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IN

DEGREE PROJECT ENGINEERING CHEMISTRY, SECOND CYCLE, 30 CREDITS

STOCKHOLM SWEDEN 2021,

Marketing Introduction Plan for the New Generation of Sustainable

Circuit Breakers LTA 420 kV

A real-life case for implementation at Hitachi ABB Power Grids

IVAN FRADINHO BASTOS

KTH ROYAL INSTITUTE OF TECHNOLOGY

SCHOOL OF ENGINEERING SCIENCES IN CHEMISTRY, BIOTECHNOLOGY AND HEALTH

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Abstract

A circuit breaker is a safety device designed to interrupt power if a problem is detected.

There are several kinds of circuit breakers for different applications. Low-voltage circuit breakers are used for household appliances, while high-voltage types are used for transmission networks.

High-voltage circuit breakers use sulfur hexafluoride (SF6) gas as an insulating medium, which extinguishes the electric arc that is formed when power is cut. However, it is a huge hazard for the environment, as its global warming potential (GWP) is 23,500 times higher than that of CO2 gas.

The company Hitachi ABB Power Grids developed the AirPlus™ technology, which replaces the SF6 gas with a carbon dioxide (CO2) based gas mixture. The presented degree project has evaluated the feasibility of reducing the use of SF6 through the AirPlus™ technology and then developed a strategy for the company Hitachi ABB Power Grids for the market introduction of the eco-efficient LTA 420 kV circuit breaker.

This study covers the background research, market evaluation, and market strategy. It was done through research about the AirPlus™ technology and its competitors, so as qualitative and quantitative analysis of the LTA 420 kV circuit breaker implementation in the market.

In conclusion, the study shows that the market introduction of the LTA 420 kV circuit breaker is feasible. Although CO2 is not as good an insulation medium as SF6, it is still good and presents strong customer benefits: GWP reduced by over 99.9%, compliance with new regulations, lower cost of ownership, fewer regulatory controls, reduced cost of handling the gas, and well-functioning at extremely low temperatures. The main concerns for Hitachi ABB Power Grids are related to market competition. Thus, it is advisable that the company works on an effective market introduction to assure a large market share.

Keywords: high-voltage circuit breaker, SF6-free circuit breaker, sustainable circuit breaker, eco-efficient high-voltage circuit breaker, Hitachi ABB Power Grids, AirPlus™, market introduction plan.

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Preface

This degree project was carried out at the School of Engineering Sciences in Chemistry, Biotechnology, and Health of the KTH Royal Institute of Technology, with the support of the company Hitachi ABB Power Grids.

I would like to express my gratitude to Professor Klas Engvall, who supervised this degree project at KTH Royal Institute of Technology. I would also like to thank Jorge Monroy and Daniel Cáceres, who gave me support at Hitachi ABB Power Grids.

