Transformers: Global Market Scenario, Trends, Opportunity, Growth and Forecast, 2018-2028

Market Definition

Through the mechanism of electromagnetic induction, the transformer is an electrical device that is used to transmit electrical energy from one alternating-current circuit to another circuit or several circuits. Transformers are used for a variety of tasks, including raising the voltage from electric generators to transmit electricity over greater distances and lowering the voltage from traditional power circuits to operate low-voltage devices for residential applications. Step-up and step-down transformers are the two main categories of transformers. With the aid of potential transformers like current transformers and potential transformers, they are also used to measure the voltage and current of high-voltage cables.

Market Insights

The global market for transformers, which was valued at $43.59 billion in 2022, is anticipated to expand at a CAGR of roughly 10.25% from 2023 to 2030. The main drivers influencing market expansion are the rising demand for electricity caused by population growth and the growing preference for renewable energy sources. Transmission and distribution (T&D) utilities look forward to transitioning and updating their power systems to meet future grid requirements as a result of the decarbonization, decentralisation, and digitalization of the energy sector. Advanced transformer technologies have emerged as a result of these improvements.

Transformers come in different types, such as power transformers, distribution transformers, and others. Instrument transformers and autotransformers are included in the other segment. Due to its extensive application across numerous industries, the power segment is anticipated to hold a significant position in the transformers market. The majority of power transformers have ratings higher than 200MVA. They are put in at the transmission substations and producing stations since those places require high-capacity transformers.

According to projections, the transformer market will expand significantly during the ensuing years, thereby boosting utilities’ market share. A sizeable portion of the global market is held by the residential and commercial sectors. Strong incentives and government tax breaks support growing public awareness of the importance of using clean energy in homes and businesses, which in turn helps the market flourish. In several nations, home consumers are also utilising renewable energy on a big scale, and it is anticipated that this trend will continue in the years to come.

The market is developing as a result of increasing industry investment and consumer preference for renewable energy sources. Globally, utilities are making substantial efforts to upgrade the substations and convert the current grid into a smart grid. The International Energy Agency estimates that until 2030, grid investments required average about $600 billion annually to go towards the Net Zero Scenario. The demand for transformers will therefore increase over the next few years as a result of such investment opportunities in improving the grid around the world.

Market Dynamics: Drivers

Growing Investments in Transmission Network Expansion

High-voltage power lines called transmission lines transport electricity across vast distances from large power plants to smaller power distribution lines for local consumption. Government entities are making significant investments in transmission and distribution networks, which increases the demand for more transformer installations and fuels market expansion. For instance, the U.S. Department of Energy unveiled a $2.5 billion fund in May 2022 to upgrade and increase the capacity of the country’s power grid. One of the payments on the more than $20 billion in investments made as part of the DOE’s new Building a Better Grid Initiative is the beginning of this new programme.

The T&D network’s expanding investment opportunities in Europe are probably expected to fuel market expansion. As an illustration, Amprion, a German power transmission system operator (TSO), announced plans to invest around $12.8064 billion over the following five years in May 2022. A revised 2021 Development Plan for the national electricity transmission grid, totaling $18.100 billion in investments over the next 10 years, was also prepared in July 2021 by the Italian power transmission system operator (TSO), Terna. Such T&D network development initiatives are anticipated to increase demand for transformers, which will fuel market expansion during the ensuing years.

The expansion of the transmission network in India is another initiative by the Indian government to boost the market for transformers. The market is expected to increase as a result of rising power consumption and capability for renewable energy production. By 2030, the government wants to have 500 GW of non-fossil fuel electric capacity and to have 50% of its energy needs met by renewable sources. In the upcoming years, it is anticipated that transmission networks would grow along with the tremendous expansion of renewable energy generation. This expansion is being supported by a number of central programmes, which will increase demand for transformers and other types of transmission equipment.

The Green Energy Corridors (GEC) initiative is one such crucial programme that Power Grid Corp. of India Limited and state transmission utilities are putting into practise. Additionally, in September 2021, the central government announced plans to use the tariff-based competitive bidding (TBCB) procurement process to award 44 new transmission projects for $5.0116 billion under the GEC programme. Therefore, it is likely that such investment opportunities in extending the transmission and distribution network will fuel market expansion during the anticipated time frame.

Market Dynamics: Challenges

High Initial Cost

Transformer prices are determined by the materials, labour, and technological advancements employed in its production. Flying lead connectors, margin tape, standard wire, and the materials used all have an immediate impact on the transformer’s price. Transformer prices are significantly influenced by the fact that copper is the most basic component utilized in their production. The cost of the transformer is determined by the weight of the copper used. Even when the wire’s diameter grows, the price goes up. Larger reinforced insulated cables cost more than standard wires because they are larger. The amount of power a wire can carry is a significant additional component that affects its price.

Flying lead connections are one significant component that affects the price of the product and are also utilized to lower the size of the extended rail bobbins. The manual assembly of these flying lead connectors into the board raises the cost of manufacture. Additionally, because to their greater efficiency, efficient transformers are more expensive than ordinary transformers. Energy-efficient transformers are unaffordable for some utilities and end-use industrial and commercial customers in emerging nations due to their greater initial cost. The market dynamics will be significantly impacted by the sizeable capital investments necessary to construct the enabling infrastructure for dependable and stable transformer operation. Because of the high initial cost of transformers, these constraints are also projected to impede market growth.

Other challenges that limit market expansion include price fluctuation for raw materials like grain-oriented silicon steel and amorphous steel cores, as well as delivery delays brought on by lengthier manufacturing lead times. Other challenges that will limit market growth in the upcoming years include the unwillingness to replace the deteriorating power infrastructure and the state of the economy.

Due to the rising need for effective transformers, the initial cost of the transformer is high, which restrains market expansion.

Market Segmentation

• Based on Type, the Global Transformers market is segmented into
  • Distribution Transformer
  • Power Transformer
  • Others
• Based on Capacity Rating, the Global Transformers market is segmented into
  • Up to 500 kVA
  • 501 kVA to 2,500 kVA
  • 2,501 kVA to 10,000 kVA
  • Above 10,000 kVA
• Based on Phase, the Global Transformers market is segmented into
  • Single Phase
  • Three Phase
• Based on Insulation Type, the Global Transformers market is segmented into
  • Oil
  • Solid
  • Gas
• Based on End Use, the Global Transformers market is segmented into
  • Power & Utilities
  • Residential & Commercial
  • Industrial
• Based on Mounting Location, the Global Transformers market is segmented into
  • Pole Mounted
  • Pad Mounted
• Based on Geography, the Global Transformers market is segmented into
  • Asia-Pacific
  • North America
  • Europe
  • Latin America
  • Middle East & Africa

• All market revenue has been given in US Dollar, while the market volumes are given in units.

Historical Year: 2020-2021
Base Year: 2022
Estimated: 2023
Forecast- 2024-2030

Key Questions this Study will Answer

• What are the key overall market statistics or market estimates (Market Overview, Market Size- By Value, Market Size-By Volume, Forecast Numbers, Market Segmentation, Market Shares) of Global Transformers Market?
• What is the region wise industry size, growth drivers and challenges key market trends?
• What are the key innovations, opportunities, current and future trends and regulations in the Global Transformers Market?
• Who are the key competitors, what are their key strength and weakness and how they perform in Global Transformers Market based on competitive benchmarking matrix?
• What are the key results derived from the market surveys conducted during Global Transformers Market study?