Liquid-Immersed Transformers Market Analysis APAC, North America, Europe, Middle East and Africa, South America - US, China, India, Japan, Germany - Size and Forecast 2023-2027

Liquid-Immersed Transformers Market Forecast 2023-2027

The Global Liquid-Immersed Transformers (LIT) Market is forecast to increase by USD 10.74 billion at a CAGR of 5.86% between 2022 and 2027. The growth of the market depends on several factors, including the expansion of transmission and distribution systems (T&D), the modernization of existing transformers, and the increasing investment in renewable energy sources. Additionally, the market is driven by the demand for electrical energy and the need for efficient power-generating sources. Voltages, mineral oil, and renewable sources like solar, wind, hydroelectric, fossil fuels, and geothermal play crucial roles in the market. This market analysis and report includes an in-depth analysis of the key market drivers, trends, and challenges during the forecasted period. 

What will be the size of the Liquid-Immersed Transformers Market During the Forecast Period?

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The market thrives on diverse power generating sources and user-end applications. These transformers play a crucial role in stepping up or stepping down voltages to mitigate transmission losses. With variants like dry and oil-immersed transformers catering to industrial processes, maintenance and lifespan considerations influence economic costs and electricity consumption trends.

Market Segmentation

This report extensively covers market segmentation by type (power transformers and distribution transformers) and application (commercial power, residential power, and industrial power). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021. In the market, transformers cater to diverse sectors like commercial, service, residential, and industrial. Equipped with IoT technology, they optimize energy management in commercial settings and ensure reliable power supply in the service sector. In residential areas, they provide stable electricity, while in industries, they power machinery. Amid concerns over climate change and fossil fuels, these transformers facilitate the transition to greener energy sources like solar power, aiding in electrical energy transmission and distribution. Overall, they play a pivotal role in enabling reliable and sustainable energy supply worldwide.

By Type Insight

The market share growth by the power transformers segment will be significant during the forecast period. The use of oil as an insulating medium is more widely prevalent. Power 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. However, due to better-insulating properties and other characteristics, SF6 gas, which is non-flammable and non-polluting, is also used for insulation, but it is more expensive. Therefore, the use of this type of transformer is restricted in developing nations, and hence, oil continues to be the dominant category of insulation used inside power transformers.

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The power transformers segment was valued at USD 19.10 billion in 2017 and continued to grow by 2021. Much of the demand originates from the Middle East and APAC. Growing population and thriving economies have led to expanded electricity coverage in these regions, especially in the Middle East, fueling the installation of new grid networks. Also, rapid industrial development in India and China has raised the demand for electricity in APAC, leading to increased investment in power infrastructure. The replacement of older power transformers is gaining considerable traction in North America and Europe. Following the recovery from the 2008-2009 global financial crisis, industrial activity in the US has gained considerable momentum, especially after 2013. This has driven energy demand in the country, which bodes well for the growth of this segment.

Market Dynamics and Customer Landscape

The market is experiencing significant growth driven by the widespread adoption of IoT technology and the urgent need for energy management solutions across various sectors. With a focus on reducing carbon footprint and mitigating climate change, industries are transitioning away from fossil fuels towards renewable energy sources like solar power. They play a vital role in energy transmission and distribution, efficiently stepping up or stepping down voltages to meet user end requirements. These transformers, whether oil-filled or dry, help minimize transmission losses and ensure reliable electricity consumption, contributing to sustainable industrial processes while offering economic benefits and extended maintenance life spans. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Major Market Driver

The expansion of T&D driving the demand for LIT is the key factor driving the market growth. India has one of the fastest rates of urban development globally due to rapid population growth and rising disposable incomes. China is also experiencing a similar urbanization trend. With half a billion people expected to move to urban areas during 2013-2025, the National Development and Reform Commission in China has planned to invest trillions of dollars in building urban infrastructure. In 2040, Urbanization in China is expected to double that of India on a percentage basis. Among the other world regions, South America is experiencing major economic changes, especially in Brazil, which is among the top developing nations globally.

In addition to industrial development and rapid urbanization, the manufacturing sector in these regions is exhibiting considerable potential for growth. Thus, these countries would become hubs for the major manufacturing industries, which will lead to high demand for electricity. This has spurred activity among private and public power sector companies in many regions to commence projects of planned network capacity expansion. These projects show that there is a significant increase in electricity demand. As these projects entail the setting up of several power stations, substations, and distribution stations, they will result in the need for more step-up and step-down power transformers and distribution transformers. Hence, such factors drive the growth of the market in focus during the forecast period.

Significant Market Trends

The increasing popularity of bio-based and naphthenic transformer oil is the primary trend in the global LIT market growth. Bio-based oil is incombustible and has non-toxic attributes, which have increased its use in transformers. The market share for bio-based oil is anticipated to increase in the future. Countries worldwide, especially in North America, have started using bio-based transformer oil. The overall demand for naphthenic oil is expected to increase during the forecast period. The demand mainly arises from the automotive and construction industries. Naphthenic and paraffinic oils are popularly used as base oil in the production of transformer oil and lubricant base stock.