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Table of Contents

Abstract ... 1

Preface ... 2

List of Figures ... 5

List of Tables ... 6

Nomenclature ... 7

Confidentiality ... 8

Chapter 1. Introduction ... 9

1.1. Thesis Objectives ... 9

1.2. Thesis Disposition ... 10

Chapter 2. Background ... 11

2.1. Circuit Breakers Applications ... 11

2.2. Circuit Breakers Operation ... 11

2.3. Hazards of SF6 gas as an Insulating Medium ... 14

2.4. New Sustainable Alternatives ... 14

Chapter 3. Methodology ... 15

Chapter 4. Market Evaluation ... 19

4.1. Electrical Frequency Mapping ... 19

4.2. Analysis per Continent ... 20

4.3. Value Added to Customers ... 21

4.4. Competitor Scenario ... 22

4.5. Benefits and Weaknesses of the SF6 Technology ... 23

4.6. Benefits and Weaknesses of the CO2 Technology ... 24

4.7. Benefits and Weaknesses of the Vacuum Technology ... 24

4.8. Benefits and Weaknesses of the g3 Technology ... 25

4.9. Comparison of Traditional and Alternative Technologies ... 25

4.10. Market Segments ... 26

4.11. SWOT Analysis of the LTA 420 kV ... 27

4.12. Client Targeting ... 27

Chapter 5. Market Strategy ... 29

5.1. Client Identification ... 29

5.1.1. Australia ... 29

5.1.2. Denmark ... 30

5.1.3. Finland ... 30

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5.1.4. France ... 30

5.1.5. Germany ... 31

5.1.6. Italy ... 31

5.1.7. Norway ... 31

5.1.8. Poland ... 32

5.1.9. Spain ... 32

5.1.10. Sweden ... 32

5.1.11. United Kingdom ... 32

5.2. Sales Strategy ... 33

5.2.1. Customers ... 33

5.2.2. Public Campaigns ... 34

5.2.3. International Forums ... 34

5.2.4. Targeting Strategy ... 34

5.3. Sales Forecast ... 35

5.3.1. Countries’ Profiles: Interest in Acquiring SF6-free Technologies .. 35

5.3.2. Annual Market Size of 420 kV Circuit Breakers ... 35

5.3.3. Price Policy ... 36

5.3.4. Sales Forecast Scenarios ... 37

5.3.5. Savings in Inspection, Maintenance, Gas Cost, and Carbon Tax .. 40

5.4. Marketing Plan ... 45

5.4.1. Message to the Market ... 46

5.4.2. Promotional Materials and Costs ... 46

5.4.3. Training and Familiarization... 48

Chapter 6. Conclusion ... 49

Chapter 7. Bibliography ... 51

Appendix ... 57

Appendix A. Technical Characteristics of the LTA 420 kV Circuit Breaker ... 57

Appendix B. Electrical Frequency Mapping of Each Country ... 58

Appendix C. European Markets Size of 420 kV Circuit Breakers ... 60

Appendix D. General and Key Buying Criteria ... 61

Appendix E. Inspection and Maintenance Costs ... 65

Appendix E.1. Inspection and Maintenance Costs of the LTB 420 kV .... 65

Appendix E.2. Inspection and Maintenance Costs of the LTA 420 kV .... 66

Appendix F. Gas Cost Savings ... 67

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List of Figures

Figure 1.1. United Nations Sustainable Development Goals ... 9

Figure 2.1. Low-voltage circuit breaker ... 11

Figure 2.2. High-voltage circuit breakers ... 11

Figure 2.3. High-voltage single-pole circuit breaker ... 12

Figure 2.4. Operation of a high-voltage circuit breaker ... 13

Figure 3.1. Methodology flowchart ... 15

Figure 3.2. Sales forecast flowchart ... 16

Figure 4.1. European transmission lines ... 21

Figure 5.1. Sales Forecast of the LTA 420 kV in Annual Revenue ... 40

Figure 5.2. Inspection and Maintenance Costs ... 42

Figure 5.3. Savings in Inspection and Maintenance Costs ... 42

Figure 5.4. Accumulated Gas Cost Savings ... 43

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List of Tables

Table 2.1. GWP and atmospheric lifetime of the main greenhouse gases ... 14

Table 2.2. SF6-free circuit breaker technologies ... 14

Table 4.1. Electrical Frequency Mapping of Each Country ... 19

Table 4.2. Comparison among SF6, Vacuum and CO2 Circuit Breakers ... 26

Table 4.3. SWOT Analysis of the LTA 420 kV ... 27

Table 4.4. Targeted Countries ... 28

Table 5.1. Countries’ Profile to Acquire SF6-free Technologies ... 35

Table 5.2. Annual Market Size of 420 kV Circuit Breakers ... 36

Table 5.3. Price Policy Groups ... 36

Table 5.4. Sales Forecast of the LTA 420 kV in Units per Year ... 37

Table 5.5. Sales Forecast of the LTA 420 kV in Annual Revenue (Scenario 1) ... 38

Table 5.6. Sales Forecast of the LTA 420 kV in Annual Revenue (Scenario 2) ... 38

Table 5.7. Sales Forecast of the LTA 420 kV in Annual Revenue (Scenario 3) ... 39

Table 5.8. Sales Forecast of the LTA 420 kV in Annual Revenue (Summary) ... 39

Table 5.9. Types of Maintenance for Circuit Breakers ... 41

Table 5.10. Hourly Labor Prices ... 41

Table 5.11. Accumulated Inspection and Maintenance Costs ... 41

Table 5.12. Gas Loss Parameters and Cost ... 43

Table 5.13. Gas Cost Savings ... 43

Table 5.14. Carbon Tax Savings ... 44

Table 5.15. Total Savings in Inspection, Maintenance, Gas Cost, and Carbon Tax (Groups) ... 44

Table 5.16. Total Savings in Inspection, Maintenance, Gas Cost, and Carbon Tax (Countries) ... 45

Table 5.17. Costs and Budget for Promotional Materials ... 47

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Nomenclature

AirPlus™: Eco-efficient technology from Hitachi ABB Power Grids that uses a CO2 based gas mixture as an insulating medium for circuit breakers.

CO2: Carbon Dioxide.

GWP: Global Warming Potential.

LTA: Model of CO2 gas circuit breaker manufactured by Hitachi ABB Power Grids.

LTB: Model of SF6 gas circuit breaker manufactured by Hitachi ABB Power Grids.

MIP: Market Introduction Plan.

NEU: North European Region.

SF6: Sulphur Hexafluoride.

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Confidentiality

Part of the data used in this project was extracted from a Hitachi ABB Power Grids database, which contains confidential customer information. All data published in this project have been anonymized, so it does not contain private information from any customer of the company.

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Chapter 1. Introduction

Over the past few decades, society is becoming more focused on the environmental challenges to fight against the natural, social, and economic issues. This commitment involves people, companies, and governments. Because of that, the United Nations made the 2030 Agenda for Sustainable Development, which stated 17 global goals designed to be a "blueprint to achieve a better and more sustainable future for all" [1].

Figure 1.1 presents these goals.

Figure 1.1. United Nations Sustainable Development Goals [2]

The emission of gases is a big concern, especially SF6, which is the most potent known greenhouse gas. Its GWP is 23,500 times higher than that of CO2 gas [3].

High-voltage circuit breakers use gases as an insulating medium, which extinguish the electric arc that is formed when power is cut. The most used gas is SF6, which is the best insulating medium. Laws are being created aiming to reduce its use. For this reason, companies that produce high-voltage circuit breakers are developing SF6-free solutions.

The implementation of these new technologies is very important for society and satisfies three of the United Nations sustainable development goals: “Affordable and Clean Energy”, “Industry, Innovation and Infrastructure”, and “Climate Action”.

1.1. Thesis Objectives

The company Hitachi ABB Power Grids created the environmentally friendly solution AirPlus™, which replaces the SF6 gas with a carbon dioxide (CO2) based gas mixture. This technology is already in use for 72.5 kV and 145 kV segments and is under development for the 420 kV segment [4].

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The purpose of this degree project is to analyze the feasibility of reducing the use of SF6

through this new technology and then develop a strategy for the company Hitachi ABB Power Grids in the market introduction of the LTA 420 kV circuit breaker. The main topics covered in this study are a market evaluation, SWOT analysis, targeting of countries, client identification, sales strategy, sales forecast, savings in the cost of ownership, and marketing plan.

1.2. Thesis Disposition

The second chapter introduces the background about circuit breakers, SF6 gas as an insulating medium, and new sustainable alternatives in circuit breakers. The methodologies used in this project are presented in the third chapter. Meanwhile, the fourth chapter shows a market evaluation containing an electrical frequency mapping, analysis per continent, value-added to customers, competitive situation, benefits and weaknesses of each technology, comparison of traditional and alternative technologies, market segments, SWOT analysis of the LTA 420 kV, and the client targeting. It is followed by the fifth chapter, which contains the client identification, sales strategy, sales forecast, and savings in inspection, maintenance, gas cost, carbon tax, and marketing plan. The conclusion of this project is presented in the sixth chapter, while the bibliography is available in the seventh chapter, and the eighth chapter contains the appendix.

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Chapter 2. Background

2.1. Circuit Breakers Applications

A circuit breaker is a device that interrupts the power if a problem is detected, such as a current peak, to avoid damage to the power grid.

Each kind of circuit breaker is suitable for a specific application. While the small types (represented in Figure 2.1) are for low-voltage uses, such as household appliances (110 V / 220 V), there are powerful models (illustrated in Figure 2.2) for high-voltage power grids, such as transmission networks (up to 1200 kV). The high-voltage 420 kV circuit breakers, which are analyzed in this project, are mainly found at electrical substations on long-distance transmission networks [5].

Figure 2.1. Low-voltage circuit breaker [6] Figure 2.2. High-voltage circuit breakers [7]

2.2. Circuit Breakers Operation

Regardless of the model of circuit breakers, the principle is the same: two wires are connected to the equipment, which is responsible for making the contact, to enable the current flow. When the device is in the closed position, there is a contact between both wires and the power flows. However, when the power must be turned off, the circuit breaker switches to the opened position, which means that the circuit is opened, and the current flow stops.

As this project is referred to the LTA 420 kV high-voltage circuit breaker, the explanation of the operation process will focus on this model. Its technical characteristics are available in Appendix A.

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Figure 2.3. High-voltage single-pole circuit breaker [8]

The circuit breaker parts of Figure 2.3 are numbered from 0 to 7, according to the following:

0) Wire point of contact: These are both points where the electrical wires are connected to the circuit breaker.

