Transformer Market - By Type (Distributed, Power); By Voltage; By Cooling Type (Oil Cooled, Air Cooled); By Components (Switch, Cooling Unit, Converter, Pump, Insulation, Measuring Device etc.); By Industries (Residential, Commercial, Utilities and Industrial); By Geography - Forecast (2024-2030)

Overview

The Transformer market size is forecast to reach USD 57.8 billion by 2030, after growing at a CAGR of 4.7% during 2024-2030. Transformers are electrical equipment that convert electricity from one circuit to another at changing voltage levels. Increased current causes an increase in voltage levels, hence transformers are designed to bring the needed voltage level by setting or stepping the voltages accordingly. The transformers are designed to be employed in a larger range of industrial applications with a broader market potential. In power systems, the transformer improves safety and efficiency by raising and reducing voltage levels as needed.
The use of transformers in various industrial applications, surge in adoption of different ratings of transformer in different regions of the world, rise in R&D activities, and rise in industrialization are driving the expansion of market.

Report Coverage
The report “Transformer Market– Forecast (2024-2030)”, by IndustryARC, covers an in-depth analysis of the following segments of the Transformer market.
By Transformer Core: Closed, Shell, Berry
By Transformer Type: Power Transformer, Distribution Transformer, Isolation/ Insulation Transformer, Instrument Transformers, Current Transformer, Voltage or Potential Transformer
By Cooling Type: Self-Cooled, Oil Cooled, Air Cooled
By Winding Type: Two-Winding, Auto-transformer
By Power Rating: Low Voltage Transformers, Medium Voltage Transformers, High Voltage Transformers
By Insulation Type: Oil-Immersed Transformer, Dry-type Transformer
By Mounting Type: Pad (Ground/ Submersible) mounted Transformer, Pole-mounted Transformer
By Application: Commercial and Industrial, Utilities, Residential
By Geography:  North America, South America, Europe, Asia-Pacific

Key Takeaways

• The transformer industry is increasingly adopting digital technologies and smart grids to enhance efficiency and reliability. This trend is driven by the need for better grid management, reduced losses, and integration of renewable energy sources. Siemens Energy has been actively developing and deploying digital transformers equipped with sensors and IoT capabilities. These smart transformers enable real-time monitoring and predictive maintenance, significantly improving grid reliability and efficiency.
• The distribution transformer segment is witnessing significant growth due to the rising demand for electricity in urban areas and the expansion of distribution networks. These transformers are essential for stepping down the voltage for safe and efficient distribution to end-users. Schneider Electric recently expanded its range of EcoStruxure™ Ready distribution transformers. These transformers are designed to optimize energy consumption and provide enhanced monitoring capabilities, aligning with the increasing urbanization and energy demands.
• The Asia-Pacific region is experiencing the fastest growth in the transformer market, driven by rapid industrialization, urbanization, and significant investments in power infrastructure. Countries like China and India are at the forefront of this expansion. In India, the government’s “Power for All” initiative and massive investments in the national grid have led to a surge in demand for transformers. Companies like Bharat Heavy Electricals Limited (BHEL) and Crompton Greaves are capitalizing on this demand by ramping up production and innovation in transformer technology.

By Transformer Core - Segment Analysis
Shell dominated the Transformer market in 2023. Core shell transformers have a closed magnetic circuit which minimizes the leakage flux. This design allows for more efficient use of the magnetic core material, reducing energy losses and improving overall efficiency. Siemens has developed a range of shell-type transformers specifically designed to reduce core losses and improve efficiency, which is crucial for applications requiring high energy efficiency. ABB has been a leader in implementing shell-type transformers in renewable energy projects. For instance, in a major solar power plant project in India, ABB supplied shell-type transformers that were specifically designed to handle the fluctuating loads typical of solar energy production. These transformers provided enhanced efficiency and reliability, crucial for the consistent performance of the power plant. The robust design and improved cooling capabilities ensured that the transformers operated optimally even in the high-temperature environments where the solar farms were located.

By Transformer Type - Segment Analysis
Power transformer have dominated the Transformer market in 2023. Power transformers are essential for transmitting electricity over long distances at high voltages. They step up the voltage for transmission and step it down for distribution, which minimizes energy losses and enhances efficiency. Large-scale power plants, such as nuclear or hydroelectric facilities, require power transformers to transmit electricity from the generation site to substations. The global push for infrastructure development, particularly in developing regions, necessitates robust power transmission systems. Power transformers play a critical role in the backbone of these systems. In countries like China and India, massive investments in power infrastructure are underway to support economic growth and urbanization. These projects heavily rely on power transformers to ensure stable and efficient electricity supply. 
The Changji-Guquan UHVDC (Ultra-High Voltage Direct Current) transmission link in China. ABB supplied the world's most powerful power transformer for this project. The transformer operates at a record voltage of 1100 kV and can transmit up to 12 GW of electricity over a distance of more than 3,000 km. This project is a testament to the critical role power transformers play in long-distance, high-capacity power transmission. It enables the efficient transfer of electricity from remote renewable energy sources in the west to densely populated eastern regions, reducing transmission losses and improving grid reliability.

