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The Power Transformers Market size is estimated to grow at a CAGR of 6.15% by USD 11.57 billion between 2022 and 2027 CAGR of 6.15%. The expansion of the power transformer market hinges on various factors, including the modernization of existing transformers, the growth of transmission and distribution (T&D) infrastructure driving the demand and the increasing capacity of renewable power generation. The modernization of transformers involves upgrading older units with newer, more efficient technologies to improve performance and reduce energy losses. The expansion of T&D infrastructure, particularly in developing regions, is boosting the demand for power transformers to facilitate the efficient transmission and distribution of electricity. Additionally, the increasing capacity of renewable power generation, such as wind and solar, requires the integration of power transformers to connect these sources to the grid, further driving market growth.
It also includes an in-depth analysis of drivers, trends, and challenges.
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This 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).
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. They 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 19.66 billion in 2017. 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. In addition to the new installation, the replacement demand 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 ones with highly efficient products. Therefore, such factors are expected to drive the 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 APAC power transformer market is experiencing significant growth due to increasing electricity demand driven by urbanization and improved living standards in major countries like China and India. Private sector involvement in power generation has led to increased efficiency, reduced electricity prices, and heightened competition. Green initiatives are gaining momentum in the power sector, with a focus on producing Green transformers that minimize greenhouse gas emissions and contribute to grid stability. High-voltage switches and insulation materials, such as laminated steel and insulation, are essential components used in industrial applications and infrastructure development. Manufacturing processes, including the use of precision machine tools and primary materials like mineral oil, can impact manufacturing time and line current. Renewable energy installations in remote places require transformers for power transmission, and retrofitting existing oil-filled transformers with low-carbon insulation is a key trend. Power losses and short circuits are ongoing challenges for power systems, and the power transformer industry continues to innovate to address these issues. Hence, such factors will propel the market's growth in APAC during the forecast period.
The market plays a crucial role in the renewable energy generation sector, particularly in addressing the challenges posed by aging power grids and increasing electricity demand. With the shift towards renewable resources, there is a growing need to ensure the stable transmission of electricity. Investor confidence in the power transformer industry is influenced by sociopolitical instability and infrastructure development. Cross-border transmission projects require them with high terawatt-hour capacity to facilitate the transfer of electricity between countries. Smart grid development, including the implementation of smart meters, necessitates the use to manage voltage and frequency, minimize losses, and ensure the reliable distribution of electricity.
The power transformer industry is also at the forefront of transmission network research, focusing on developing transformers for remote places and reducing carbon emissions. Power grid networks and distribution channels rely on maintaining voltage levels and ensuring electricity access to consumers. The industry is expected to witness significant investments in the coming years due to the increasing demand for electricity and the need to upgrade existing ones to meet the demands of the smart grid. 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 market growth. The market is experiencing significant growth due to the increasing installation and replacement of transformers, driven by the need to modernize and expand transmission infrastructure. This trend is particularly prominent in regions with aging power grids and growing energy demand. In India, the government's Accelerated Power Development and Reform Programme (APDRP) is providing funding to help state electricity boards improve their infrastructure and reduce losses. Key factors driving market growth include the adoption of smart energy grids and smart grid development, which require advanced transformers with features such as silicone insulation and voltage optimization. Sociopolitical instability and supply chain disruptions can also impact market growth.
The telecommunication industry is also a significant player in the market, as the development of smart grids and the integration of smart meters require robust supporting infrastructure. The market is expected to reach terawatt-hour capacity, with a focus on solid insulation and high voltage levels to support the smart grid revolution. Traditional transformers are being phased out in favor of more efficient and advanced solutions. Therefore, these factors will lead to significant growth in the global market during the forecast period.
The increasing popularity of bio-based and naphthenic transformer oil is an emerging trend in the power transformer market. The market is experiencing significant growth due to the increasing adoption of bio-based transformer oils, such as those derived from silicone. This shift is driven by the advantages of bio-based oils, including their excellent insulating properties, biodegradability, high fire point, and extended service life. The rise in the use of bio-based oils can be attributed to the increase in fire accidents in traditional mineral oil-based transformers and the non-biodegradable nature of mineral oil.
Moreover, the smart energy grid revolution is fueling the demand for these with solid insulation and high voltage optimization capabilities. Smart grid development and the integration of smart meters are key drivers in this sector. Sociopolitical instability and supply chain disruptions can also impact the market, highlighting the importance of supporting infrastructure. The telecommunication industry and transmission infrastructure are significant consumers of transformers with terawatt-hour capacity. The overall demand for naphthenic oil is anticipated to increase during the forecast period, as the industry continues to evolve and adapt to the changing energy landscape. Thus, these factors are expected to play a significant role in the growth of the market during the forecast period.
The new regulations increasing the cost of power transformers is a major challenge impeding the market growth. The market, particularly in Europe and the US, has seen increased regulations focusing on energy efficiency since the late 2000s. The Department of Energy (DOE) in the US mandated the National Electrical Manufacturers Association (NEMA) TP-1 minimum-energy efficiency standard for low-voltage dry-type transformers in 2007. This regulation was revised in 2016, covering liquid-immersed, low-voltage dry-type, and medium-voltage dry-type transformers with a capacity of 10kVA to 2,500kVA and voltage levels up to 34.5kV. The NEMA Candidate Standard Level (CSL)-3 standards, introduced in 2010, are not federally mandated but are widely adopted.
In the context of the global energy landscape, the market plays a crucial role in supporting smart grid development and the smart energy revolution. With the increasing adoption of smart meters and telecommunication infrastructure, there is a growing demand for transformers with solid insulation, such as those using silicone, to ensure reliable and efficient energy transmission. However, sociopolitical instability and supply chain disruptions can pose challenges to the transmission infrastructure's supporting infrastructure. The market is expected to reach terawatt-hour capacity as the demand for voltage optimization and higher voltage levels continues to grow. This is expected to restrict the growth of the global market during the forecast period.
The market 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 Market Customer Landscape
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.
Tyree Industries - The company 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 companies, including:
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.
The 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.
The market encompasses a significant segment of the power industry. Agings of these, especially those in the power sector, have become a major concern. Aging transformers in networks call for Capital Expenditures (Capex) for their replacement or refurbishment. Capitals are invested in Capital Intensive Technologies like Capping, Regeneration, Overhaul, and Replacement of transformers. The Capacity of these plays a crucial role in the market. Capacities range from Aluminum Liquid-filled to Oil-filled, with Capacities varying from Hundreds of Kilovolt-Amperes (kVA) to Megavolt-Amperes (MVA).
Capacitive Transformers, such as Capacitor Banks and Reactors, are also part of the market. Bulk Power Transformers are essential for the transmission of electricity over long distances. Bulk Power Transformers are large, heavy, and complex systems, requiring specialized skills for their installation, maintenance, and repair. The market is driven by the increasing demand for electricity and the need to maintain the reliability and efficiency of the power grid. The market is competitive, with key players including ABB, Siemens, General Electric, and Siemens Energy. These companies invest in Research and Development to improve the efficiency, reliability, and lifespan of transformers. The market is expected to grow, driven by the increasing demand for electricity and the need to modernize aging power infrastructure.
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 11.57 billion |
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 companies, Market Positioning of companies, 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 Forecasting, 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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