1) Breaking chamber: This is the part of the circuit breaker that promotes the electrical contact enabling the electricity flow.

2) Support insulator: The purpose is to extinguish the arcs through a special insulating medium.

3) Support structure: Supporting different parts of the circuit breaker, as well as keeping the equipment high enough so it does not present a risk to the workers around it.

4) Operating mechanism: The controller of the circuit breaker containing a control panel, that may be equipped differently, depending on customer requirements.

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5) Trip spring with protective housing: High-voltage circuit breakers have a spring to change the circuit from closed to opened position, and vice versa. When an electrical peak is detected, the spring is disarmed, which disables the contact between both wires and stops the current flow.

6) Gas supervision: It opens the circuit at low gas pressures to avoid accidents.

7) Position indicator: Displays, through a transparent shutter, if the circuit breaker is in the opened or closed position.

Figure 2.4 shows the opening process of the circuit breaker, turning from closed to the opened position, and then returning to the closed position.

Figure 2.4. Operation of a high-voltage circuit breaker [8]

In any kind of circuit breaker, during the opening process, an electric arc is formed. The arc is a result of the current flow going through an insulating medium, such as air. It causes a dielectric rupture of the gas that produces a plasma discharge, as shown in the arcing step in Figure 2.4.

In a low-voltage circuit breaker, the arc is like a spark, that does not present a worrisome danger. However, under high-voltage conditions, the arc is much more powerful and looks like lightning. It is a huge hazard to the equipment and people. For this reason, it is necessary to use a special insulating medium, instead of air, to extinguish the arc.

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2.3. Hazards of SF

6

gas as an Insulating Medium

The most used insulating medium in high-voltage circuit breakers is SF6, which is a synthetic gas. It has been used in this industry for a long time, and the first industrial applications using this gas for current interruption dates back to the 1950s [9].

SF6 is not toxic for humans but if a large amount is inhaled, it causes suffocation. As the gas is heavier than air, it settles close to the ground, causing a higher risk to workers [10].

It is also a huge hazard to the environment because it is the most potent greenhouse gas that has ever been evaluated. The GWP of the SF6 is 23,500 times higher than that of CO2 when compared over a 100-year period [3]. For this reason, many laws are being created aiming the reduce its use. An important example is the European Union’s F-Gas Regulation, adopted in 2006 and further updated, that created restrictions to the use of fluorinated gases, to reduce their emission [11].

Table 2.1. GWP and atmospheric lifetime of the main greenhouse gases [3]

Greenhouse gas Chemical formula Atmospheric Lifetime (years)

Global Warming Potential, 100-year time horizon

Carbon Dioxide CO2 100 1

Methane CH4 12 25

Nitrous Oxide N2O 121 265

CFC-12 CCl2F2 100 10,200

HFC-23 CHF3 222 12,400

Nitrogen Trifluoride NF3 500 16,100

Sulfur Hexafluoride SF6 3,200 23,500

2.4. New Sustainable Alternatives

Due to the harmful effect of the SF6 gas on the environment, companies producing circuit breakers are developing sustainable alternatives. For high-voltage 420 kV circuit breakers, three companies are developing new solutions that are not available in the market today. These companies are Hitachi ABB Power Grids (a segment of ABB acquired by Hitachi), Siemens, and General Electric.

Table 2.2. SF6-free circuit breaker technologies [12] [13] [14]

Company Technology Insulating medium Hitachi ABB Power Grids AirPlus™ (CO2)-based gas mixture

Siemens Blue Vacuum

General Electric g3 C4F7N + CO2 + O2

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Chapter 3. Methodology

Several types of research and analysis are used in this project. To provide a better understanding of that, two flowcharts are presented below. Figure 3.1 presents the relationship between each topic of the project, while Figure 3.2 provides details regarding the calculation structure of the sales forecast. Explanations about each topic are available in bullet points after the flowcharts.

Figure 3.1. Methodology flowchart

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Figure 3.2. Sales forecast flowchart

• Electrical Frequency Mapping

The LTA 420 kV circuit breaker is specific for 50 Hz, so this step is research to map the worldwide electrical frequency and identify the eligible countries. The results are summarized in Table 4.1 and Appendix A.

• Analysis per Continent

This analysis identifies, mainly through economic and political factors, which continents or countries are more interested in the new technology. It is based on discussions with Hitachi ABB Power Grids’ sales team. It is also verified if the electrical frequencies of these regions are suitable for 420 kV circuit breakers. This analysis refines the list of eligible countries from the electrical frequency mapping.

• Market Segments

It is the analysis of which market segment is included in the market introduction plan.

The decision of the selected segment, which is electricity transmission, is based on research and discussions with Hitachi ABB Power Grids’ sales team. The main use of this information is to select the targeted companies in the client identification.

• SWOT Analysis

The SWOT analysis consists of a summarization of the most important aspects about value-added to customers, competitor scenario, benefits and weaknesses of the LTA 420 kV compared to competing technologies, and comparison between traditional and alternative technologies.

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• Client Targeting

This analysis identifies a reduced list of countries targeted for the market introduction plan. It is a quantitative analysis of the data of the largest European markets for this product, to improve the list of eligible countries from the analysis per continent. The result is the final list of the targeted countries.

• Client Identification

This step identifies the targeted clients for the LTA 420 kV, through research of the companies that operate transmission power grids of suitable electrical frequencies for the product.

• Sales Strategy

This section specifies how to reach companies and authorities, to inform them about the LTA 420 kV. It is based on research and discussions with Hitachi ABB Power Grids’

sales team.

• Sales Forecast

The elaboration of the sales forecast of the LTA 420 kV consists of the following steps:

a) Create the environmental commitment profile of each country to acquire SF6- free solutions.

b) Calculate the estimated number of 420 kV circuit breakers sold by all the companies in each country, through the division of the total annual sales by the average price of the product.

c) Define the prices policy and the premium price by country.

d) Estimate, through the environmental commitment profile, the number of SF6- free circuit breakers that will be sold in the first three years.

e) Create three different scenarios for the sales forecast.

f) Calculate the estimated sales by Hitachi ABB Power Grids for the first three years.

Note: as the premium prices for the LTA 420 kV have not yet been set for group 3 of prices policy, LTB 420 kV prices were used for the calculation of the sales forecast of these countries. In this way, the estimation was conservative.

A flowchart of the sales forecast procedures is depicted in Figure 3.2.

