The global market for power transformers is projected to expand at a CAGR of 8.1% during the forecast period (2023–2031). The major purpose of power transformers is to transmit low-voltage generating electricity through power grid distribution lines. It is a crucial component of the electrical grid that enables the frequency-invariant transfer of power between networks. At low voltage, economic power generation results in high line currents. The transmission of high current results in greater line losses. However, effective power transfer can be achieved by increasing the voltage of the incoming electricity. Consequently, a power transformer is typically employed to increase the voltage. The efficiency of these transformers is optimized at both full load and peak load. As a result of decades of transmission network growth, transmission voltages have increased.
The rise of the global market for power transformers is fuelled by rapid industrialization and rising domestic power demand. Globally, the demand for electricity continues to rise, which has increased the utilization of energy resources. As a result, there are currently more power plants and vast transmission networks in the world. The introduction of new electric vehicles and incentives to use them are driving up the automobile industry's electricity consumption. The majority of power plants are situated in remote locations; generated electricity is transported to substations through HVDC transmission lines before being distributed to end users. The majority of developing nations have underutilized energy resources, and the majority of poorer nations may benefit from an improvement in their power infrastructure. As a result, the worldwide need for electricity is now driving the global market for power transformers.
Transmission lines, poles, switch equipment, and power grids constitute the transmission network. Transmission accounts for the majority of losses in a power system, and boosting transmission voltage is a continual effort to reduce these losses. To prevent transmission losses, electricity is typically transmitted at high voltage (above 115KV). Ultra-High Voltage (UHV) transmission (1100 kilovolts and above) has necessitated an upgrade of the global transmission network.
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Due to the fact that copper, steel, and aluminum comprise the skeleton of transformers, their respective prices as raw materials impact the final selling price. In addition, transportation and installation costs are substantial, accounting for roughly 25% of the overall cost of ownership. The amount of time necessary to manufacture power transformers is another issue. Installation of power transformers requires a substantial supporting infrastructure. Even more expensive are overhead and submerged transformers. There are protection devices installed on all power transformers, including winding thermometers, pressure relays, Buchholz relays, and oil level monitoring devices. In conjunction with the cost of transportation, installation, and supporting infrastructure, the cost of these devices increases the price of a transformer.
Government limits aimed at reducing greenhouse gas emissions are the primary drivers of renewable energy development, followed by clean energy programs. Nuclear, biomass, and geothermal are the key non-conventional energy sources, while wind, sun, and hydroelectricity are the primary renewable energy sources. These new facilities are integrated into the existing transmission networks using power transformers.
The transformer may convert alternating current from a hydroelectric power station to a high-voltage current. Through the national grid, this converted energy is distributed to households and businesses. Furthermore, renewable energy is the fastest-growing energy source in the United States and worldwide. Solar power is anticipated to increase from 11% of all renewable energy produced in the United States in 2017 to 48% by 2050, making it the source of electricity with the highest growth rate.
In 2023, the market size for closed-core power transformers surpassed $6 billion. Due to the fact that power transformers with a closed core can be utilized in a range of voltage configurations, their market share could expand significantly during the next decade. In addition, the primary qualities of the technology, such as its sustainable transformation capabilities and effective operational life expectancy, may offer favorable growth prospects for the closed-core power transformer sector.
In terms of cooling, the market for oil-immersed power transformers is anticipated to increase at a CAGR of greater than 6.1% between 2024 and 2032. In high-tension applications, transformers submerged in oil have a competitive advantage over their contemporaries due to their improved compatibility and cooling performance. In addition, they are easy to install and have adequate cooling capacity, which boosts the acceptability of the technology. In contrast, the susceptibility of these units to leakage may pose health risks and even fire hazards to the operation.
In 2023, the gas insulation segment of the market for power transformers was estimated at $4.2 billion. In substations with limited space, the varied range of uses for gas-insulated power transformers will drive segment sales. These units are able to operate at high temperatures, can be quickly and effectively integrated with gas-insulated switchgear, and pose little environmental and fire risks. The remarkable product attributes may result in positive growth estimates for the power generators industry.
The market for power transformers with ratings of 500 MVA to 800 MVA is predicted to grow at a CAGR of 6.8% by 2031. This growth is a result of the increasing utilization of voltage regulators on long-distance transmission lines. Additionally, the rapid construction of T&D infrastructure and the increased participation of many regions in interregional energy transmission will help to the business' expansion.
