Solving the HVDC Puzzle for Renewables: Why it Matters

The global energy transition towards renewable sources has created an unprecedented demand for efficient, long-distance power transmission infrastructure. As the world races to meet ambitious decarbonization targets, High Voltage Direct Current, or HVDC, is proving to be a key enabler that connects vast renewable resources in remote locations to energy-hungry urban centres thousands of kilometres away.

In one of its reports, the International Energy Agency notes that the global shift to renewable power is driving huge investments in high-voltage and ultra-high-voltage (UHV) transmission infrastructure, and Direct Current (DC) transmission is gaining momentum as it is well-suited for long-distance transmission. 

The global length of high-voltage direct current (HVDC) lines nearly tripled between 2010 and 2021, exceeding 100,000 km. This reflects an expansion of long-distance overhead lines in China and Brazil and underground and subsea cables in Europe.

Why HVDC Transmission is a Game Changer for Renewables?

HVDC transmission can well be called a game-changer for renewables because it enables efficient long-distance power transfer. Such an arrangement is critical for integrating large-scale renewable energy sources, such as wind and solar, which are often located far from demand centres. 

Long-Distance Efficiency

HVDC transmission uses direct current to transmit electricity over long distances at high voltages, typically between 100 kV and 1,100 kV.  

Thus, it supports the expansion and modernisation of transmission grids, which have struggled to keep pace with rapid renewable deployment, causing project delays and increased costs. 

Reduced Transmission  Losses

The most significant advantage of HVDC is its dramatically reduced transmission losses. As per International Press Corporation, HVDC transmission losses are quoted at approximately 3.5 percent per 1,000 kilometres, about 50 percent less than HVAC lines, which suffer around 6.7 percent losses. 

This efficiency stems from the fact that direct current transfers only active power, avoiding the phase shift between voltage and current that plagues AC transmission and causes reactive power losses. 

Overall Grid Stability and Reliability

HVDC systems also provide unparalleled control over power flows, which is essential for integrating intermittent renewable energy sources like wind and solar. By stabilising voltage and frequency fluctuations, HVDC contributes to overall grid stability and reliability, a critical requirement as renewables constitute an increasing share of the energy mix. 

HVDC allows operators to precisely control power flow in real time to balance fluctuating supply with demand. Modern HVDC installations using Voltage Source Converter (VSC) technology can cut transmission losses roughly in half compared to traditional AC lines, particularly for submarine or underground cables.

No Need for Synchronisation

HVDC can connect grids that operate at different frequencies without the need for synchronisation. This allows previously incompatible grids to exchange power, improving stability and economy while enabling international energy trading. 

The controllability feature also allows automatic power flow adjustments to support networks during transient conditions without risking cascading failures across interconnected systems.

HVDC's Role in Long Distance Transmission

HVDC technology has become an enabler for "electricity highways" that span entire continents, a feat previously considered impossible. Unlike AC systems, HVDC offers lower transmission losses over extended distances, making it a preferred solution for cross-border energy trade and subsea interconnectors. 

As per one Future Market Insights report, the HVDC Cables Market, one of the most essential indicators of HVDC growth, is estimated to be valued at USD 13.3 billion in 2025 and is projected to reach USD 61.3 billion by 2035, registering a compound annual growth rate (CAGR) of 16.5 percent over the period.

Initially, the growth will mostly be due to Investments in offshore wind connections, regional interconnectors, and grid modernisation initiatives. However, between 2030-2035, the HVDC Cables Market shows a robust USD 32.8 billion opportunity, representing 68.3 percent of incremental growth, driven by mega HVDC projects designed for intercontinental power trade and ultra-high-voltage installations of ±800 kV and above. 

The trend is being particularly supported by strategic investments in grid modernisation, particularly across Europe, Asia-Pacific, and parts of North America. 

China's Massive HVDC Lines: Connecting East and West

China leads the way in ultra-high-voltage direct current (UHVDC) technology and accounted for nearly 50 percent of the global HVDC line length in 2021. China’s west-to-east power transmission programme involves transmitting power resources from western provinces such as Guizhou, Yunnan, Guangxi, and Inner Mongolia to power-deficient areas like Guangdong Province, Beijing, Tianjin, and Tangshan in Hebei Province.

The country has announced over USD 200 billion to be invested in transmission lines by 2025, as per IEA data. 

The crown jewel of China's HVDC achievements is the Changji-Guquan (also known as Zhundong-Wannan) line, the world's first ±1,100 kV ultra-high-voltage direct current transmission project. This line represents  multiple feats: it operates at the highest voltage level globally, carries the largest transmission capacity at 12,000 megawatts (12 GW), and covers one of the longest transmission distances at 3,324 kilometres.