• Savings in Inspection, Maintenance, Gas Cost, and Carbon Tax

The savings in the cost of ownership for the SF6-free model reduces the impact of the premium prices on the customers' budgets. The total savings after the product lifetime of 35 years is calculated through the following procedures:

a) Calculate the savings in inspection and maintenance, through Hitachi ABB Power Grids’ data.

b) Calculate the savings of filling the circuit breaker with CO2 instead of SF6, through Hitachi ABB Power Grids’ data.

c) Research of the carbon tax in each country and, through the leakage gas rate, calculate the savings by not releasing SF6 to the environment.

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d) Summarize the total savings in inspection, maintenance, gas cost, and carbon tax.

Note: many countries do not tax CO2 equivalent emissions for high-voltage circuit breakers yet, but it is expected that they will do this when SF6-free alternatives are available in the market. In this way, carbon tax savings are being considered in these countries at the current carbon tax rate.

• Marketing Plan

The marketing plan lists the main steps that should be followed by the company Hitachi ABB Power Grids to reach a successful launch on the market. It is based on the summarization of information available in other chapters and discussions with Hitachi ABB Power Grids’ sales team. There is also information about the message to the market, promotional materials, and training for the sales team.

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Chapter 4. Market Evaluation

4.1. Electrical Frequency Mapping

Electricity is distributed, around the world, in two electrical frequencies: 50 Hz or 60 Hz.

As the LTA 420 kV circuit breaker is designed specifically for 50 Hz, it is important to analyze the electrical frequency of each country to map the potential regions to sell the product. Table 4.1 shows a brief analysis. A more detailed analysis of that is available in Appendix B.

Table 4.1. Electrical Frequency Mapping of Each Country [15]

Continent Frequency Countries applying 50 Hz Africa 50 Hz

(Suitable)

All the countries.

America 50 Hz (Suitable)

Argentina, Barbados, Bolivia, Bonaire (Netherlands), Chile, Curaçao (Netherlands), Dominica, Falkland Islands (UK), French Guiana (France), Greenland (Denmark), Grenada, Guadeloupe (France), Guyana, Haiti, Jamaica, Martinique (France), Paraguay, Saba (Netherlands), Sint Eustatius (Netherlands), Saint Lucia, Saint Pierre and Miquelon (France), Saint Vincent and the Grenadines, Uruguay.

Asia 50 Hz

(Suitable)

Afghanistan, Armenia, Azerbaijan, Bahrain, Bangladesh, Bhutan, Brunei, Cambodia, China, Cyprus, Georgia, India, Indonesia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kuwait, Kyrgyzstan, Laos, Lebanon, Malaysia, Maldives, Mongolia, Myanmar, Nepal, North Korea, Oman, Pakistan, Palestine, Qatar, Russia, Singapore, Sri Lanka, Syria, Tajikistan, Thailand, Timor-Leste, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan, Vietnam, Yemen.

Oceania 50 Hz (Suitable)

Australia, Fiji, Kiribati, Nauru, New Zealand, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu, Cook Islands (NZ), New Caledonia (France), Niue (NZ), Norfolk Island (Australia), Pitcairn Islands (UK), Tokelau (NZ), Wallis and Futuna (France).

Europe 50 Hz

(Suitable)

All the countries.

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4.2. Analysis per Continent

Economical and political aspects are relevant for the selection of targeted regions. The following analysis identifies, through these factors, which continents or countries are more prone to purchase the SF6-free technology.

1) Africa:

• All the countries of Africa use 50 Hz, but there are no environmental regulations in the continent justifying the clients to pay higher prices for the SF6-free technology.

2) America:

• As seen in Table 3, Canada and the United States of America, which are very large markets, cannot be targeted for this product because their electrical frequency is not 50 Hz.

• The product price is not attractive in Latin America due to the weak environmental regulations and unstable economies. Therefore, this continent is excluded from the target market.

3) Asia:

• The transcontinental Asian states that also belong to Europe (e.g. Russia and Turkey) will be analyzed as European countries.

• The other countries do not have environmental legislation that justifies the higher price.

4) Europe:

• Russia is excluded from the potential markets because its customers are not willing to pay premium prices for environmentally friendly circuit breakers. Also, the country’s bureaucracy makes it more difficult to do business there.

• The European micronations (Andorra, Liechtenstein, Malta, Monaco, San Marino, and Vatican City) are very small markets and will therefore not be targeted.

5) Oceania:

• Australia is a large market, and its electrical frequency is 50 Hz. Also, the country has established control of gas emissions. For that reason, Australia is being targeted.

• The other countries are not large enough to justify targeting.

It is also important to verify if the selected countries have power grids suitable for 420 kV circuit breakers, which are usually in the range of 300-400 kV. According to the European Network of Transmission System Operators (ENTSO-E), in the European continent, the electrical voltage of all these countries is in this range [16]. Also, Australia uses this kind of circuit breaker for its 330 kV power grids [17]. The European transmission lines map is presented in Figure 4.1.

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Figure 4.1. European transmission lines [16]

For these reasons, the European countries (excluding the micronations) and Australia are eligible as targeted countries. Furthermore, each market volume will be analyzed in Chapter 4.12 so the final target countries can be defined.

4.3. Value Added to Customers

The product benefits must be clearly expressed to the customers to justify the purchase of this new circuit breaker model. The key points are:

• Environmentally friendly

The company Accenture surveyed, in 2019, 6,000 consumers in 11 countries across North America, Europe, and Asia to analyze the sustainable behavior of the society [18].

In the survey, 72% of the respondents stated that they are currently buying more environmentally friendly products than they were five years ago, and 81% said they expect to buy more over the next five years. It shows that it is important that the companies follow this trend to attract new customers.

This same reasoning applies to acquiring SF6-free circuit breakers, as it will enable the companies to drastically reduce the environmental impact of their power grids and make great marketing to the customers.

• Compliance with new regulations

Due to the high GWP of SF6 and new environmental regulations, the use of SF6 is getting more restricted. Many European countries, for example, are banning products that use SF6 despite being alternative solutions available on the market.

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Following this regulatory trend, it is expected that SF6 circuit breakers will be targeted by these regulations soon. In this way, acquiring environmentally friendly technologies is a way for companies to anticipate the update of regulations and be able to use the circuit breakers for a longer time.

• Less regulatory controls

As SF6 is a harmful gas to the environment, there are inspection, maintenance requirements, and stock reporting. Using SF6-free alternatives is a way to reduce the number of controls that should be followed, in addition to the convenience of not having to manipulate this gas.

• Lower cost of handling the gas

Circuit breakers with SF6 technology require a special procedure to be disassembled at the end of their lifetime, as the gas must have appropriate final disposal. This cost does not apply to the CO2 technology.

• Lower cost of ownership

Many countries are taxing the emission of gases, through the CO2 equivalent. As SF6’s GWP is 23.500 higher than CO2, the company will have to pay high taxes during the product lifetime. Therefore, the new alternatives are a way to reduce the cost of ownership. There are also savings in inspection, maintenance, and gas cost for the LTA 420 kV.