By Application - Segment Analysis
Commercial and industrial have dominated the Transformer market in 2023. Commercial and industrial sectors have high energy demands for running machinery, lighting, HVAC systems, and other operations. Transformers are crucial for stepping down high voltage from power lines to usable levels within these facilities. Data centers, like those operated by Amazon Web Services (AWS), require a consistent and reliable power supply to ensure uptime and operational efficiency. Transformers play a critical role in managing the substantial electricity needs of these data centers. The growth and expansion of commercial and industrial infrastructure, such as office buildings, manufacturing plants, and warehouses, necessitate a robust and efficient power distribution network. This drives the demand for transformers. In China, the rapid industrialization and urban development have led to the construction of numerous industrial parks and commercial complexes. Companies like ABB and Siemens are providing high-capacity transformers to support these developments, ensuring stable and efficient power supply.
High Energy Consumption: Commercial and industrial sectors have significant energy needs, necessitating efficient power transformers. AWS data centers requiring reliable power supply. Expansion of commercial and industrial facilities drives demand for transformers. Industrial parks in China supported by high-capacity transformers from ABB and Siemens. Ensuring minimal downtime and optimized operations in these sectors requires advanced transformers. Automotive manufacturers like Tesla using transformers for uninterrupted production.

By Geography - Segment Analysis
APAC dominated the dominated the Transformer market in 2023. APAC countries are experiencing significant urbanization and industrial expansion. This growth leads to increased demand for electricity and, consequently, transformers to manage power distribution efficiently. In India, the “Make in India” initiative has accelerated industrial growth, leading to the establishment of numerous manufacturing units and industrial zones. This has spurred demand for transformers to ensure stable power supply. Governments in the APAC region are heavily investing in upgrading and expanding their power infrastructure to support economic growth and improve electrification rates, especially in rural areas. China’s State Grid Corporation has been investing billions in the expansion and modernization of the national grid, including the deployment of ultra-high-voltage (UHV) transformers to connect remote power generation sources with urban centers.

Drivers – Transformer Market
•    Increasing Investment in Renewable Energy
The global push towards renewable energy sources such as wind and solar power requires the installation of new transformers to manage and integrate these variable power sources into the grid efficiently. In the U.S., the Biden administration's clean energy initiatives are driving substantial investments in renewable energy infrastructure. For instance, the Vineyard Wind project off the coast of Massachusetts is one of the first large-scale offshore wind farms in the U.S. This project requires specialized transformers to connect the generated wind power to the mainland grid. China’s rapid expansion in solar and wind power installations, like the Gansu Wind Farm project, which is part of China’s renewable energy strategy, involves extensive use of transformers to ensure stable power distribution from remote locations to urban centers.

•    Urbanization and Infrastructure Development  
Rapid urbanization and the development of new infrastructure in emerging economies significantly increase the demand for transformers to support growing energy needs. The Smart Cities Mission in India aims to develop 100 smart cities across the country, integrating advanced infrastructure, including efficient power distribution networks that rely heavily on transformers. Companies like Siemens and ABB are providing advanced transformer solutions to these projects. Nigeria’s National Integrated Power Project (NIPP) is another example where significant investments are being made to improve power generation and distribution infrastructure, leading to increased demand for transformers.

Challenges – Transformer Market
•    High Initial Capital Costs
The initial investment required for transformer manufacturing, installation, and maintenance is substantial. This can be a barrier, especially in developing countries where budget constraints are a significant issue. Eskom, South Africa's primary electricity supplier, faces financial difficulties that hinder its ability to invest in new transformers and upgrade existing infrastructure. The high costs associated with transformers contribute to frequent power outages and load shedding in the country.

•    Supply Chain Disruptions
Global supply chain disruptions, often caused by geopolitical tensions, pandemics, or natural disasters, can severely impact the availability and cost of transformer components, leading to delays in projects and increased costs. The COVID-19 pandemic disrupted global supply chains, causing delays and increased costs for transformer manufacturing. Companies like General Electric and Schneider Electric reported significant impacts on their supply chains, affecting their ability to meet project deadlines and manage costs effectively.

Market Landscape

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the Transformer market. In 2023, the Transformer market share has been consolidated by the major players accounting for 76.8% of the share. Major players in the Transformer market are Siemens, ABB, Crompton Greaves, Hyundai Heavy Industries Co. Ltd., Alstom SA, GE Co, BHEL, Mitsubishi Electric Corporation, Schneider Electric, and Kirloskar Electric among others.

Developments:

• On October 19, 2022, Siemens Energy introduced its new line of green transformers, the "Blue" portfolio, designed to be more environmentally friendly. These transformers use natural ester oil instead of mineral oil, significantly reducing the environmental impact and enhancing safety.
• On June 1, 2023, ABB announced the launch of its new eco-efficient power transformers, part of the ABB Ability™ portfolio. These transformers use biodegradable insulation fluids and have a lower carbon footprint, supporting sustainability goals.
• On April 15, 2023, GE Renewable Energy announced the deployment of its latest transformers for offshore wind projects, particularly for the Dogger Bank Wind Farm in the UK. These transformers are designed to handle the unique challenges of offshore energy production and distribution.

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