The global power transformer market was estimated to be over 11,300 units in 2013 and is expected to grow at a CAGR of 5.9% from 2014 to 2020. In revenue terms, the market is estimated to be over USD 18 billion in 2013. Increasing electricity demand in emerging and developed countries with rising investment in infrastructure is expected to be the key driving force for the market. High demand and supportive initiatives for smart grid development have resulted in the need for smart meters, which is expected to positively impact growth over the next five years. Additionally, a number of government initiatives for installing technologically advanced power transformer and modernizing the existing power grids for improving energy efficiency and minimize losses are projected to positively impact demand.
North America power transformer market, 2012 - 2020 (USD Billion)
Traditional transformers are not compatible with current environmental and technical requirements which are projected to be replaced by eco-friendly products owing to the environmental safety measures and advanced features offered by them. Developed economies are expanding cross-border electricity trade, integrating the wind and other renewable energies thereby, increasing the load flow on aging networks. These factors also lead to frequent short-circuits situations which are expected to offer lucrative opportunities for the power transformer industry growth.
Growing awareness about low-carbon emission is driving the development of a super grid and smart grid. Additionally, service expansions in resource-based industries, increasing Polychlorinated Biphenyls (PCB) replacement programs, and growing green initiatives are estimated to offer prominent opportunities for industry growth.
However, fluctuating prices of raw materials including steel and copper and crude oil in the international market along with pricing pressure on manufacturing companies can act as a restraint for the industry growth.
Key products include 100 MVA to 500 MVA, 501 MVA to 800 MVA, and 801 MVA to 1200 MVA. 100 MVA to 500 MVA products is projected to dominate the industry over the forecast period owing to its varied usage in distribution and transmission networks for the step-down and step-up application.
801 MVA to 1200 MVA variants find applications for UHVDC and HVDC power generation and are estimated to witness significant growth on account of increasing energy demands from developing regions including Asia-Pacific and the Middle East.
The Asia Pacific power transformer market accounted for over 40% of the global revenue share in 2013 and is anticipated to witness significant gains over the next five years owing to rapid economic development and increased need for uninterrupted and reliable power supply owing to increase in population in the region.
North America is anticipated to evolve as an emerging market owing to the increasing modernization and industrialization in the region. Several initiatives adopted by the European nations for deploying green transformer are estimated to positively elevate industry growth.
Crompton Greaves Ltd, Alstom SA, ABB Ltd, Siemens AG, GE Co., Toshiba Corp dominate power transformer market share. Improving product life along with increasing production capacity are a few of the key strategies adopted by the industry participants to gain considerable industry share. Notable companies have been providing shunt reactors, HVDC light and phase-shifting variants, etc. along with enhancing their product portfolio.
Alstom has developed and introduced green variants for environmentally delicate zones with features including low noise level and online monitoring system. GE portfolio includes autotransformer, general setup, and substation & auxiliary. Recently, Crompton Greaves signed a contract with Saudi Electricity Company (SEC) worth USD 3.6 million to provide smart grid solutions in Saudi Arabia.
Many international agencies and agreements have demanded both the emerging and mature economies to reduce emissions significantly. The power transformer industry is highly regulated and several regulations related to efficiency, environment, and performance have to be fulfilled by Key players. Further, the key players are investing in R&D to invent new technologies for improving efficiency along with reducing losses and emissions. Strategic partnerships and acquisitions are also used for business expansion.
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The exponential spread of COVID-19 worldwide has had an adverse impact on the semiconductor industry with manufacturing facilities temporarily shut, leading to a significant slowdown in the production. The outbreak could result in disruption across the ecosystem with several supply chain participants shifting their production facilities outside China, thereby reducing their over-reliance on China. Lockdowns imposed by the governments in the wake of the Covid-19 outbreak has not only affected manufacturing but also hauled consumer demand for semiconductor devices. Our analysts predict a decline in semiconductor revenue by over 1% in 2020 as compared to that in 2019. The report will account for Covid19 as a key market contributor.