4.4. Competitor Scenario

As it is more difficult to develop circuit breakers that operated at higher voltage, the SF6- free circuit breakers for 420 kV are not available at the market yet. For the time being, only up to 145 kV is available on the market. There is however a big market for the 420 kV circuit breakers, and it is believed that there are only three companies with the ability to develop the technology for 420 kV, namely Hitachi ABB Power Grids, Siemens, and General Electric.

Hitachi ABB Power Grids:

• The company is currently developing the technology with a CO2 gas mixture.

• ABB (before becoming Hitachi ABB Power Grids through Hitachi’s acquisition) launched the 72.5 kV circuit breaker in 2012 [19] and the 145 kV product in 2019 [20].

• Hitachi ABB Power Grids expects to be a pioneer in the market in the SF6-free 420 kV segment.

Siemens:

• Siemens studied the development of CO2 technology circuit breakers in the 1990s but discarded it as a viable option. The company developed the product with vacuum technology.

• The company launched the vacuum circuit breaker of 72.5 kV in 2016 [21], and the 145 kV product in 2018 [22].

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• It is very unlikely that it is possible to develop 420 kV circuit breakers with this same technology. This way, according to Hitachi ABB Power Grids’ sales team, the company will probably use another technology in this product.

General Electric:

• Since 2007, General Electric has been developing the Green Gas for Grid (g3) technology in partnership with the company 3M [23].

• The company has already launched models for 72.5 kV and 145 kV [13].

• The company has been awarded USD 2.4 million through the European Commission’s LIFE climate action program to help in the development of the SF6- free 420 kV gas-insulated substation (GIS) circuit-breaker, which uses g3 technology [5].

4.5. Benefits and Weaknesses of the SF

6

Technology

SF6 is the only technology currently available for 420 kV circuit breakers. The main benefits and weaknesses of the SF6 technology are listed below:

Benefits of the SF6 Technology [10] [24]

• The gas is the best insulating medium to extinguish arcs in circuit breakers.

• It is not toxic for humans.

• The gas is not flammable and chemically stable.

• The decomposition products are neither explosive nor flammable.

• The performance of SF6 is not affected by weather conditions (except for extremely low temperatures, close to its boiling point).

• The operation is noiseless.

Weaknesses of the SF6 Technology [10] [24]

• The GWP of SF6 is 23,500 higher than that of CO2.

• It is necessary a higher level of maintenance and inspection, due to the high GWP of the gas.

• Many countries require reporting the stock of this gas.

• There are many procedures related to the commercialization of this gas.

• Special facilities are required for the transportation of the gas.

• In some countries, it is necessary to pay a fee for using the SF6 gas (carbon tax).

• Its boiling point does not allow for use at very low temperatures without gas mixtures.

• SF6 is not toxic for humans but if a large amount is inhaled, it causes suffocation.

As the gas is heavier than air, it settles close to the ground, causing a higher risk to workers.

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4.6. Benefits and Weaknesses of the CO

2

Technology

AirPlus™ is the CO2 based technology, developed by Hitachi ABB Power Grids, to replace SF6 in high-voltage circuit breakers. These are the main benefits and weaknesses of the CO2 technology:

Benefits of the CO2 Technology [24]

• The GWP is reduced by over 99.9% compared to SF6 technology.

• Its lower boiling point allows using it at low temperatures (-60 °C).

• The gas is a good insulating medium to extinguish arcs in circuit breakers.

• It is not toxic for humans.

• The gas is chemically stable and not flammable.

• It is not necessary to report the stock of the gas.

• There are no restrictions related to the commercialization of the gas.

• It is possible to save money in some countries that apply carbon tax.

• CO2 is easy to purchase.

Weaknesses of the CO2 Technology [24]

• The gas is not as good as SF6 as an insulation medium.

• The application parameters are more restricted than with SF6 due to the properties of the gas.

• Higher pressure is required, which results in higher energy demand due to the higher energy needed to move the contacts.

4.7. Benefits and Weaknesses of the Vacuum Technology

Siemens uses a vacuum as an insulating medium for high-voltage circuit breakers. The main benefits and weaknesses of vacuum technology are presented below:

Benefits of the Vacuum Technology [24] [25]

• Lower operating energy required. Hence, a shorter distance is needed to fulfill di-electric strength between contacts. The difference in operating energy (CO2

vs Vacuum) seems unlikely to give a major cost advantage for the vacuum solution.

• The lifetime of the vacuum bottle is long (up to 100,000 operations) and maintenance-free.

• The sealing system is designed to last for the total lifetime of the circuit breaker.

• This insulating medium does not condensate, so it can be used at very low temperatures (-60 °C).

• High dielectric resistance recovery after current zero.

• The insulating medium does not use oil, so there is no risk of explosion.

• The GWP is reduced by 100%.

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Weaknesses of the Vacuum Technology [24] [25] [26]

• Despite the vacuum bottle and sealing system being maintenance-free, the operating mechanism still needs maintenance.

• It is not possible to measure vacuum pressure online. The circuit breaker must be taken out of service to do this measurement.

• High frequent current interruption, leading to multiple re-ignition as well as high and steep voltage transients, which can damage the power transformer.

• Manufacturing requires an extremely clean environment.

• The price of this technology is expensive, although the market price has significantly decreased during the last years.

• Limited applicability above 145 kV.

• Vacuum circuit breakers emit X-ray radiation when a rated voltage is applied.

4.8. Benefits and Weaknesses of the g

3

Technology

General Electric uses g3, a gas developed in partnership with the company 3M, as an insulating medium for its high-voltage circuit breakers. These are the main benefits and weaknesses of the g3 technology:

Benefits of the g3 Technology [27] [28]

• The GWP is reduced by over 99% comparing to SF6 technology.

• The toxicity level of the gas g3 is very low, so it is not dangerous for humans.

Weaknesses of the g3 Technology [27] [28] [29]

• It is not suitable for temperatures lower than -30 °C.

• The by-products from arcing in g3 have the same toxicity class as those generated by SF6 under the same conditions.

• Low availability of the g3 gas in the market (fewer suppliers).

• Special procedures are required to fill in and handle the gas.

4.9. Comparison of Traditional and Alternative Technologies

Table 4.2 shows the difficulty level to develop different types of circuit breakers. Higher voltages increase its difficulty, as does SF6-free technologies.

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Table 4.2. Comparison among SF6, Vacuum and CO2 Circuit Breakers [30]

Note: Besides the higher boiling point of the SF6 comparing to the other technologies, it is considered “possible” at - 60 °C because it is possible to reduce the boiling point of the insulation medium through a gas mixture.