The 800kV Gansu-Zhejiang DC line started construction in 2024 and is designed to transmit around 4 GW of renewable energy yearly, costing nearly USD 5 billion. 

Recently, China began construction of a massive ultra-high voltage (UHV) power transmission line that will carry clean energy from the Xizang autonomous region in Southwest China across 2,681 kilometres to the Guangdong-Hong Kong-Macao Greater Bay Area in South China. The ±800 kV direct current transmission project involves a total investment of about 53.2 billion yuan (roughly USD 7.5 billion).

United States

The United States is experiencing a surge in electrical demand because of data centres, domestic manufacturing, the electrification of transportation, and increased electrical heating and cooling needs. The 2025 National Electrical Manufacturers Association report, A Reliable Grid for an Electric Future, projects a 50 percent increase in demand by 2050.

The SunZia Transmission Project in the US is a Wind and Transmission project located in New Mexico and Arizona. It will be the largest renewable energy project in the Western Hemisphere once complete next year, and will help deliver 3,000 MW of clean renewable energy generated in New Mexico to communities in Arizona and California. SunZia uses HVDC technology to transport wind power nearly 900 kilometres away, supplying enough clean energy for up to three million homes.

Europe

In Europe, the North Sea is home to several key DC subsea cables for electricity transmission, including the 525 kV Viking Link and the 515 kV North Sea Link, each spanning over 700 km. Recently, TenneT, a European electricity transmission system operator, opened a 2 GW programme for a 525 kV DC offshore cable.

Australia

The prospects are even stronger in Australia. In October 2022, the government of Australia introduced a plan to use subsea high voltage direct current (HVDC) transmission lines to send solar energy from Australia to consumers in Singapore. The total length of the transmission lines is about 2,600 miles (~4200 km). 

Over two stages of development, it aims to deliver up to 4GW of 24/7 green electricity to green industrial customers in Darwin (900MW in Stage 1 and a further approximately 3GW in Stage 2), and 1.75GW to customers in Singapore via a 4,300km subsea cable.

India

India also plans to expand its HVDC infrastructure, as outlined in the latest National Electricity Plan (NEP) for Transmission. The plan includes linking 33 GW through HVDC systems between 2023 and 2032. The Mordor Intelligence report finds that the India HVDC transmission systems market was estimated at USD 3.86 billion in 2025 and is expected to reach USD 5.84 billion by 2030, growing at a CAGR of 8.65 percent.

In 2024, India commissioned a 765 kV line to transmit around 3 GW from Khavada to Bhuj. Another major project scheduled to be commissioned by the end of 2026 is the 800 kV HVDC line to connect Gujarat and Maharashtra, evacuating power from a planned renewable energy zone of up to 8 GW. 

India has already implemented several major HVDC projects. BHEL has executed the North-East Agra ±800 kV, 6,000 MW multi-terminal HVDC link and the ±800 kV, 6,000 MW Raigarh-Pugalur HVDC link.

Cost and Complexity Challenges

Despite the environmental advantages and technical superiority of HVDC for long-distance transmission and offshore wind integration, the economic barrier remains a major deterrent. 

While HVDC systems require significantly higher initial capital costs compared to AC transmission, they become economically superior for long-distance applications.

DC transmission lines themselves are cheaper than AC lines, requiring fewer conductors (two instead of three for three-phase AC) and simpler tower designs. However, the converter stations required to convert AC to DC and back represent substantial investments, with costs that have historically been a barrier to HVDC adoption. 

Additionally, the payback period for HVDC installations tends to be prolonged, often extending over decades, which makes them less attractive for investors seeking short-to-medium-term returns. 

The high cost is compounded by project complexity, as HVDC systems often require extensive feasibility studies, permitting, and environmental assessments. In many cases, cost overruns and schedule delays further undermine financial feasibility

Supply Chain Challenges

The most pressing challenge is the limited production capacity of HVDC converters. These mega projects require High Voltage Direct Current (HVDC) cables running in thousands of kilometers. Yet, only a handful of global manufacturers possess the technical expertise and production capabilities required for HVDC equipment, including Hitachi Energy, Siemens Energy, and GE Vernova. This limited supplier landscape drives up prices due to low economies of scale and exposes developers to supply chain disruptions and price volatility.

The limited number of HVDC equipment suppliers, production capacity bottlenecks for converters and cables, and the lack of standardisation threaten to slow the deployment pace of the HVDC network. Coordinated policy responses - including production-linked incentives, international cooperation on standards, and strategic investments in manufacturing capacity - are essential to scaling HVDC infrastructure at the speed required to meet climate goals. 

For nations like India pursuing ambitious renewable energy targets, HVDC is not optional, but an essential infrastructure. The ability to transmit tens of gigawatts of solar and wind power from resource-rich states to demand centres hundreds of kilometres away will further boost renewable energy integration and equitable distribution of clean energy.