Transformers Market Forecast 2022-2027
The transformers market is primarily driven by rising power consumption due to increasing population and a global trend toward renewable-based power generation and related transmission infrastructure changes. However, the market expansion is projected to be hampered shortly by constraints such as high startup prices.
The transformers market is expected to grow at a CAGR of more than 6.5 percent during the forecast period. Due to a significant drop in power demand from the industrial and commercial sectors, the COVID-19 pandemic substantially impacted the transformers market growth, resulting in halts in planned power distribution projects and delays in under-construction projects. These project halts resulted in lower demand for power distribution equipment and negative growth for equipment manufacturers.
- Due to the global expansion in load centers, the distribution transformer sector is expected to dominate the transformers market over the forecast period.
- The transformers industry benefits from technological advancements such as smart transformers for smart grids. Electrical transformers are developed in a power supply system, and you can access smart transformers remotely.
- Due to rising electricity consumption in rural and semi-urban areas, the Asia-Pacific region will likely dominate the market in the following years.
Key Market Trends
The market is expected to be dominated by distribution transformers.
- The final voltage transformation in the electric power distribution system is handled by distribution transformers (DTs). DTs are used to lower the voltage in distribution lines (typically up to 36 kV) to a level the customer can handle (usually ranging from 250 up to 435V).
- Due to the expansion of electricity transmission and distribution projects in many countries, transformer capacity has continuously expanded in recent years. For example, transformer capacity reached 1,14,807 MVA in Mexico’s distribution network in 2020. Many other countries also increased their transmission networks, deploying many distribution transformers.
- Imefy, a European pioneer in transformer manufacture, was awarded a contract by Enedis, a French power distribution company, to provide Cast Resin Distribution Transformers in April 2021. The agreement was signed for the next three years, possibly extending for another two years.
- Enel, an Italian power provider, revealed plans to enter the power distribution sector in the United States in April 2021. Over the following two years, the corporation plans to invest EUR 16.2 billion (USD 19.52 billion) in distribution networks, with EUR 60 billion (USD 72.23 billion) by 2030.
As a result of these changes, the distribution transformer market is expected to multiply soon.
The Asia-Pacific Market Will Dominate
- Many Asian countries have seen their power distribution networks expand to serve electricity-deprived people and strengthen the existing power infrastructure in semi-urban areas.
- China and India have enormous power consumption. In 2020, India’s power usage was 1191 TWh, whereas China’s was 6752 TWh. China will expand its electrical networks in the future years.
- A new tender for digital 3-phase distribution transformers for Madhya Pradesh’s state electricity distribution grid was published in January 2022.
- In June 2021, State Grid Corporation of China (SGCC) began experimenting with DC power distribution at Pangdong DC central station, recently operational by SGCC subsidiary State Grid Jiangsu Electric Power Co. Ltd. The new Pangdong station can converter 10KV AC to 10KV DC and offer all voltage levels.
- Due to these factors, Asia-Pacific is likely to dominate the transformers market over the forecast period.
Construction spending and industrial production drive demand. Individual company profitability depends on efficient manufacturing and purchasing economies of scale. Large corporations can provide utility and industrial customers with a wide range of transformer products, and small businesses can compete by providing industrial and consumer goods clients with innovative products. The transformer market is highly fragmented around the world.
IMEFY, one of Europe’s leading transformer manufacturers, was awarded a contract to supply over 250 transformers to Energa, a Polish power grid operator, in July 2021.
The largest state-owned transmission company in India, Power Grid Corporation of India Limited (PGCIL), awarded GE Renewable Energy’s grid solutions unit numerous orders for 765 kV transformers and reactors in July 2021. During the forecast period, the contract will be in operation.
The worldwide transformer manufacturing industry is highly competitive and fragmented with many well-established companies. These companies use various effective techniques to keep ahead of the competition while catering to changing demands of their customers, such as research and development, global expansions, strategic partnerships, product launches, and so on.
Power Rating (Large, Medium, and Small), Cooling Type (Oil-cooled and Air-cooled), Transformer Types (Power Transformer and Distribution Transformer), and Geography(North America, Asia-Pacific, Europe, South America, and Middle-East and Africa) are all segments of the Transformer Market.