From Table 4.2, it can be concluded that the increase in voltage results in greater difficulty for the development of circuit breakers. Nevertheless, it is more difficult to develop circuit breakers with CO2 (AirPlus™) than SF6, but easier than vacuum. In addition, unless the temperature is extremely low (-60 °C), there is no difficulty in developing the equipment.

4.10. Market Segments

The 420 kV circuit breakers are used for high voltage power grids, that usually have voltages between 330 kV and 400 kV. This level of voltage is mostly used in electric power transmission [5], which consists of the electricity transmission from a generating site (power plant) to an electrical substation. The electricity is then delivered to the individual consumers (electric power distribution). At this stage, the voltages are much lower, so 420 kV circuit breakers are not suitable in this segment. There is also possible use of this product in mining activity, however, the volume of this market is much lower than for electrical transmission. Conclusively, the chosen target segment for this project is electric power transmission.

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4.11. SWOT Analysis of the LTA 420 kV

SWOT analysis is a strategic planning technique used to identify the strengths, weaknesses, opportunities, and threats to a project. The most important aspects for the LTA 420 kV are presented in Table 4.3.

Table 4.3. SWOT Analysis of the LTA 420 kV Strengths

• Environmentally friendly.

• Substantially lower cost of ownership (lower maintenance costs and no stock control needed).

• Compliance with new regulations.

• Competitive technical specifications (operates well at extremely low temperatures).

• It does not require gas mixtures.

• Timing in product development.

• Hitachi ABB Power Grids brand.

Weaknesses

• Not available for 60 Hz yet.

• Not available for voltages higher than 420 kV.

• More expensive than the SF6

technology.

Opportunities

• Can charge premium prices before market concentration decreases due to the presence of competitors’

alternatives.

• This solution enables a continued price premium.

Threats

• Vacuum technology.

• g3 technology.

• SF6 technology.

• Gas-insulated switchgear (GIS).

• Initially the only non-SF6 supplier in certain segments.

• Alone to influence the market.

• Competition may increase soon.

• Many countries do not have strong environmental regulations.

The analysis shows that the main concerns for Hitachi ABB Power Grids are related to market competition. It also presents strong positive aspects related to the need of the market for SF6-free alternatives. Thus, the focus of the company must be presenting the benefits of the product and a good market introduction.

4.12. Client Targeting

The table available in Appendix C shows the total estimated European market of 420 kV circuit breakers, for the SF6 technology. This table contains data from 21 European countries, that together have a total annual revenue of €42,000,000. This information can be used to estimate the market sizes for the SF6-free technology and select the potential countries.

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From the table, it is evident that Hitachi ABB Power Grids must focus its efforts on markets that have a higher potential of buying this new technology to maximize sales.

Thus, to choose a reduced number of countries to be focused on as target markets, eleven states are selected. Table 4.4 presents the markets focused on this study. The reason for selecting them are:

• The seven European countries with the largest markets for 420 kV circuit breakers (excluding Turkey due to the low interest in the new technology).

• Poland, as Hitachi ABB Power Grids is already established in this market.

• Denmark and Finland, due to the high interest in environmentally friendly solutions in the Nordic countries.

• Australia because it is a market with high potential and environmental trends.

Table 4.4. Targeted Countries Continent Countries

Oceania Australia Europe Denmark

Finland France Germany Italy Norway Poland Spain Sweden

United Kingdom

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Chapter 5. Market Strategy

The development of an effective market strategy is fundamental for a successful product launch in the market. The first step is mapping the potential customers and understanding how to reach them, what is covered in client identification and sales strategy sections.

The further step, which is the financial analysis, consists of a sales forecast that estimates the revenue in different scenarios. The AirPlus™ technology leads to cost savings, which are also presented in this section.

Lastly, the marketing plan describes the approach to introduce the LTA 420 kV circuit breaker on the market.

5.1. Client Identification

The client identification regards the mapping of the potential customers for the LTA 420 kV circuit breaker. This procedure identifies which companies should Hitachi ABB Power Grids contact during the product introduction into the market. The following list includes companies that operate high-voltage transmission power grids, suitable for 420 kV circuit breakers, in the countries targeted in Chapter 4.12. The general criteria and key buying criteria for each country are available in Appendix D.

5.1.1. Australia

Customers:

• Transgrid

Description: TransGrid is the manager and operator of the high voltage electricity transmission network in Australia [31].

Voltage: The company operates a 330 kV transmission network [17].

• Western Power

Description: Western Power operates a transmission network in Western Australia [32].

Voltage: The company operates a 330 kV transmission network [33].

• Powerlink

Description: Powerlink operates a transmission network in the state of Queensland (Australia) [34].

Voltage: The company operates a 330 kV transmission network [35].

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• AusNet Services

Description: AusNet Services owns and operates the transmission network in the Australian state of Victoria [36].

Voltage: The company operates a 330 kV transmission network [37].

• ElectraNet

Description: ElectraNet operates a transmission network in South Australia [38].

Voltage: The company operates a 275 kV transmission network [39].

5.1.2. Denmark

Customers:

• Energinet

Description: Energinet is the national transmission system operator in Denmark [40].

Voltage: The company operates a 400 kV transmission network [41].

5.1.3. Finland

Customers:

• Fingrid

Description: Fingrid is the national electricity transmission grid operator in Finland [42].

Voltage: The company operates a 400 kV transmission network [43].

5.1.4. France

Customers:

• RTE

Description: RTE is the electricity transmission system operator of France. It is responsible for the operation, maintenance, and development of the French high- voltage transmission system [44].

Voltage: The company operates a 400 kV transmission network [45].

Note: Despite the French market remains conservative, the company is interested in SF6- free solutions.

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5.1.5. Germany

Customers:

• TransnetBW

Description: TransnetBW operates the electricity transmission grid in the German state of Baden-Württemberg [46].

Voltage: The company operates a 380 kV transmission network [46].

• Amprion

Description: Amprion is a transmission system operator for electricity in Germany [47].

Voltage: The company operates a 380 kV transmission network [48].

• 50Hertz Transmission

Description: 50Hertz Transmission is a transmission system operator for electricity in Germany [49].

Voltage: The company operates a 380 kV transmission network [50].

5.1.6. Italy

Customers:

• Terna Group

Description: Terna Group is the owner of the Italian national transmission grid for high voltage power and is the largest independent electricity transmission system operator (TSO) in Europe [51].

Voltage: The company operates a 380 kV transmission network [51].

5.1.7. Norway

Customers:

• Statnett

Description: Statnett is the designated transmission system operator in Norway [52].

Voltage: The company operates 300 kV and 420 kV transmission networks [53].

