What are major drivers of the global power transformer market?

The power transformer is a type of transformer used to transfer electrical energy in any part of the electronic or electric circuit between the generator and distribution primary circuits. Power transformers connect electrical networks or systems of different voltage, in order to allow power exchange between them. Power transformers are used for power transmission, power generation, consumer application, and electro-intensive industrial applications. Power transformers are used in commercial applications such as hotels, hospitals, offices, airports, and universities.

The global Power Transformers Market was accounted for US$ 28.69 Bn in terms of value and 17,283 unit shipment in terms of volume in 2019 and is expected to grow at CAGR of 7.7% for the period (2020-2027).

Market Dynamics- Drivers

Increasing global energy demands is expected to drive growth of the global power transformers market during the forecast period
Increasing electrification ration in emerging economies such as India, Brazil, China, and Russia has led to increase in demand for power generation. Moreover, increase in load growth and high transmission and distribution losses highlights the need for more substations. As there are rapid economic development and increased need for uninterrupted and reliable power supply in the aforementioned countries, the power demand is expected to increase in the near future. Therefore, these factors are expected to drive growth of the global power transformers market during the forecast period.

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Renewal and upgrading of existing networks in mature economies is expected to propel the global power transformers market growth over the forecast period
In the majority of mature countries, electrical grid infrastructure is reaching the end of its operational lifespan following a strong investment in the 1970s. The average useful life span of a transformer is around 25 to 30 years. Furthermore, aging equipment is incompatible with the current technical and environmental requirements. Many governments have also made attempts to extend the life of a transformer over the past 20 years, but today the need to replace already existing equipment with more efficient units compatible with latest standards and smart grids has arrived. Therefore, these factors are expected to propel the global power transformers market growth over the forecast period.The volatility of raw material prices is expected to restrain growth of the global power transformers market during the forecast period
Raw materials used in the manufacturing of power transformers are copper, steel, aluminum, and oil. However, prices raw materials such as steel and oil have been highly volatile in the recent past. Cold-rolled coil steel is used for the manufacture of Cold Rolled Grain Oriented (CRGO) steel, which is in turn used for the manufacture of transformers. Similarly, crude oil prices have been very volatile and unpredictable over the past few years. The chart below illustrates the volatility in the price of crude oil in US$ per barrel over the past five years. Thus, these factors are expected to restrain growth of the global power transformers market during the forecast period.

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