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The distribution transformers market is projected to value at USD 6.79 billion with a CAGR of 6.18% between 2023 and 2028. The rising power requirements from various sectors are driving the need for more efficient and reliable power generation, transmission, and distribution systems. Upgradation of power infrastructure is essential to meet these increasing demands and to ensure the reliability and stability of the power supply. Additionally, the expansion of renewable energy generation capacity, driven by environmental concerns and the need for sustainable energy sources, is playing a significant role in transforming the power sector and driving market growth.
Market Forecast 2024-2028
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This report extensively covers market segmentation by End-user (power utilities and industrial and commercial), Type (oil-filled and dry type), and Geography (APAC, North America, Europe, Middle East and Africa, and South America) and geography APAC, North America, Europe, Middle East and Africa, and South America.
The oil-filled segment is estimated to witness significant growth during the forecast period. The use of oil as an insulating medium is increasingly prevalent in the case of distribution transformers. In addition, distribution transformers are mostly located inside the safe perimeters of a substation or a distribution station, and hence, the chances of injuries or fatalities due to any accidents are less when compared with distribution transformers.
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The oil-filled segment was the largest segment and was valued at USD 11.87 billion in 2018. Moreover, a majority of the demand for liquid-immersed distribution transformers originates from the Middle East and APAC. In addition, the growing population and thriving economies have led to expanded electricity coverage in these regions, especially in the Middle East region, fueling the installation of new grid networks. Furthermore, rapid industrial development in India and China has raised the demand for electricity in APAC, leading to increased investment in power infrastructure. Therefore, industrial activities gained momentum, which led to increasing investments in power generation in the US and European countries which has resulted in the expansion of power generation capacities, which increased demand. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period.
Based on the end-user, the segment is classified into power utilities and industrial and commercial. The power utilities segment includes distribution transformers used by power utilities to supply electricity to residential, commercial, and industrial end-users. In addition, the growing global demand for power has ramped up the need for utility grids to invest in power infrastructure. Moreover, while the demand can be met through conventional fossil fuel and renewable power, the transmission and distribution segments require greater intervention as they supply electricity from the point of generation to end-users. Hence, such factors are fuelling the growth of this segment which in turn will drive the market growth during the forecast period.
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APAC is estimated to contribute 45% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. In APAC, the demand in the region can be mainly attributed to the growing need for energy, which has led to generation transmission and distribution projects. Moreover, many countries in APAC have started expanding their distribution networks to meet rising demand. A major chunk of these projects is targeted toward residential projects. These efforts will directly contribute to the demand in the region, which will increase the market growth during the forecast period.
The market is experiencing substantial growth driven by factors such as the increasing energy demand, regulatory reforms, and advancements in technology. These transformers play a critical role in transmitting electricity from the transmission infrastructure to the end-users, especially in remote areas. Their compactness and cost-effectiveness make them ideal for installation in various locations. Oil-filled transformers, a common type, utilize oil as a cooling medium and come in different ratings to handle various loads and overloads. As urbanization and population expansion continue, the demand for electricity rises, prompting investments in distribution transformers to enhance the efficiency of the electrical grid and facilitate the integration of renewable energy sources. This market is particularly prominent in emerging countries looking to improve their transmission and distribution infrastructure and achieve economic efficiency, even as they transition from the fossil fuel to the natural gas sector. Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.
Rising requirements for power from residential, industrial, and commercial sectors is the key factor driving the growth of the global market. The rapid industrial growth in emerging economies such as China, India, Indonesia, Malaysia, Vietnam, Brazil, Argentina, Nigeria, and Ethiopia has spiked demand for energy from the industrial and commercial sectors. Transformers are likely to find high adoption in these countries. The growth in per capita income has resulted in the extensive use of electrical and electronic equipment in these countries, thereby enhancing the demand.
Moreover, developing countries, particularly in Asia and Africa, are expanding and upgrading their power infrastructure in rural and remote areas to address the rising energy demand. A major chunk of the demand from North America and Europe comes from the industrial and commercial sectors, where digitization and automation have led to the widespread use of equipment. Therefore, the rising demand in different end-user sectors is expected to continue to be the major driver for the global market during the forecast period.