Moreover, naphthenic oil is used as a metalworking fluid and accounts for more than 36% of the total oil market in the metalworking segment. Metal shaping and forming processes, including structural steel, automotive body panels, and other components, require naphthenic oil. Such bio-based and naphthenic transformer oils are expected to increase the efficiency and lifespan of transformers. Therefore, such a trend is expected to positively impact the market during the forecast period.

Major Market Challenge

New regulations increasing the cost of power transformers are a major challenge to the global LIT market growth. Europe and the US are the two markets where regulations pertaining to energy efficiency in power transformers have become stringent over the years. The regulation was updated in 2021 with more stringent standards. In India, the Ministry of Power has been following the IS 1180:2014 norms since 2014 to reduce distribution transformer losses. New ones need to comply with the IS 1180 part 1 guidelines.

While the regulations mentioned above improve the efficiency of distribution transformers to enable energy savings, their enforcement increases the cost of power transformers amid the use of high-quality electrical sheets and larger transformers. Therefore, as regulations get upgraded, they put upward pressure on prices for the manufacturers of power transformers in several countries. This will hinder the growth of the market in focus in terms of revenue generation during the forecast period.

Customer Landscape

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

 Market Customer Landscape

Who are the Major Market Companies?

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.

ALTRAFO Srl - The company offers such as oil-insulated-transformers. Also, this segment focuses on manufacturing power, distribution, and speciality-transformers.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• ABB Ltd.
• Celme Srl
• CG Power and Industrial Solutions Ltd.
• China XD Group
• DuPont de Nemours Inc.
• Eaton Corp. Plc
• EL Sewedy Electric Co.
• General Electric Co.
• Hitachi Ltd.
• Hyosung Heavy Industries Corp.
• Hyundai Heavy Industries Group
• IMEFY GROUP
• ISMET GmbH
• LS ELECTRIC Co. Ltd.
• MGM Transformer Co.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Regional Analysis

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APAC is estimated to contribute 40% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. APAC is expected to drive the demand during the forecast period. Much of the T and D expansion has been taking place in the region. Countries like China, India, Vietnam, Thailand, and the Philippines have been exhibiting increased demand for electric power every year. This is due to the rise in the urban population and the growing significance of the industrial sector (such as the rise of the manufacturing sector in India). This leads to increased installation and expansion of T and D equipment, such as power and distribution transformers, within the existing grid to expand the network, which will help generate significant demand.

Market Analyst Overview

The market is witnessing substantial growth owing to various factors such as the increasing demand for electricity in residential, commercial, and industrial applications, coupled with the rise of renewable and smart energy grids. These, filled with liquids like oil, offer higher capacities and efficiencies, ensuring robust performance even in harsh environments. With additional insulation and cooling methods such as fans, they mitigate fire hazards and extend their lifespan. As electricity consumption continues to escalate globally, driven by factors like population growth and investments in electricity generation, the demand for liquid-filled transformers is poised to surge further. Moreover, advancements in smart grid technology and the transition towards clean and smart energy sources further propel the market's expansion. 

In the realm of the market, IoT technology is revolutionizing operations by enabling remote monitoring and predictive maintenance, particularly in industrial processes. They play a vital role in energy management across sectors, including the commercial sector, service sector, and residential sectors, addressing concerns related to climate change and greenhouse gases emissions. With a growing emphasis on sustainable energy solutions, such as solar power, liquid-immersed transformers act as crucial power generating sources. They mitigate transmission losses and enhance efficiency at the user end, while technologies like dry transformers further contribute to reducing maintenance requirements and extending the life span, all while considering the economic costs involved in their deployment.

The market plays a pivotal role in facilitating the transition towards a sustainable energy future by supporting various renewable energy sources such as wind power, hydro power, and geothermal power. As the world moves towards energy independence and seeks to enhance resilience and energy security, liquid-immersed transformers provide essential infrastructure for efficient energy distribution. These transformers enable effective transformer management and are integral components of smart grid technologies that optimize energy transmission and consumption. Moreover, they contribute to eco-friendly solutions by minimizing environmental impact and conserving finite resources. In essence, liquid-immersed transformers are indispensable for realizing a greener and more sustainable energy landscape.

Segment Overview

The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Type Outlook 
  • Power-transformers
  • Distribution-transformers

• Application Outlook 
  • Commercial-power
  • Residential-power
  • Industrial-power

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Scope
Report Coverage	Details
Page number	166
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 5.86%
Market growth 2023-2027	USD 10.74 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	5.67
Regional analysis	APAC, North America, Europe, Middle East and Africa, and South America
Performing market contribution	APAC at 40%
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., ALTRAFO Srl, Celme Srl, CG Power and Industrial Solutions Ltd., China XD Group, DuPont de Nemours Inc., Eaton Corp. Plc, EL Sewedy Electric Co., General Electric Co., Hitachi Ltd., Hyosung Heavy Industries Corp., Hyundai Heavy Industries Group, IMEFY GROUP, ISMET GmbH, LS ELECTRIC Co. Ltd., MGM Transformer Co., Schneider Electric SE, Siemens AG, Toshiba Corp., and Vantran-Transformers
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 forecast period.
Customization purview	If our market growth analysis 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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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive themarket growth and forecasting between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market report
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across APAC, North America, Europe, Middle East and Africa, and South America
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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