GAS INSULATED TRANSFORMER MARKET ANALYSIS

Gas Insulated Transformer Market Size and Trends

The global gas insulated transformer market is estimated to be valued at US$ 2.81 Bn in 2024 and is expected to reach US$ 4.02 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 5.2% from 2024 to 2031.

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The key factors driving the growth of this market include increasing investments towards the development and upgradation of T&D infrastructure across the globe. Moreover, gas insulated transformers offer compact design and require less space, which helps save costs, fueling their rising adoption. Additionally, the growing use of renewable energy coupled with investments towards grid infrastructure modernization will further contribute to the revenue growth of the gas insulated transformer market during the forecast period.

Growing infrastructure development projects

The gas insulated transformer market is expected to witness significant growth over the forecast period owing to the growing infrastructure development projects around the world. The increasing investments in grid infrastructure, renewable energy integration, construction of new commercial buildings, and modernization of existing infrastructure will drive the demand for gas insulated transformers.

Over the past few decades, both developed and developing nations have been extensively investing in upgrading their aging power infrastructure. Countries are focusing on modernizing their transmission and distribution systems to improve grid reliability and power availability. This involves installing new transmission lines, substations, and distribution networks which present growth opportunities for gas insulated transformers. Their compact design and high-power density make them suitable for installation in congested urban areas with space constraints. The growing construction of smart cities and mega infrastructure projects will augment the sales of gas insulated transformers in the coming years.

Market Concentration and Competitive Landscape

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Demand for reliable and efficient power solutions

The global gas insulated transformer market is also projected to witness significant momentum due to increasing demand for reliable and efficient power distribution solutions across industries. Gas insulated transformers offer several advantages over the traditionally used oil insulated transformers such as compact size, low maintenance, better safety, and greater reliability. Their encased compact design prevents faults caused by surrounding environmental conditions and makes them suitable for installation even in seismic zones.

Various industries have been increasingly adopting gas insulated technology owing to reliability issues caused by frequent faults in conventional transformers. Their seamless operation and negligible downtime is critical for industries with zero tolerance for power disruptions such as data centers, hospitals, manufacturing plants, airports, and metros. Furthermore, gas insulated transformers contribute to reducing transmission and distribution losses due to lower energy consumption. The growing automation and digitization of processes across industries will propel the replacement of older transformers with advanced gas insulated systems for ensuring continuous power supply. The advantages of higher efficiency and minimal maintenance needs are encouraging adoption among end-use industries.

Key Takeaways from Analyst:

The global gas insulated transformer market is expected to witness steady growth over the forecast period driven by increasing investments in underground transmission and distribution infrastructure projects across regions. Adoption of gas insulated transformers is higher for underground transmission lines due to their compact size and ability to operate at higher voltages in congested areas with minimal fire hazards. Growth in renewable energy integration and construction of smart grids will further support market expansion. Moreover, the replacement of aging overhead lines with underground cables in developed regions of North America and Europe is creating opportunities for gas insulated transformer suppliers.

However, higher initial costs of gas insulated transformers compared to traditional oil insulated ones can negatively impact demand. Standardization issues also exist owing to project-specific engineering requirements. Potential supply chain disruptions due to COVID-19 may further restrain market growth in the short-term. The Asia Pacific region, led by China, India, and Japan, dominates current installations and is expected to remain the major revenue generator given continued infrastructure investments. Meanwhile, North America and Western Europe are likely to generate the most replacement demand going forward. Innovation in insulation technologies can help address design challenges for operation at ultra-high voltages over 400kV.

Market Challenges: Limited Availability of Skilled Labor for Installation and Maintenance

The global gas insulated transformer market faces significant challenges due to the limited availability of skilled labor who can properly install as well as maintain these transformers. Gas insulated transformers are more complex than traditionally used oil immersed transformers as they require specialized skills to handle gases like sulfur hexafluoride. There is a lack of trained workforce who have technical know-how and certification to work on GIS equipment. This skill gap is causing delays in projects and increasing the installation and maintenance costs. Utilities and grid operators grapple to find qualified personnel who can ensure safety protocols are followed. With the rising demand of GIS transformers, the deficit of competent manpower will worsen if widespread training and development programs are not established. Managing this human resource challenge is critical for vendors to complete pending supply orders and capture new opportunities in the market.

Market Opportunities: Expansion of the market in developing countries due to increasing electricity demand

The global gas insulated transformer market has strong potential for expansion in developing regions due to increasing electricity demand from industrialization and infrastructure growth. Countries like India, Brazil, Indonesia and many African nations are undergoing rapid urbanization which is boosting their GDP and economic activities. As populations and businesses expand to new areas, the need for electricity will surge tremendously in the coming years. This demand spike requires the strengthening of transmission and distribution infrastructure with robust equipment like GIS transformers. Their compact size and no maintenance properties make them ideal for capacity enhancement projects in bandwidth constrained areas. If vendors successfully demonstrate reliability and value, developing markets can drive the next phase of market revenue increase in the coming decade.

