The global market for power transformers is anticipated to expand at a CAGR of 8.1% over the forecast period (2023–2031). The primary function of power transformers is to transport low-voltage generator electricity through distribution channels within the power grid network. It is a fundamental component of the electrical grid that facilitates the frequency-invariant transmission of electricity from one network to another. Economic power generation at low voltage leads to high line currents. High current transmission causes increased line losses. However, effective power transmission is achievable if the voltage of the incoming power is increased. Therefore, a power transformer is mostly used to boost the voltage. These transformers are designed for optimal efficiency at full load and peak load. Transmission voltages have increased as a result of decades of transmission network development.
Rising Global Electricity Demand
Rapid industrialization and rising domestic power demand are driving the expansion of the global market for power transformers. Globally, the demand for power is continually increasing, which has boosted the utilization of energy resources. Consequently, there are now more power plants and large transmission networks throughout the world. The development of new electric vehicles and incentives to utilize them are increasing the automobile industry's electricity usage. The majority of power plants are located in remote places; the generated electricity is carried to substations via HVDC power transmission lines before being supplied to end consumers. The majority of developing nations have underused energy resources, and the majority of poorer nations may benefit from improved power infrastructure. Consequently, the global need for electricity is now driving the global market for power transformers.
Upgrading Existing Transmission Systems
The transmission network is comprised of transmission lines, poles, switch equipment, and power grids. The majority of losses in a power system are attributable to transmission, and increasing the transmission voltage is an ongoing attempt to reduce these losses. Typically, electric power is transported at high voltage to avoid transmission losses (above 115KV). Ultra-High Voltage (UHV) transmission (1100 kilovolts and higher) has prompted a global transmission network upgrade.
India has the ability to transport electricity at 1200KV, while China has been employing UHV DC/AC transmission since 2009. The power transformer is an essential component for joining two networks with different voltages. Transformers connect diverse networks within the power system. Consequently, greater transmission voltages are driving the need for power transformers with larger ratings.
Costly installation, logistics, and supporting infrastructure for transformers
Since copper, steel, and aluminum compose the skeleton of transformers, their respective pricing as raw materials affects the final price of the product. In addition, logistics and installation expenses are considerable, accounting for approximately 25% of the total cost of ownership. Another obstacle is the length of time required to produce power transformers. Power transformers require a significant supporting infrastructure for installation. This expense is even greater for overhead and submerged transformers. All power transformers have protective devices fitted, such as winding thermometers, pressure relays, Buchholz relays, and oil level monitoring devices. Consequently, the cost of these devices, in conjunction with the cost of transportation, installation, and supporting infrastructure, increases the price of a transformer.
Increasing Utilization of Alternative and Renewable Energy Sources to Open New Avenues
The primary drivers of renewable energy production are government restrictions to minimize greenhouse gas emissions, followed by clean energy programs. The principal nonconventional energy sources are nuclear, biomass, and geothermal, whereas the primary renewable energy sources are wind, sun, and hydroelectricity. Using power transformers, these new facilities are incorporated into the existing transmission networks.
Alternating current from a hydroelectric power plant can be converted to high voltage current by the transformer. This transformed energy is distributed to households and businesses through the national grid. Additionally, renewable energy is the fastest-growing energy source in the United States and globally. Solar power is projected to climb from 11% of all renewable energy produced in the United States in 2017 to 48% by 2050, making it the fastest-growing source of electricity.
Transformers are a vital component of the power networks for all non-conventional energy sources, not just wind and solar power plants. In addition to being able to be put underground and underwater, power transformers can be installed at the point of generating for tidal and geothermal power plants. Consequently, the global market for power transformers has long-term growth potential as renewable energy becomes a substantial energy source.
Closed Core Power Transformer Dominated the Market
In 2023, the closed core power transformer market size exceeded $6 billion. In light of the fact that power transformers with a closed core can be utilized in a variety of voltage settings, their market share may increase substantially over the next decade. In addition, the technology's main characteristics, such as sustainable transformation capabilities and effective operational life expectancy, may provide good growth prospects for the closed-core power transformer industry.
Oil-Immersed Transformers to Generate Profitable Revenue
In terms of cooling, the market for oil-immersed power transformers is projected to expand at a CAGR of over 6.1 % through 2031. Transformers immersed in oil give a competitive edge over their contemporaries due to their superior compatibility and cooling performance in high-tension applications. In addition, they are simple to install and have an optimal cooling capacity, which increases the technology's acceptance. In contrast, the sensitivity of these units to leakage may result in health problems and even fire threats to the operation.
The Gas Insulation Market Will Emerge as A Major Development Driver
The gas insulation section of the power transformer market was valued at $4.2 billion in 2023. The diverse range of applications for gas-insulated power transformers in substations with restricted space will drive segment sales. These units can work at high temperatures and can be swiftly and effectively integrated with gas-insulated switchgear, all while posing a reduced risk of environmental and fire dangers. The exceptional product characteristics may generate optimistic growth projections for the power generators business.
Long-Distance Power Transmission Requirements to Stimulate Demand for Transformers With > 500 MVA to 800 MVA
The market for > 500 MVA to 800 MVA-rated power transformers is anticipated to expand at a CAGR of 6.8% during the forecast period. This expansion is attributable to the expanding use of voltage regulators on long-distance transmission lines. In addition, the rapid construction of T&D infrastructure and the increased participation of multiple regions in interregional energy transmission will contribute to the expansion of the business.
