Transformer Market Size, Share, and Industry Trends 2031

Written by Shweta Dixit  »  Updated on: July 10th, 2024

Transformer Market Size, Share, and Industry Trends 2031

The residential and commercial establishments worldwide require a continuous and safe flow of electricity. With the global demand for electricity rising at an exploding rate, the demand for an efficient transmission and distribution (T&D) network is also on a constant rise. The electricity demand is met on the back of strong support of the rapidly expanding T&D network, thereby fuelling the demand for T&D equipment such as transformers. The global transformer market is thus witnessing steadfast progress.

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Transition to Renewable Energy Sources Fuels Transformer Market

Undergoing a significant transition, the world of power supply is adopting a shift to renewables, as a result of which the investments flowing into the renewable energy sector are outweighing those in the conventional power generation segment. In line with the growing integration of renewable energy sources into the grid, and the rising employment of distributed technologies, utilities are undergoing system upgrades to maintain power quality, ensure real-time supply-demand balance, and guarantee sufficient distribution infrastructure capacity.

Transformers: A Vital Link Between Electrical Source and Application

If electrical energy at the power plant were transmitted directly through the large overhead cables that cross the landscape, the energy would be used up in the effort over long distances. To avoid line losses and voltage drops, the transmission of electrical power is carried out at maximum voltage. It makes sense to ship high-voltage electricity from the power station and then transform it to lower voltages when it reaches its various destinations. It is also necessary to maintain terminal voltages at the load terminals. Voltage drops on lines should not exceed a specified limit. According to the standard distribution system, voltage variation to the load should not be greater than ±10% of the rating of the load. Otherwise, the load does not work properly and may be permanently damaged.

Transformers serve to step up voltage at the generation end and step down voltage at the user end. Transformers at the generating power plant are used to step up the voltage to the level required to transport electrical energy over long distances. They are found again at substations along the way, where the depleted power is given another step-up boost for the next leg of the journey. When the electrical energy finally reaches its destination, transformers are again used to step down the voltage until it becomes usable at homes or workplaces. AC power systems are more practical and thus, are more preferred over their DC counterparts. All of these factors are expected to boost the global transformer market during the forecast years of 2021 to 2025.

Ever-Increasing Electricity Demand Creates Excellent Opportunity for Global Transformer Market

The global population of 7.7 billion people is increasing by almost 90 million people per year. The electricity consumption is growing faster, averaging a 68% increase from 2000 to 2019, greater than any other form of energy consumption due to increasing demand by the expanding global population. However, nearly 17% of the global population still does not have access to electricity. Additionally, digitization, electromobility, and sector-coupling will increase electricity demand. The International Energy Agency (IEA) estimates a +2.0% increase in the global annual demand by 2040, to 40,443 billion kWh. As per BP, ExxonMobil, and the US Energy Information Administration (EIA) forecasts, it will range from 34,000 to 42,000 billion kWh per year by 2040.

In 2019, the BRICS region contributed around 78% to the global increase in power consumption between 2010 and 2019. The Asian powerhouse, China, remains the top electricity consumer in the world, followed by the US, where electricity usage is reported to have surged 13-fold since 1950. India sits third on the list as the country's electricity consumption is expected to reach 4 trillion units by 2030, followed by Russia and Japan. Moreover, the next major electricity consumers in the world are South Korea, Canada, Brazil, Germany, France, Mexico, and the United Kingdom. The demand is particularly strong in developing economies.

Market Dynamics and Challenges

The demand in the transformer market will continue to increase as generation capacity of both conventional and non-renewable sources rises due to increased per capita consumption of electricity and new avenues such as digitally connected devices, air conditioning, and electric vehicle charging stations. The demand will also increase owing to the growing replacement of old transformers with their energy-efficient counterparts. Government policies, market conditions, and available technologies (low-carbon sources) significantly contribute to market expansion. However, overloading of transformers, tampering/bypassing protection equipment, theft of material/oil, leading to fire and/or transformer failure, remain key challenges facing the industry.

Global Transformer Market: Key Players

ABB, AL FANAR COMPANY, DAIHEN CORPORATION, Eaton Electric Holdings LLC, GE, Hyundai Heavy Industries, Jiangsu Huapeng Transformer, Kraftwerke Ilanz AG, Mitsubishi Electric, NISSIN ELECTRIC CO., LTD., Schneider Electric, Shandong Power Equipment Co., Ltd., Siemens AG, Solar Turbines, Toshiba Corporation, Kirloskar Electric Company, TAKAOKA TOKO CO. LTD., TBEA, and Xi'an XD Transformer Co., Ltd. are some of the prominent players competing in the global transformer market.

As the demand for electricity continues to soar, the global transformer market is expected to experience sustained growth, driven by the expanding T&D network and the shift towards renewable energy sources.

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