Power Grid

10 Mar 2023

The Increasing Energy Demand Is Fueling the Consumption of Distribution Transformers

10 Mar 2023  by   

The global distribution transformers market was estimated to reach a valuation of USD 26.1 Billion in the year 2022. With a steady CAGR of 6% from 2023 to 2033, this market is expected to reach USD 27.5 Billion by 2023 and USD 49.4 Billion by 2033.

The globally increasing energy demand along with the introduction of various regulatory reforms for the improvement of distribution and transmission networks will accelerate the penetration of technology. The rising investments in supporting the distribution networks to provide electricity in remote areas will also affect this technology positively during the forecast period. These networks are gaining huge popularity nowadays based on three aspects: compactness, cost-effectiveness, and simple installation features.

The key players in the global market are aimed at investing in innovative smart technology, like smart transformers, that would take immediate steps during any fluctuations and hence enhance the power quality being received at various homes. Such factors are predicted to open up new opportunities for the manufacturers in this market.

During the projected period, the oil-filled distribution transformers segment is anticipated to rule the distribution transformer market. Liquids are used to cool the oil-filled transformers, which makes them ideal for outdoor usage. They have more dependable overload capabilities, are more efficient, and have longer service lifetimes. The utilization of a liquid as a cooling medium makes these sorts of converters a better choice than dry ones.

The main benefit of an oil-filled transformer is its ability to take larger ratings as well as overloads. To enhance their rates of electrification, nations like India and China are extending their transmission & distribution networks, which is anticipated to drive the demand for oil-filled distribution transformers. For instance, the Pradhan Mantri Sahaj Bijli Har program of the Indian government seeks to electrify every home.

Region-wise, one of the top regions for distribution transformer production is Asia-Pacific. Along with increased family income as well as urbanization, developing countries like India and China have seen rapid population expansion. The market for distribution transformers is growing quickly as a result of the sudden increase in demand for power. To address the growing demand for power in China, the government is creating new generation projects, notably those utilizing renewable energy.

What is Driving Demand for Distribution Transformers

Distribution transformers are used for providing final voltage transformation in electric power distribution system. It steps down the high voltage used in the distribution line to the level used by consumers.

These are designed to provide maximum efficiency at lower loads hence they generally do not operate at full load.

Distribution transformers market growth is anticipated to be influenced by increasing demand for substituting and refurbishing of aged transformers and initiatives for increasing power generation capacities around the globe.

The rising demand for electricity in emerging countries such as China, India, etc. is driving the rapid investments in power transmission and distribution infrastructure subsequently augmenting the consumption of distribution transformers.

Power generation from natural gas sector and renewable energy and is increasingly taking over fossil fuel along with other conventional methods so as to meet the requirements.

The investments in renewable power infrastructure are projected to ascend the demand for distribution transformers.

The competition between Power distribution and transmission sector with each other and partnerships with tech firms to deliver improved and innovative solutions is compelling the steady growth in the market.

The increasing activities for expansion of electrical distribution network and retrofitting of existing networks are fueling the consumption of distribution transformers.

Asia Demand Potential

Asia Pacific region is projected to witness highest growth over the forecast period, on the back of large scale manufacturing in China and Japan coupled with substantial investments in new technologies.

The shift of manufacturing locations in the emerging countries such as Taiwan, China, etc. is paving the way for market growth in the region.

China is witnessing robust growth in the electricity demand from recent couple of decades, on the back of infrastructural developments and high levels of industrialization. This, in turn, is projected to create positive growth prospects for the distribution transformers market growth.

Europe Market Growth Outlook

The developed countries from Northern and South Western Europe also hold prominent share in the distribution transformers market on the account of increasing electricity demand and technology upgradation.

The rapid growth in investments in smart grid technologies with integration of IoT and artificial intelligence is projected to positively influence the growth in demand over the forecast period.


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