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5.1.8. Poland

Customers:

• Polskie Sieci Elektroenergetyczne (PSE)

Description: PSE is the transmission system operator in Poland [54].

Voltage: The company operates a 400 kV transmission network [55].

Note: The company has a good relationship with Hitachi ABB Power Grids.

5.1.9. Spain

Customers:

• Red Eléctrica de España

Description: Red Eléctrica de España is a company that operates the Spanish national power transmission system [56].

Voltage: The company operates a 400 kV transmission network [57].

5.1.10. Sweden

Customers:

• Svenska Kraftnät

Description: Svenska Kraftnät is an electricity transmission system operator in Sweden [58].

Voltage: The company operates a 400 kV transmission network [59].

5.1.11. United Kingdom

Customers:

• National Grid

Description: National Grid is a multinational electricity company in the UK that owns and operates electricity transmission networks [60].

Voltage: The company operates a 400 kV transmission network [61].

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• Scottish and Southern Energy (SSE)

Description: Scottish and Southern Energy is an energy company headquartered in Scotland [62].

Voltage: The company operates a 400 kV transmission network [62].

5.2. Sales Strategy

There are an increasing number of high-voltage circuit breaker customers in industrialized countries demanding SF6-free alternatives. The main reason for this is the pressure from regulatory institutions and governments to improve the sustainability factor through penalties and taxation, plus the desire to present an environmentally friendly public image.

Sales strategies consist of procedures to reach these customers at the LTA 420 kV circuit breakers launch.

5.2.1. Customers

• Current customers

Companies that may buy the high-voltage SF6-free circuit breakers are already known, as they are current customers of high-voltage circuit breakers. It is necessary to define the potential customers, whom Hitachi ABB Power Grids are going to contact to present the new solution.

Despite some current customers being from the energy generation and mining industries, the customers with more potential are the energy distribution companies [5].

They are going to be contacted, especially those that already buy circuit breakers from Hitachi ABB Power Grids.

To present the new technology, it is important to contact the local subsidiary of Hitachi ABB Power Grids in the client’s country. The subsidiary has contacts and can work as an intermediary to arrange a meeting.

• Relationship with customers

It is also important to have an excellent relationship with customers, as during the introduction of new technologies it is usually necessary to introduce adjustments in the product based on the user experience. This monitoring should be from the sales to the maintenance stages.

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5.2.2. Public Campaigns

Public campaigns are an interesting strategy to make society and governments aware of the new eco-efficient technology. These campaigns must be focused on:

• Society

The world is facing an environmentally-friendly trend. Society, which is an end-user of electricity, must be aware of the new SF6-free technologies to pressure the companies to adopt these alternatives.

• National authorities

The national authorities of many countries, especially in Europe, wish to tax or ban the use of fluorinated gases when there are viable alternatives. Also, many of the clients for these circuit breakers are power transmission companies that belong to the governments.

Through the connections of local subsidiaries of Hitachi ABB Power Grids, it is important to arrange meetings with the national authorities to notify them regarding the existence of SF6-free alternatives. It will also increase the chances that customers receive requests from different channels to use this new technology.

• European Commission (European Union)

The European Commission, which belongs to the European Union, is responsible for proposing legislation, such as the already adopted F-gas Regulation. It is pertinent to notify this organization about the SF6-free technologies for circuit breakers so they can know that there is a viable alternative in the market and, through adjustments in the regulations, pressure governments and companies to adopt it.

5.2.3. International Forums

International energy forums are a good opportunity to present the new technology for both governments and companies. In this way, Hitachi ABB Power Grids is encouraged to send teams to international forums such as International Council on Large Electric Systems (CIGRE) [63] and International Energy Forum (IEF) [64].

5.2.4. Targeting Strategy

It is crucial to penetrate the markets (presented in Table 4.4) quickly before any other competitor gets a big share of these markets. The best target strategy is to prioritize the countries that have the potential to buy this technology earlier.

The European Union and Australia are creating strong regulations restricting the use of fluorinated gases. For this reason, these markets have been chosen first and must be aggressively targeted.

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5.3. Sales Forecast

Sales forecasting, which is a process of estimating the company's future revenues, is fundamental for the launch of a product on the market. It supports the business management in the profitability evaluation, strategies development, budget setting, inventory management, etc. This chapter regards the complete process of calculation of the sales forecast for LTA 420 kV circuit breakers.

5.3.1. Countries’ Profiles: Interest in Acquiring SF

6

-free Technologies

Knowing the interest of each country in acquiring SF6-free technologies is crucial to define which markets should be targeted first and estimate the percentage of each market that will be replaced by the new solutions. Three profiles, from countries that have a higher interest in SF6-free solutions to more conservative countries, are created.

These profiles are presented in Table 5.1.

The Nordic countries (Denmark, Finland, Norway, and Sweden) and the United Kingdom are more interested in SF6-free technologies, so higher percentages apply for these countries. An intermediary interest is expected for Australia, Germany, Italy, and Spain.

Lastly, France and Poland are the countries with the lowest expected interest. All these assumptions are based on discussions with the Hitachi ABB Power Grids’ sales team.

The data presented in Table 5.1 regards the percentages of sales (for the first three years) of SF6-free 420 kV circuit breakers by all the competitors. This table is going to be used further in Chapter 5.3.4 to estimate the market share of Hitachi ABB Power Grid. It is worth mentioning that the percentages of the first year are assumed to be conservative while the percentages of the third year are based on the expectation of an aggressive push marketing strategy.

Table 5.1. Countries’ Profile to Acquire SF6-free Technologies

Profile Countries Year 1 Year 2 Year 3

More interested in SF6-free technologies

Denmark, Finland, Norway, Sweden, United

Kingdom.

15% 25% 40%

Intermediary Australia, Germany, Italy, Spain.

7% 12% 20%

More conservative France, Poland. 4% 7% 10%

5.3.2. Annual Market Size of 420 kV Circuit Breakers

To estimate the number of units that will be annually sold in each country, it is important to know the market size of the current technologies. It can be estimated through the

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division of the total annual sales [65] by the average price of the product [65]. The results are presented in Table 5.2.

Table 5.2. Annual Market Size of 420 kV Circuit Breakers

The data provided in Table 5.2 are further used in Table 5.4 to calculate the sales forecast for the LTA 420 kV.

5.3.3. Price Policy

Due to the benefits and costs associated with the development of the new technology, the price of the LTA 420 kV, which is the SF6-free model, is going to be higher than for the LTB 420 kV. The strategy of the new price policy is to reduce the price difference between countries, so the countries with higher prices will face less premium price increase than the intermediary countries. The prices of the third group, which are the lowest priced countries, will be decided case by case by Hitachi ABB Power Grids. Table 5.3 explains the new price policy.

