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 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.
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.
| Report Coverage | Details | ||
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| Base Year: | 2019 | Market Size in 2019: | USD 28.69 Bn |
| Historical Data for: | 2017 to 2019 | Forecast Period: | 2020 to 2027 |
| Forecast Period 2020 to 2027 CAGR: | 7.7% | 2027 Value Projection: | USD 51.94 Bn |
| Geographies covered: |
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| Companies covered: |
ABB Ltd., Toshiba Corp., Alstom SA, Siemens Energy, Bharat Heavy Electricals Limited, Mitsubishi Electric Corporation, Hyosung Power & Industrial Systems Performance Group, Hitachi, Hyundai Heavy Industries Co. Ltd., GE Co., and Crompton Greaves Ltd. |
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| Growth Drivers: |
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| Restraints & Challenges: |
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Statistics:
Asia Pacific held dominant position in the global Power Transformers market in 2019, accounting for 41.2% share in terms of value, followed by North America Europe.
Figure 1: Global Power Transformers Market Share (%) in terms of Value, By Region, 2019
Market Dynamics- Restraints
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.
Another prevalent challenge in the market is the lack of standardization of products. Currently, there is no standardization of the product in the market, which makes it challenging for manufacturers to provide uniform products. Therefore, these factors are expected to hamper the global power transformers market growth in the near future.
Market Opportunities
A smart grid is an enhancement over a traditional electrical network and acts as an automated monitoring and controlling system. Dynamic pricing and consumption data are the core functionalities provided and envisioned on a larger scale in the form of the grid. Moreover, new technologies ensure the stability of the electrical grid when it receives an intermittent supply of electricity. Smart grids help interconnect all assets and optimize network control. Thus, this factor is expected to accelerate growth of the power transformers market over the forecast period.
A green power transformer is a sustainable, eco-efficient product. Green power transfers offer a new alternatives for customers who want to preserve the environment. It lowers the carbon footprint, limited risk, and enhanced life cycle costs as it requires less maintenance. Many government authorities have to invest in green power transformers over conventional power transformers. Since these transformers have lower noise levels and improved fire safety, it is expected to witness massive demand in the near future.
Figure 2: Global Power Transformers Market Value (US$ Bn), 2017 - 2027
The global Power Transformers market was valued at US$ 28.69 Bn in 2019 and is forecast to reach a value of US$ 51.94 Bn by 2027 at a CAGR of 7.7% between 2020 and 2027.
Market Trends
Key companies are focused on contracts and orders, in order to expand the market presence. For instance, in April 2013, ABB received orders worth US$ 120 Billion from the Saudi Electric Company for the supply of power transformers to strengthen the Saudi Arabian Grid. In June 2013, Crompton Greaves Ltd. received an order worth US$ 37.23 Billion from PGCIL for the supply of seven 500 MVA single phase 765 kV autotransformers, thirty-eight 80 MVAR and 110 MVAR single phase 765 kV reactors, which are to be installed at various substations in India.
Major companies in the market are focused on joint ventures and partnerships, in order to gain a competitive edge in the market. For instance, in May 2013, Korea Electric Power Corporation entered into a joint venture with Alstom Grid named KEPCO Alstom Power Electronics Systems. The joint venture will focus on delivering HVDC projects in Korea. Moreover, in August 2013, GE Energy partnered with XD Electric Group. The partnership would combine GE’s grid automation and XD Electric’s comprehensive product portfolio which comprises high voltage power equipment.
Value Chain Analysis
The raw materials used primarily in the construction of transformers are steel, oil, and copper. Steel accounts for about one-third of the overall transformer manufacturing cost. Cold Rolled Grain Oriented (CRGO) steel is vital for manufacturing of power and distribution transformers. The companies supplying CRGO steel to transformer manufacturers include Nippon Steel Corporation and J Pearson International Inc. The major transformer manufacturers include companies such as ABB Ltd., Alstom SA, Toshiba Corporation, Siemens AG, and Crompton Greaves Ltd. among others. These companies assemble the core and coil winding, carry out the drying out process, fabricate the tank, perform tanking and painting and finally test the transformers performance as per requirements.
Competitive Section
Major companies operating in the global power transformer market are ABB Ltd., Toshiba Corp., Alstom SA, Siemens Energy, Bharat Heavy Electricals Limited, Mitsubishi Electric Corporation, Hyosung Power & Industrial Systems Performance Group, Hitachi, Hyundai Heavy Industries Co. Ltd., GE Co., and Crompton Greaves Ltd.
Key Developments
Power transformer is a Power Rating of transformer used to receive low voltage generator electric power and transmit it across distribution channels in the power grid network. Power transformers find industrial applications in chemical plants, mining, substations, paper, cement mills, and power generation. There are different Power Ratings of power transformers such as autotransformers, small power transformers, medium power transformers, phase shifting transformers, HVDC converter transformers, shunt reactors, large power transformers, gas-insulated transformers, and converter transformers.
Market Dynamics
Renewable energy poses less impact on the environment and is present in abundance. However, current technologies are incapable of completing tapping and utilizing renewable sources to generate power. On the contrary, non-renewable sources of energy account for most of the power generation although they are responsible for pollution of the atmosphere. This, in turn, results in increased carbon dioxide levels in the atmosphere. The International Energy Agency has constantly warned and mentioned about the increase in carbon dioxide emissions over past years. Many international meetings and agreements have demanded both the emerging and mature economies to cut emissions significantly. As a result of this, there is a need for green energy generation, in order to reduce carbon dioxide emissions and overall environmental pollution. Therefore, these factors are expected to drive growth of the global power transformers market during the forecast period.
Market Taxonomy
This report segments the global market on the basis of Power Rating. On the basis of Power Rating, global Power Transformer market is segmented into 100 MVA to 500 MVA, 501 MVA to 800 MVA and 801 MVA to 1200 MVA. On the basis of region, global Power Transformer market is segmented into North America, Latin America, Europe, Asia Pacific, Middle East, and Africa.
Key features of the study:
Detailed Segmentation:
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