells is 24.5 % in commercial cells and 27 % in the laboratory. The latter may well be as close the cells can practically get to the theoretical maximum of 29 %.

But one group, led by Prof Steve Albrecht at the Helmholtz Center Berlin for Materials and Energy in Germany, has now published information about how they achieved efficiencies of up to 32.5 % for silicon-perovskite cells. Another group, led by Dr Xin Yu Chin at the Federal Institute of Technology in Lausanne, Switzerland, demonstrated an efficiency of 31.25 % and said tandem cells had the “potential for both high efficiency and low manufacturing costs”.

BESS and battery technologies: Today, the market for batteries aimed at stationary grid storage is small—about one-tenth the size of the market for EV batteries, according to Yayoi Sekine, head of energy storage at energy research firm BloombergNEF . But demand for electricity storage is growing as more renewable power is installed. Major renewable power sources like wind and solar are variable, and batteries can help store energy for when it’s needed.

Lithium-ion batteries aren’t ideal for stationary storage, even though they’re commonly used for it today. While batteries for EVs are getting smaller, lighter, and faster, the primary goal for stationary storage is to cut costs. Size and weight don’t matter as much for grid storage, which means different chemistries will likely win out.

Having said this, Lithium Iron Phosphate (LFP) offers a cheaper alternative, although with reduced energy density.

Sodium-ion batteries have lower cycle life (2,000–4,000 versus 4,000–8,000 for lithium) and lower energy density (120–160 watt-hours per kilogram versus 170–190 watt-hours per kilogram for LFP). However, sodium-ion has the potential to be less costly—up to 20 percent cheaper than LFP, according to a McKinsey & Company analysis —and the technology continues to improve, especially as manufacturing reaches scale. Another advantage is safety: sodium batteries are less prone to thermal runaway. There’s also a sustainability case for sodium-ion batteries because the environmental impact of mining lithium is high.

One rising star in stationary storage is iron, and two players could see progress in the coming year. Form Energy is developing an iron-air battery that uses a water-based electrolyte and basically stores energy using reversible rusting. The company recently announced a USD 760 million manufacturing facility in Weirton, West Virginia, scheduled to begin construction in 2023. Another company, ESS, is building a different type of iron battery that employs similar chemistry; it has begun manufacturing at its headquarters in Wilsonville, Oregon.

In the US, the Inflation Reduction Act (IRA), which was passed in late 2022, sets aside nearly USD 370 billion in funding for climate and clean energy, including billions for EV and battery manufacturing. The IRA will provide loans and grants to battery makers in the US, driving innovation and boosting capacity.

Within Europe, Berlin is a center of battery technology development. The city has a mature ecosystem of companies directly involved in various parts of the battery production value chain. There are a number of companies dealing in stationary and mobile storage systems, electrode production, machinery for cell production, cell assembly, battery management systems (BMSs), testing and validation, power electronics, and also recycling batteries.

Berlin has the highest density of research institutes in Europe, and many of these have a particularly high degree of competence in the fields of battery power and production systems.

These capabilities were showcased at the Berlin conference for battery technology, ‘Future Battery Forum 2023’, taking place in Berlin on Nov 27 – 28 .

How power electronics is contributing to data center sustainability

An October 2023 Yole Group report, "How do power electronics innovations impact the data center PSU industry?", discusses current efforts to improve data center PUE (PUE means Power Usage Effectiveness, the ratio between total data center power demand and the power consumed by its internal computing equipment) .

The Report comments that enhancing the PUE within data centers holds great significance in the quest to reduce operational expenses, minimize energy consumption, and align with environmental sustainability objectives. Constant technological advancements are occurring at both the PSU level and within the associated infrastructure.

PSU manufacturers are not only aiming to augment power capacity by moving from 3 kW to 6 kW but also to enhance power density, transitioning from 45 W/in³ to 100 W/in³. This can be achieved by utilizing wide bandgap materials alongside an increase in the output voltage level from 12 V to 48 V.

Conversely, hyperscale data center and high power computing (HPC) facilities are receptive to implementing infrastructure changes that contribute to an improved PUE. For instance, battery backups (BBUs) have the potential to replace upstream UPSs at the rack level, and existing servers and racks can be retrofitted for liquid cooling in place of conventional air-cooling methods. The adoption of DC power distribution offers energy-efficient advantages, representing a viable mid-term strategy once DC standards and associated equipment reach a higher level of maturity.

The overall power device market for data center PSUs is presenting a significant 7.8 % CAGR between 2022 and 2028. This growth is driven by the trend towards PSUs featuring a 48 V output voltage, as opposed to the traditional 12 V.

More digitization, more sustainability, and more power

As our world becomes increasingly digitized, electrified, and sustainable, it’s easy to focus on the high-profile enabling technologies such as smart grids and smart charging, IoT infrastructures and Cloud computing, 5G communications, EVs, Artificial Intelligence and Machine Learning. While these are indeed essential, they all depend on ubiquitous, underlying power technologies – and power electronics’ vital role will only increase as these world-changing technologies inevitably become more prevalent, more power-hungry, and yet more sustainable.

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