Table 5.3. Price Policy Groups

Group Pricing logic Countries Premium (%)

1) Countries with higher prices.

The premium price should not increase too much to

enable a faster

introduction of the new product in the market, as well as to reduce the difference of the price ranges.

Denmark, Finland,

France, Italy, Sweden, United Kingdom.

30-35%

2) Countries with intermediary prices.

Set a premium price to align the level of prices to group 1.

Germany, Norway, Poland.

45-50%

Country Total annual market (€) Average price (€) Total annual market (units)

Australia 3,500,000 65,000 54

Denmark 250,000 90,000 3

Finland 300,000 95,000 3

France 2,500,000 80,000 31

Germany 6,000,000 75,000 80

Italy 6,000,000 85,000 71

Norway 3,500,000 70,000 50

Poland 1,200,000 70,000 17

Spain 4,000,000 66,000 61

Sweden 3,300,000 100,000 33

United Kingdom 3,000,000 95,000 32

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37 3) Countries with

lower prices.

Prices should not be aligned to group 1 as it could get difficult to introduce the product in these markets with competitive prices. Then, use an intermediary premium percentage.

Australia, Spain.

N/A (Define a minimum price and decide case

by case)

It is not expected that the competitors will set much lower prices for the new technologies due to the costs of product development. The premium prices presented in Table 5.3 are also important to estimate the new sales amount of this market.

5.3.4. Sales Forecast Scenarios

The final step to estimate the revenue is to calculate the total number of SF6-free 420 kV circuit breakers expected to be sold by all the competitors in the first three years (Table 5.4). This information is used in Tables 5.5, 5.6, and 5.7 to forecast the sales of LTA 420 kV in different scenarios.

Table 5.4. Sales Forecast of the LTA 420 kV in Units per Year Country Total annual market

(units)

Year 1 (units)

Year 2 (units)

Year 3 (units)

Australia 54 4 6 11

Denmark 4 1 1 1

Finland 4 1 1 1

France 30 1 2 3

Germany 80 6 10 16

Italy 86 5 8 14

Norway 48 8 13 20

Poland 17 1 1 2

Spain 61 4 7 12

Sweden 42 5 8 13

United Kingdom 38 5 8 13

Based on this data, three different scenarios of sales by Hitachi ABB Power Grids are calculated.

• Scenario 1

Scenario 1 is the most optimistic one. It considers Hitachi ABB Power Grids as the pioneer on the market, so the company will only have competitors in this segment from the second year. In this way, as the company consolidates its position in the market before the competitors, it will have a bigger share in the following years.

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The estimated market shares are 100% for year 1, 70% for year 2, and 70% for year 3.

These assumptions are based on discussions with Hitachi ABB Power Grids’ sales team.

The sales forecast of Scenario 1 is available in Table 5.5.

Table 5.5. Sales Forecast of the LTA 420 kV in Annual Revenue (Scenario 1) Country Year 1 (€) Year 2 (€) Year 3 (€)

Australia 260,000.00 273,000.00 500,500.00 Denmark 119,250.00 83,475.00 83,475.00

Finland 125,875.00 88,112.50 88,112.50 France 106,000.00 148,400.00 222,600.00 Germany 663,750.00 774,375.00 1,239,000.00 Italy 563,125.00 630,700.00 1,103,725.00 Norway 826,000.00 939,575.00 1,445,500.00 Poland 103,250.00 72,275.00 144,550.00 Spain 264,000.00 323,400.00 554,400.00 Sweden 662,500.00 742,000.00 1,205,750.00 United Kingdom 629,375.00 704,900.00 1,145,462.50

• Scenario 2

Scenario 2 is the intermediary scenario. It considers that Hitachi ABB Power Grids will introduce the new product in the market along with another competitor and that both will have the same market share.

The estimated market shares are 50% for year 1, 50% for year 2, and 50% for year 3.

These assumptions are based on discussions with Hitachi ABB Power Grids’ sales team.

The sales forecast of Scenario 2 is presented in Table 5.6.

Table 5.6. Sales Forecast of the LTA 420 kV in Annual Revenue (Scenario 2) Country Year 1 (€) Year 2 (€) Year 3 (€)

Australia 130,000.00 195,000.00 357,500.00 Denmark 59,625.00 59,625.00 59,625.00

Finland 62,937.50 62,937.50 62,937.50 France 53,000.00 106,000.00 159,000.00 Germany 331,875.00 553,125.00 885,000.00 Italy 281,562.50 450,500.00 788,375.00 Norway 413,000.00 671,125.00 1,032,500.00 Poland 51,625.00 51,625.00 103,250.00 Spain 132,000.00 231,000.00 396,000.00 Sweden 331,250.00 530,000.00 861,250.00 United Kingdom 314,687.50 503,500.00 818,187.50

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• Scenario 3

Scenario 3 is the most pessimistic one. It considers that Hitachi ABB Power Grids will introduce the new product in the market along with the two other competitors, and that it will have a lower market share than the others.

The estimated market shares are 20% for year 1, 20% for year 2, and 20% for year 3.

These assumptions are based on discussions with Hitachi ABB Power Grids’ sales team.

The sales forecast of Scenario 3 is shown in Table 5.5.

Table 5.7. Sales Forecast of the LTA 420 kV in Annual Revenue (Scenario 3) Country Year 1 (€) Year 2 (€) Year 3 (€)

Australia 52,000.00 78,000.00 143,000.00 Denmark 23,850.00 23,850.00 23,850.00

Finland 25,175.00 25,175.00 25,175.00 France 21,200.00 42,400.00 63,600.00 Germany 132,750.00 221,250.00 354,000.00 Italy 112,625.00 180,200.00 315,350.00 Norway 165,200.00 268,450.00 413,000.00 Poland 20,650.00 20,650.00 41,300.00 Spain 52,800.00 92,400.00 158,400.00 Sweden 132,500.00 212,000.00 344,500.00 United Kingdom 125,875.00 201,400.00 327,275.00

• Sales Forecast:

The last step of the sales forecast section is the calculation of the annual revenue by Hitachi ABB Power Grids for each one of the scenarios for the first three years. It consists of the sum of the revenues of all the countries for each year. The sales forecast of LTA 420 kV circuit breakers is presented in Table 5.8 and Figure 5.1.

Table 5.8. Sales Forecast of the LTA 420 kV in Annual Revenue (Summary) Scenario Year 1 (€) Year 2 (€) Year 3 (€) Total (€)

1 4,323,125.00 4,780,212.50 7,733,075.00 16,836,412.50 2 2,161,562.50 3,414,437.50 5,523,625.00 11,099,625.00 3 864,625.00 1,365,775.00 2,209,450.00 4,439,850.00

References

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