The Pole-Mounted Segment Will Constitute a Sizeable Proportion of The Market
In 2023, the pole-mounted category represented more than 31% of the power transformer market due to the numerous benefits associated with pole-mounted transformers, such as their small footprint and minimal space needs. In addition, the high product acceptance rates in rural areas and regions with limited grid access and space constraints to ensure appropriate voltage supply to residences and business facilities would positively impact the sales trajectory of the industry.
Increasing Product Demand for Commercial and Industrial Uses by Expanding Urban Infrastructure
Between 2023 and 2031, the market for power transformers used in commercial and industrial applications is projected to grow at a CAGR of 7.2%. Transformers are essential to the distribution of electrical systems in commercial buildings, as they adjust voltage levels and distribute electrical loads based on their voltage requirements. Increased segment share will result from the expansion of commercial infrastructure, which will be supported by rising urbanization and rapid industrial growth.
Medium Segment to Dominate Market by Rating Analysis
The medium segment is the market's largest contributor and is anticipated to expand at a CAGR of 8.5% over the projected period. Transformers with a medium rating range between 100 and 500 MVA. After receiving energy from higher voltage levels, medium power transformers transform and distribute it to lower voltage substations or straight to large industrial customers. Medium-grade power transformers are utilized for high and extra-high-voltage transmissions. The requirement to modernize transmission lines in order to reduce losses creates a substantial market opportunity for these transformers.
Single Phase Power Dominates the Market by Phase
The primary growth drivers for the power transformer market are the global increase in electricity demand and the growing use of single-phase transformers in the distribution of electricity. Government efforts to extend the electricity transmission network and fast rural development will drive the expansion of the single-phase power transformer market. Due to their safety advantages over liquid-filled transformers, single-phase transformers are widely employed in applications with precise voltage requirements, such as mining, marine, and oil and gas industries. This could auger well for the expansion of the power transformer market.
The Asia-Pacific Region Dominates the Global Marketplace
Asia-Pacific is the largest contributor to the global market for power transformers and is projected to expand at a CAGR of 9.2% over the forecast period. Australia, China, and India are among the Asia-Pacific nations that routinely invest in the power sector to modernize their power systems. Asia-strong Pacific's adoption rate is anticipated to stimulate market growth throughout the forecast period. Australia receives the highest average solar radiation per square meter, making renewable energy use an important growth factor. China and India, two of the world's fastest-growing economies, are also among the leading producers of power and have substantial transmission networks. Both nations have prioritized the development of intelligent grids and the incorporation of renewable energy sources into the national power grid. China has made substantial expenditures in the development of one UHV DC transmission network and three UHV AC transmission networks. In Asia-Pacific nations, the replacement of obsolete equipment has created an extra opportunity.
During the forecast period, North America is anticipated to increase at a CAGR of 7.5%. As a result of its high adoption rate, North America is expected to have greater market expansion than other regions. Due to the existence of numerous power transformer producers, this region can adapt fast to new technology. State Grid in China will implement a project by the Beijing-based Global Energy Interconnection Development and Cooperation Organization (GEIDCO) to merge UHV AC and D.C. transmission. It involves an east-to-west network of 800 kV UHV DC cables that share solar and wind energy extensively across the United States. In contrast, north-south links would provide access to Canada's vast hydroelectric plants for the entire continent. A second UHV DC line spanning 5,200 kilometers from Mexico to Peru could facilitate energy exchanges with South America. Despite the fact that the U.S., Mexico, and Canadian governments are still assessing the project, such investments position North America to present the potential for expanding the worldwide market for power transformers.
Innovation to Remain as the Key to Increase Market Shares
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 leading companies in the global power These industry leaders have engaged in a number of R&D projects to provide efficient and dependable solutions and advance transformer technology. In January 2023, for instance, General Electric introduced a variety of power transformers that support renewable energy. Numerous wind farm projects are installed using transformers such as GE-Mistral-14, 275 kV to 400 kV, two 340 MVA large power transformers, and MBH Power. GE's extensive selection of power transformers with varying voltage levels is utilized in power generation, transmission, and distribution. A few examples of market developments include:
In August 2023, Siemens Mobility revealed its brand-new digital business platform, Siemens Xcelerator, at InnoTrans 2023. Siemens Xcelerator is an open digital business platform designed to create a robust ecosystem of partners that can collaborate to promote digital transformation and sustainability at scale in the mobility industry.
As the demand for green energy develops in May 2023, Schneider Electric contemplated forming collaborations with Indian companies. Indian businesses are interested in forming ties with the French multinational Schneider Electric, a provider of energy management and industrial automation solutions to businesses worldwide.
Historical & Forecast Period
This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.
The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.
Research Methodology
The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Power Transformers market are as follows:
Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.
| ATTRIBUTE | DETAILS |
|---|---|
| Research Period | 2022-2032 |
| Base Year | 2023 |
| Forecast Period | 2024-2032 |
| Historical Year | 2022 |
| Unit | USD Million |
| Segmentation | |
Core
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Winding
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Cooling
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Insulation
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Rating
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Mounting
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Application
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Phase Type
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Region Segment (2022-2032; US$ Million)
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Key questions answered in this report
