Material Insights · Understanding the Material World

AC transmission and HVDC links

HVDC and AC lines both move bulk power, but DC wins beyond a break-even distance of roughly 300 to 800 km overhead or 50 to 100 km of cable; every DC link starts and ends in an AC grid, so the two are rivals on long routes and partners everywhere else.

AC transmission (energy) and HVDC links (energy): 4 relationships.

How they are linked

1. AC grid feeds DC links

Physical flow · Weak · AC transmission to HVDC links

Converter stations take power from the AC grid, turn it into direct current and send it down the DC line; only a small part of AC grid energy takes this path.

  • 3% of AC transmission energy that flows into HVDC links (site model)

In the site's energy flow model only a few per cent of AC grid power passes through HVDC, because DC is used for specific long or subsea routes. Each converter station loses about 0.6 to 0.8% of the power for classic LCC technology and about 1% for VSC.

Sources: Renewable and Sustainable Energy Reviews (Alassi et al.); Material Insights (Energy Institute, IEA data)

2. DC links return power to AC grids

Physical flow · Strong · HVDC links to AC transmission

At the receiving end a second converter rebuilds alternating current, so almost all HVDC energy ends up back in an AC network.

  • 97% of HVDC energy delivered back to AC transmission (site model)

India's Khavda to Nagpur link shows the pairing: a 6,000 MW, ±800 kV DC line of over 1,200 km feeds a 765/400 kV AC evacuation system at the Nagpur end.

Sources: BHEL; Material Insights (Energy Institute, IEA data)

3. Break-even distance

Substitution · Medium · DC beats AC on long routes

AC lines are cheap at the ends but lose more power and need reactive compensation over distance; DC needs costly converter stations but has lower line losses, so beyond a certain length DC is cheaper.

  • about 300 to 800 km typical break-even distance for overhead lines
  • about 50 to 100 km typical break-even distance for underground or subsea cable

Cables break even much sooner because AC cables need heavy reactive compensation. DC is also the only practical way to link grids that are not synchronised. Below the break-even distance, and for meshed networks with many connection points, AC stays the default. India's Raigarh to Pugalur link carries 6,000 MW over about 1,800 km, well beyond the overhead break-even.

Sources: Renewable and Sustainable Energy Reviews (Alassi et al.); Hitachi Energy

4. Cable and equipment supply

Shared risk · Rising · Both wait on the same suppliers

AC and DC projects draw on a small group of manufacturers for transformers, cables and converters, so a grid build-out strains both at once.

  • over 5 years waiting time for direct current cables
  • up to 4 years lead time for large power transformers
  • about 75% rise in power transformer prices since 2019

The IEA notes that supply of certain grid components is concentrated among a few top-tier suppliers. In India, BHEL won the Khavda to Nagpur terminal stations in partnership with Hitachi Energy in November 2024 and will make the thyristor valves at its Bengaluru plant, which widens the supplier base.

Sources: BHEL; IEA

For investors

Key learnings

  1. HVDC is a niche inside an AC system: it carries a small share of grid energy but wins every long, subsea or cross-border route beyond the break-even distance.
  2. Converter stations and DC cable are the scarce items, with DC cable waits beyond five years, so suppliers of both hold pricing power.
  3. Renewable zones far from demand, such as Khavda in Gujarat, are what drive new HVDC orders, alongside new AC lines at each end.

What to track

  • HVDC project awards (GW, km): New awards show demand for converters and DC cable (As announced · CEA, Power Grid, Hitachi Energy, Siemens Energy)
  • Cable and transformer lead times: Longer lead times delay both AC and DC projects (Annual · IEA grid reports, manufacturer results)

For policymakers

Key learnings

  1. India already runs very long DC links such as the 6,000 MW Raigarh to Pugalur line, and is adding more to move renewable power from remote zones.
  2. Choosing DC or AC is a distance and cost decision; planners should apply break-even tests route by route rather than by default.
  3. BHEL's own thyristor valve production for the Khavda to Nagpur link reduces reliance on a few foreign suppliers whose order books are full.

What to track

  • Inter-regional transmission capacity (GW): Shows how much renewable power can move between regions (Monthly · CEA)
  • Progress on Khavda HVDC and other renewable evacuation links: Delays strand renewable generation (Quarterly · CEA, Power Grid)

India

India runs the 6,000 MW, ±800 kV Raigarh to Pugalur link, about 1,800 km, and has ordered a similar 6,000 MW Khavda to Nagpur link due by 2029 to carry Gujarat renewable power into the AC grid.

Sources

  1. HVDC transmission: technology review, market trends and future outlook, Renewable and Sustainable Energy Reviews (Alassi et al.) (2019)
  2. Raigarh-Pugalur UHVDC link, Hitachi Energy (2021)
  3. BHEL secures order for 800 kV, 6,000 MW Khavda-Nagpur LCC HVDC terminal stations along with AC transmission systems, BHEL (2024)
  4. Building the Future Transmission Grid: executive summary, IEA (2025)
  5. Energy flows, Material Insights, Material Insights (Energy Institute, IEA data)