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The Global Power Transformers Market size is estimated to grow by USD 11,575.07 million between 2022 and 2027 accelerating at a compound annual growth rate (CAGR) of 6.15%. The growth of the power transformer market depends on several factors, including the modernization of existing transformers, expansion of T&D driving the demand for power transformers, and expansion of renewable power generation capacity.
This power transformers market research report extensively covers market segmentation by type (liquid immersed and dry type), end-user (commercial power, residential power, and industrial power), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges.
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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.
The modernization of existing transformers is notably driving the power transformer market growth. Factors such as the increase in the installation of new transformers and the replacement of old transformers with new ones are fueling the growth of the global market. The majority of the T&D infrastructure globally needs renovation, mainly because the existing networks are unable to meet the growth in the demand for power. For instance, in Russia, Chelyabenergo, a subsidiary of the utility interregional distribution grid companies (IDGC), completed its reconstruction work on the 110/10 kV Miass substation in the Urals in 2015. The reconstruction included the replacement of the major systems and components, including replacing the old 6.3 MVA transformers with new 16 MVA transformers. Such factors are expected to drive the demand for power transformers.
Smart grid networks are also being increasingly used in many countries. A smart grid refers to an electricity network that delivers an economical, sustainable, and secure electricity supply by intelligently integrating the actions of all users, whether they are consumers, generators, or those capable of both in an efficient manner. The use of smart grid systems has enabled utilities to focus on the installation of more power transformers for the effective transmission of electric power. Thus, the need for transformer oil is also increasing, with more transformers being installed into the grid. Therefore, these factors will lead to significant growth in the global market during the forecast period.
The digitalization of transformers is an emerging trend in the power transformer market. A changing power network landscape with new energy sources for power generation and new loads in terms of distribution requires a high level of flexibility and efficiency. This has given rise to the digitization of power network assets. As distribution 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 distribution transformers offers end-users data points that can help in operating transformers to their full capacity and in achieving predictive maintenance for transformers.
The digitization of transformers enables optimized grid operation, quicker action, and predictive maintenance. All relevant stakeholders in the power network value chain can remain updated on the health of a transformer, thus maintaining standardization and reducing unplanned outages. The use of data visualization tools for analytical purposes further expedites the need for digitization in transformers. Such advancements are witnessing rapid penetration in the distribution transformers market. With increasing competitive intensity in the global market, the digitalization of power transformers is expected to play a significant role in the growth of the market during the forecast period.
The volatility in raw material prices is a major challenge impeding the power transformer market growth. The primary material used in power transformers is steel. Copper and aluminum make the other parts of power transformers and are used as coatings for primary coils. Since vendors in the market cater to multiple end-users, they purchase raw materials in different forms as per their requirements. They 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 are used in nearly all industries, any demand fluctuation in other industries can also cause price changes.
Owing to such volatility in raw material prices, several manufacturers, including power transformers manufacturers, are uncertain about raw material procurement plans, resulting in a supply-demand imbalance. This is expected to restrict the growth of the global market during the forecast period.
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.
Global Power Transformers Market Customer Landscape
Vendors 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.
Tyree Industries - The company under this segment focuses on manufacturing pole mount transformers, large distribution transformers, power transformers, and substation assembly. The key offerings of the company include power transformer solutions.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the liquid-immersed segment will be significant during the forecast period. The use of oil as an insulating medium is more widely prevalent in the case of power transformers. 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 liquid-immersed segment was valued at USD 19,660.24 million in 2017 and continued to grow until 2021. Much of the demand for liquid-immersed power transformers 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. In addition to the new installation, the replacement demand for liquid-immersed power transformers is witnessing growth across the regions, especially in North America and Europe. Post-financial crisis in 2008, industrial activities gained momentum, which led to increasing investments in power generation in the US and European countries. This led to the expansion of power generation capacities, which resulted in the replacement of the existing power transformers with high-efficient power transformers. Therefore, such factors are expected to drive the liquid-immersed power transformers segment of the global market during the forecast period.
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APAC is estimated to contribute 37% 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.
The market demand for electricity in APAC remains high due to the growing electricity consumption in the region. Rapid urbanization and better living standards are boosting electricity consumption in major countries such as China and India. Several utilities in the region are now operated by private players to ensure the efficient production and distribution of electricity. Such expansion by the private sector into the power generation sector has reduced the total price of electricity and intensified market competition in the power sector. The continuous supply of electricity has become crucial due to the improvement in economic conditions in the region. This is positively influencing the market growth in the region.
China expects to expand its T&D network by almost half a million circuit kilometers (Ckm). This will prompt the government and utility companies to connect the demand and supply centers located across that nation. Also, power generation capacity is expected to increase substantially, which will boost the demand for power transformers and related accessories in the country. The country is also planning to add a major amount of hydropower and wind power capacity, which is likely to drive the market for power transformers in the future. Additionally, in India, rapid developments in both commercial and industrial infrastructure are supporting the growth of the market in APAC. Hence, such factors will propel the market's growth in APAC during the forecast period.
In 2020, the outbreak of COVID-19 negatively affected the growth of the market in APAC. However, the initiation of vaccination drives and the lifting of lockdown-related restrictions in 2021 led to the resumption of industrial operations in the region. This has led to a resurgence in the demand for electricity since 2021. Therefore, these factors are expected to foster the growth of the regional market during the forecast period.
The power transformers market research 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.
Power Transformers Market Scope |
|
Report Coverage |
Details |
Page number |
163 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.15% |
Market growth 2023-2027 |
USD 11,575.07 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
5.76 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 37% |
Key countries |
US, China, Japan, India, and Germany |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., ALTRAFO Srl, Altro Transformers Pty. Ltd., CG Power and Industrial Solutions Ltd., DuPont de Nemours Inc., Eaton Corp. Plc, Etel Transformers Pty ltd, Fuji Electric Co. Ltd., General Electric Co., Hammond Power Solutions Inc., Hitachi Ltd., Hyundai Electric and Energy Systems Co. Ltd., Kirloskar Electric Co. Ltd., Layer Electronics Srl, MGM Transformer Co., Schneider Electric SE, Siemens Energy AG, Southern Electronic Services, Tyree Industries, and Wilson Power And Distribution Technologies Pvt. Ltd. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and 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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