Technological advances in distribution transformers are the primary trend in global market growth. A changing network landscape with new energy sources and new loads in terms of distribution requires a high level of flexibility and efficiency. This has given rise to the digitization. As transformers are key parts of a power network, they are witnessing digitization with the help of advanced sensors, monitoring platforms, and software tools. The digitization of offers end-users data points that can help in operating transformers to their full capacity and enable to achievement of predictive maintenance for transformers.
Moreover, the transformer makes use of data collected from sensors to generate actionable data on transformer operations. This includes features such as scheduling maintenance, optimizing system performance, and planning asset replacement. Furthermore, digitization enables optimized grid operation, quicker action, and predictive maintenance. Such advantages drive the growth of the global market during the forecast period.
Volatile raw material prices are a major challenge to the growth of the global market. The raw materials include extrusions, castings, powder metal, metal sheets and strips, forging billets, bar stock, and plastic pellets. The prices of these raw materials vary significantly, given different macroeconomic factors as well as geopolitical reasons. Since these raw materials, particularly steel, copper, and aluminum, are used in nearly all industries, any demand fluctuation in other industries can also cause price changes. Price change also varies with the requirement of different grades of raw materials.
Moreover, the price changes in these materials can also impact the cost. While companies can increase the price of the final products, they cannot always pass on the additional costs to end-users owing to the strong market competition. However, high raw material prices will continue to present a challenge for the market against price volatility. This is expected to restrict the growth of the global market during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ABB Ltd: The company offers distribution transformers such as Power distribution transformers rated up to 1200 kV, Dry and liquid distribution transformers, and Power distribution transformers rated up to 500 kV
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Arkansas Electric Cooperative Corp., Bharat Heavy Electricals Ltd., Celme Srl, CG Power and Industrial Solutions Ltd., Eaton Corp. Plc, EL Sewedy Electric Co., Emerson Electric Co., Fuji Electric Co. Ltd., General Electric Co., Hitachi Ltd., Hyosung Corp., IMEFY GROUP, Lemi Trafo JSC, Mitsubishi Electric Corp., Ormazabal, Schneider Electric SE, Siemens AG, Toshiba Corp., and Wilson Transformer Co. Pty Ltd.
Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is driven by factors like valuation and power demand in various sectors. With increasing technology penetration, there's a focus on smart grids and modern infrastructure. Installation features and capacity addition plans cater to commercial purposes and industrial users. The market emphasizes renewable power infrastructure and grid standardization to meet high electricity demand. Different voltage options, including low voltage and medium voltage, cater to diverse power distribution needs. Insulation types such as oil immersed ensure efficient distribution, while liquid immersed type transformers are crucial for global distribution. Despite technological constraints and cost constraints, the market thrives on innovative solutions for efficient power distribution.
The market is influenced by various factors, including family income affecting consumer spending on electricity. The transmission & distribution infrastructure plays a crucial role in ensuring efficient power supply to homes and businesses. Tech firms are driving innovations in the electrical distribution network, leading to advancements like pad-mounted transformers and retrofitting solutions. With increasing electricity demands and the rise of renewable generation, there's a need for transformers with higher power ratings and suitable insulating and mounting types. Distribution substations are pivotal in managing power distribution capacity and ensuring reliable electricity supply, especially in areas with high electricity demand.
Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.18% |
Market Growth 2024-2028 |
USD 6.8 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.41 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 45% |
Key countries |
US, China, India, Japan, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., Arkansas Electric Cooperative Corp., Bharat Heavy Electricals Ltd., Celme Srl, CG Power and Industrial Solutions Ltd., Eaton Corp. Plc, EL Sewedy Electric Co., Emerson Electric Co., Fuji Electric Co. Ltd., General Electric Co., Hitachi Ltd., Hyosung Corp., IMEFY GROUP, Lemi Trafo JSC, Mitsubishi Electric Corp., Ormazabal, Schneider Electric SE, Siemens AG, Toshiba Corp., and Wilson Transformer Co. Pty Ltd. |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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