In 2023, pole-mounted transformers accounted for more than 31% of the power transformer market due to their numerous advantages, such as their small size and reduced space requirements. In addition, the high product acceptance rates in rural areas and regions with limited grid access and space constraints to ensure adequate voltage supply to residential and commercial buildings will positively influence the industry's sales trajectory.
The market for power transformers used in commercial and industrial applications is anticipated to expand at a CAGR of 7.2% between 2024 and 2032. Transformers are essential to the distribution of electrical systems in commercial buildings because they regulate voltage levels and distribute electrical loads according to their voltage requirements. The expansion of commercial infrastructure, which will be backed by expanding urbanization and strong industrial growth, will increase segment share.
The market's largest contributor, the medium segment is estimated to expand at a CAGR of 8.5% throughout the forecast period. Medium-range transformers have ratings between 100 and 500 MVA. After receiving power from higher voltage levels, medium power transformers change and distribute it to substations with lower voltage or directly to large industrial users. For high and extremely high-voltage communications, medium-grade power transformers are used. The need to modernize transmission lines in order to reduce losses presents a significant market opportunity for these transformers.
The key growth factors for the power transformer market are the global increase in electricity demand and the increasing use of single-phase transformers for electricity distribution. The rise of the single-phase power transformer market will be propelled by the government's attempts to expand the electricity transmission network and rapid rural development. Single-phase transformers are commonly used in applications with precise voltage requirements, such as the mining, naval, and oil and gas industries. This may bode well for the expansion of the market for power transformers.
Asia-Pacific is the major contributor to the global power transformers market and is anticipated to increase at a CAGR of 9.2% over the forecast period. Australia, China, and India are among the Asia-Pacific countries that invest regularly in the power sector to modernize their power infrastructures. The adoption rate in Asia-Pacific is predicted to boost market expansion throughout the projection period. Australia has the highest average solar radiation per square meter, which makes the use of renewable energy a significant role in its growth. China and India, two of the world's fastest-growing economies, are also among the world's major power producers and possess extensive transmission networks. Both countries have prioritized the creation of intelligent grids and the integration of renewable energy sources into their national power systems. One UHV DC transmission network and three UHV AC transmission networks have been developed in China at a large cost. The replacement of old equipment has created an additional opportunity in Asia-Pacific nations.
North America is predicted to expand at a CAGR of 7.5% throughout the projection period. Due to its high adoption rate, North America is anticipated to have greater market growth than other regions. Due to the abundance of power transformer manufacturers, this region can quickly adapt to new technologies. State Grid in China will conduct the Global Energy Interconnection Development and Cooperation Organization (GEIDCO) initiative to combine UHV AC and D.C. transmission. It consists of an east-to-west network of 800 kV UHV DC cables that distribute solar and wind energy across the United States. In contrast, north-south linkages would provide the entire continent access to Canada's huge hydropower plants. A second UHV DC line extending 5,200 kilometers from Mexico to Peru could ease South American energy transfers. Despite the fact that the governments of the United States, Mexico, and Canada are still evaluating the project, such investments position North America to have the potential to boost the global market for power transformers.
General Electric, Toshiba Energy Systems & Solutions Corporation, Hyosung Heavy Industries, Hyundai Electric & Energy Systems Co., Ltd., Schneider Electric, Mitsubishi Electric Corporation, WEG, CG Power & Industrial Solutions Ltd., CelmeS.r.l., Kirloskar Electric Company, Daihen Corporation, Siemens Energy, Hammond Power Solutions, Bharat Heavy Electricals Limited, Grupo Comtrafo, Pfiffner Group, and JSHP T&D are the leaders in the global power industry These industry leaders have participated in a variety of R&D initiatives to deliver efficient and reliable solutions and enhance transformer technology. General Electric, for instance, introduced a variety of power transformers that support renewable energy in January 2023. Transformers such as GE-Mistral-14, 275 kV to 400 kV, two 340 MVA big power transformers, and MBH Power are utilized in the installation of a number of wind farm projects. In power generation, transmission, and distribution, GE's comprehensive array of power transformers with variable voltage levels is utilized. A few examples of competitive activities include:
