The power transformer market exhibited year-on-year growth of 4% in 2021, backed by increasing efforts towards incorporating modern energy solutions in existing power systems and high demand for efficient and reliable power supply. Future Market Insights (FMI) states that power transformer market revenue grew by 10% between 2019 and 2021, reaching US$ 21.9 billion in 2021 with a healthy CAGR of 4.6%.
Power transformers are integral components within power grids as they assist in power transmission between networks without change in frequency and minimum loss. Increasing investments towards the expansion of power grid networks and distribution channels to enable electricity access in remote areas will fuel the demand for power transformers in the forthcoming years.
Focus on upgrading the existing power grid network with modern energy technology for a flexible, secure, efficient, and reliable supply of power will emerge as a chief growth driver.
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Transformers are a critical component in a power transmission system as their main function is to receive power with low voltage and transmit it across various distribution channels in the power grid. Increasing demand for electricity and increasing investment to expand transmission and distribution networks will drive the power transformer market growth in the upcoming years.
For instance, as of 2021 Adani power has around 5 ongoing power projects with capacities ranging from 1300 MW to 2700 MW in the Indian states of Rajasthan, Madhya Pradesh, Gujarat, Karnataka, and Jharkhand. The rise in the number of new power projects in developing countries will boost market sales over the forecast period.
The rising urgency to replace the ageing power infrastructure with a smart grid system along with increasing penetration of renewable energy and the development of interconnected grid infrastructure are key growth drivers in developed economies.
Prospects look promising for the power transformer market due to thriving construction and mining industries, the emergence of new smart cities with modern power transmission systems and the adoption of green transformers.
Market players are focusing on developing power transmission systems capable of handling the flow of stored and renewable energy throughout the grid system. Advancement towards designing systems for efficient management of electricity transmission and distribution as a part of disaster recovery efforts along with redefining electrical grids to reduce operational costs and lead times will positively influence the market growth in the future.
Key Takeaways from FMI’s Power Transformer Market Study
- North America’s power transformer market is forecast to experience growth at 3% CAGR due to the rising necessity to replace old power grid networks with modern and efficient equipment and the increasing supply and demand gap of electricity in the U.S. and Canada.
- Europe’s power transformer market is anticipated to grow at 3.2% CAGR during the forecast period. The growth uptick can be attributed to rapid electrification and increasing investment towards upgrading transmission and distribution networks in the region.
- Growing awareness among the population regarding CO2 emission, increase in consumption of electricity, and increasing efforts towards electrification of rural areas will drive the demand for power transformers in India.
- China is expected to offer lucrative opportunities owing to increasing investment in power grid infrastructure development and booming mining and oil and gas industries in the country.
- Japan and South Korea account for 7% of the global power transformer market share in 2021. Industrialization, increasing efforts to fill the energy supply and demand gap, and imposition of energy-efficient laws and standards are key growth drivers in these countries.
“Increasing demand for upgrading traditional transmission system to sustain high voltage power transfer and incorporation of smart grids will boost the demand for power transformer in upcoming years,” says the FMI analyst.
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Who is Winning?
Future Market Insights highlights the key trends emerging in the power transformer market and discusses the strategies employed by market players to strengthen their market position.
Leading market players account for 35% global market share. They are focusing on new product development like green transformers to reduce the carbon footprint and are also emphasizing establishing production and supply operations in key high-demand demographics like South East Asia. In addition, key players have been increasing production outputs and moving manufacturing plants to develop countries to reduce lead times and operation costs.
Prominent players operating in the power transformer market are:-
- ABB
- General Electric
- Siemens AG
- Toshiba Corporation
- Schneider Electric
For instance, in July 2021, General Electric won orders for manufacturing 45 units of 765 kV transformers from Power Grid Corporation of India Limited (PGCIL) for the new substations to be constructed in Rajasthan, India. The new transformers will dissipate around 8.1gigawatt (GW) of green power from the state’s solar energy zones.
In March 2021, First Philec Inc. announced it to launch a super green transformer by the end of 2021. First Philec Inc. is a unit of First Philippine Holdings Corp. and one of the leading manufacturers of high-efficiency transformers in the South East Asia region. The super green transformer will be made of recyclable and biodegradable materials.
Hitachi ABB Power Grids launched two new traction transformers, “RESIBLOC® Crail 25 kV” and “Natural Cooling Effilight® Traction Transformer” in June 2021. The latter model replaces the traditional cooling module with natural airflow system. It uses a state-of-the-art cooling system that harnesses natural airflow from the train’s motion and sends it to the heat exchanger thus eliminating the need for air fans.
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Future Market Insights (ESOMAR certified market research organization and a member of the Greater New York Chamber of Commerce) provides in-depth insights into governing factors elevating the demand in the market. It discloses opportunities that will favour the market growth in various segments based on Source, Application, Sales Channel and End-Use over the next 10 years.
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