Power Transformer Market Global Business Insights and Development Analysis to 2027

Increase in demand for electricity across the globe, replacement of existing transmission networks, and rise in adoption of smart grids drive the growth of the global power transformer market. However, high installation, logistics, and supporting the infrastructure cost of the transformer hinder the market. On the contrary, surge in use of renewable and non-conventional energy sources is expected to open new opportunities for the market players in the coming years.

Global power transformer market was valued at $27.7 billion in 2019, and is expected to reach $50.8 billion by 2027, registering a CAGR of 7.9% from 2020 to 2027.

Power transformer is a type of transformer used primarily to receive low voltage generator electric power and transmit it across distribution channels across the power grid network. Power Transformer is part of the transmission system and an important element in the power delivery value chain. It facilitates evacuation of power from generating stations and its delivery to the load centers.

Power transformers are mainly used to step-up the voltage as transmission of high voltage power is more efficient than low voltage transmission. It is used in generation step-up units (GSU), transmission substations, industrial plants like oil & gas refinery, chemicals & petrochemicals, cement industry, mining industry, desalination plants, malls, metros, and other infrastructural fields. High-voltage direct current (HVDC) has emerged as the preferred transmission technology for long distance bulk power supply. Countries such as the U.S. and China, have constructed long distance power transmission networks to transfer more energy via UHV DC, thereby maximizing the use of renewable energy while slashing reliance on coal. Utilization of ultra-high-voltage transmission technology is already being used in many countries such as China.

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Increase in electricity consumption, replacement of existing power transformers for integration with renewable energy sources as well as deployment of smart power grids are the major drivers driving the global power transformer market. Increase in demand for electricity and emergence of renewable power sources increases the adoption of high voltage transmission technologies such as UHV, HVAC and HVDC power transformers. The development of modern electric cars and incentives to deploy them is increasing the consumption of electricity in the automotive sector. For efficient dispersal of power to deficit regions, strengthening and enhancement of the transmission system network are required.

The global power transformers market growth varies in each region depending on the government investments, economic development, and private utility companies’ willingness to upgrade existing transmission networks. Aging infrastructure is one of the factors boosting the growth of the global power transformers market. Aging equipment has a higher risk of failure and is unreliable. Frequent failure in transmission hampers customer development as in the case of industries and other commercial consumers of electricity that demand stable supply of electric power. Furthermore, growth in renewable energy investment slows due to grid limitations. Hence, upgrading the capacity of power transformers is crucial to meet the future demand for electricity.

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Some of the restraints associated with power transformer market are high price of power transformers as well as associated costs, such as land, infrastructure, logistics, and protective instruments. Wind, solar, and hydro energy are contributing to the total electricity output and is forecasted to increase its contribution in the coming years. To meet such a spike in electricity demand, advanced power grids are essential. These factors play an important role in the global power transformer market growth. Also, there is a lack of consistent demand for high rating segment of power transformers, though these costs can be mitigated with lenient government regulations and innovations in manufacturing of power transformers. Further, the global power transformer market is characterized by continuous adaptations because of changing technological upgrades. Overall expansion of electric network and deployment of smart power grids are expected to offer lucrative opportunities to the global power transformer market.

By rating, the medium segment dominated the global power transformer market in 2019, accounting for nearly half of the market. Moreover, the segment is expected to register the highest CAGR of 8.7% during the forecast period, owing to the replacement of existing power transformers as well as new power grid projects.

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By region, the global power transformer market across Asia-Pacific held the largest share in 2019, accounting for more than two-fifths of the market. Moreover, the region is expected to manifest the highest CAGR of 9.0% during the forecast period, owing to ongoing power grid expansion projects, namely in India and China. The market across North America held more than one-fourth of the market.

COVID-19 scenario: The recent pandemic has adversely affected the power transformer industry.

• The dampened demand for oil and plummeting pricing and production would negatively impact the market growth.

• The shutdowns and restrictions on production will hamper the market growth.

• However, the continued operation of nuclear power plants and the availability of electric services would minimize the overall impact on market growth.

The global power transformer market report includes an in-depth analysis of the major market players such as CG Power and Industrial Solutions Ltd., General Electric Company, Kirloskar Electric Co. Ltd., Siemens AG, Bharat Heavy Electricals Ltd., EMCO Ltd., Hitachi Ltd., Schneider Electric SE, and TBEA Co. Ltd.

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