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Insights By Voltage Rating - Growing Demand for Efficient Power Distribution Drives the Medium Voltage Segment

In terms of voltage rating, medium voltage (72.5 kV to 230 kV) is expected to contribute 51.6% share of the market in 2024 owing to its extensive use across power distribution networks. Medium voltage transformers are used extensively at the distribution level to step down high transmission voltages to lower secondary voltages suitable for industrial and commercial uses. As electricity demand grows worldwide with increasing industrialization and urbanization, distribution networks are being upgraded and expanded to deliver power more efficiently. This drives strong demand for medium voltage transformers. Their compact size and ability to handle substantial loads make them well-suited for use in distribution stations, grid substations, and industrial power systems. As reliable and uninterrupted power supply becomes a higher priority, grid operators are opting for gas insulated designs that offer enhanced safety, less maintenance needs and an extended service life compared to oil-filled variants. This is positively impacting the medium voltage segment.

Insights By Cooling Type - Oil Lubricated Design Dominates Amid Preference for Established Reliability

In terms of cooling type, oil-cooled is expected to contribute 69.2% share of the market in 2024 due to its widespread adoption and proven track record. While air-cooled transformers provide advantages such as reduced maintenance and fire safety, oil-cooled transformers are the established technology of choice, especially for medium-to-large capacity installations. Utilities and industrial end-users prefer oil-cooled designs for their high reliability gained from over a century of field experience. The insulating oil also serves as a coolant and extinguishes faults within the transformer tank, reducing damage. Additionally, oil circulation facilitates uniform cooling inside the windings. Transformer manufacturers continue to rely on mineral or synthetic insulating oils due to familiarity with oil characteristics and maintenance processes. However, newer dielectric fluids may increasingly challenge the dominance of oil-cooled transformers.

Insights By End User - Infrastructure Investment in Power Grids Major Demand Driver

In terms of end user, power transmission and distribution is expected to contribute 64.5% of the market share in 2024 owing to extensive network upgrades in both developed and developing countries. As grids expand and ageing equipment is replaced, transmission system operators and power utilities continue to invest heavily in gas insulated substations and distribution stations. This stimulates demand from the power transmission and distribution segment. Government initiatives worldwide to strengthen national grids and improve access to electricity also boost infrastructure spending. Additionally, policies encouraging renewable energy integration and the implementation of smarter grid technologies require an overhaul of transmission assets. Such macro factors establish the power transmission and distribution industry as a major end user, driving sustained uptake of gas insulated transformers.

Regional Insights

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Asia Pacific is projected to dominate the gas insulated transformer market, and is expected to capture a significant share of 39.2% of the market in 2024. This dominance is largely attributed to the rapid industrialization and urbanization occurring in countries, such as China and India, which are experiencing increased demand for electricity and the modernization of their power infrastructure. The region's focus on enhancing its transmission and distribution networks, alongside investments in renewable energy sources, is expected to further bolster the market growth.

In contrast, North America is also expected to witness growth in the gas insulated transformer market in 2024. This growth can be attributed to ongoing investments in upgrading aging electrical infrastructure and the increasing adoption of advanced technologies to improve energy efficiency. The region's commitment to integrating renewable energy sources into the grid is driving the demand for gas-insulated transformers, which offer advantages such as reduced footprint and enhanced safety compared to traditional transformers. As a result, North America is poised for a positive trajectory in market growth, contributing to the overall expansion of the global gas insulated transformer market.

Market Report Scope

Gas Insulated Transformer Industry News

• In May 2022, Arteche, a leading global player in the electricity sector founded in 1946, and Hitachi Energy, a Swiss technology leader focused on sustainable energy solutions, received regulatory approval to finalize their joint venture, Arteche Hitachi Energy Instrument Transformers S.L. This new entity succeeds Arteche Gas Insulated Transformers (AGIT) and aims to accelerate the development of sustainable, environment-friendly gas-insulated transformers, with Arteche holding a 51% stake and Hitachi Energy owning 49%.
• In December 2021, Pfiffner, a manufacturer known for its innovative solutions in electrical engineering, and Trench Group, a leader in high voltage technology, jointly announced their commitment to developing SF6-free transformers. Traditionally, SF6 has been utilized for its safety properties in AIS High Voltage Instrument Transformers; however, it is recognized as a potent greenhouse gas that contributes to global warming when released into the atmosphere.

*Definition: The global gas insulated transformer market involves the manufacturing and sales of gas insulated transformers across various regions worldwide. Gas insulated transformers provide high reliability and safety as they use sulfur hexafluoride gas to insulate the transformer equipment. They take up less space compared to traditional oil-filled transformers. The global market consists of major players manufacturing and selling SF6 gas insulated distribution and power transformers primarily used in utilities, industrial plants, commercial buildings, and underground applications where space is at a premium.

Market Segmentation

•  Voltage Rating Insights (Revenue, US$ Bn, 2019 - 2031)
  • Low Voltage (less than 72.5 kV)
  • Medium Voltage (72.5 kV to 230 kV)
  • High Voltage (greater than 230 kV)
•  Cooling Type Insights (Revenue, US$ Bn, 2019 - 2031)
  • Oil-Cooled
  • Air-Cooled
•  End User Insights (Revenue, US$ Bn, 2019 - 2031)
  • