Rapid urbanization has increased the demand for electricity which has fueled the proliferation of the power transformer market. Many countries need an effective integration of large-scale power grids to satisfy these demands. Such a significant shift of preference to develop an efficient electric infrastructure will boost the usage of power transformers.
As per a Global Market Insight Inc. report, the power transformer market is anticipated to register a CAGR of around 5% by the end of 2027.
Technological advancements with the implementation of grid networks based on cloud systems have bolstered the consumption of power transformers. In addition, increased financial assistance for setting a grid infrastructure providing power at longer distances will propel the demand for power transformers.
In terms of cooling methods, the dry-type power transformers have high dielectric strength, low maintenance costs and offer zero carbon emissions. Many key players are heavily investing in research and development activities which will probably bolster the product demand. Citing the aforesaid with an instance, ABB, in 2018, announced the Ability TXper digital dry-type transformer which consists of processing units for data analytics, hardware for data storage, temperature sensors, integrated cloud systems. Driven by such initiative and benefits, dry-type power transformer market revenue surpassed USD 5 billion in 2020.
When it comes to the type of insulation, oil insulation is primarily used for commercial and industrial applications. This is one of the reasons that the segment dominated the power transformer market in 2020 with a major share of 58.9%. Increased construction of distribution and transmission infrastructure for inter-state and cross-border projects will significantly contribute to the industry growth. In addition, oil insulation offers fast dissipation of heat, uniform transformer conduction and recoverable insulation performance.
Industrial expansion in developing economies along with increased integration of sustainable sources of power generation have propelled the >800 MVA rating segment. There has been a sizeable rise in the consumption of electricity across large- and medium-level industries such as food processing plants, oil & gas refineries which has boosted the segment growth. With renewable grid structures adopting novel power transmission units, the >800 MVA segment will probably flourish over the projected timeframe.
Regionally, the power transformer market in the Middle East & Africa is projected to showcase sizeable growth owing to increased investments for the infrastructural development of the electric network. This, along with strict regulatory policies for reducing the usage of equipment emitting carbon has bolstered the market growth in the region. With the establishment of micro-grid networks along with revamping & reconstruction of existing power grids, the market for power transformers will promote substantial growth over the coming years.
However, the ongoing COVID-19 pandemic has reduced the investment from private and public sector organizations. But developed countries have taken some radical steps in reestablishing transmission & distribution networks across developing and underdeveloped economies. Such initiatives have stabilized the growth of the market.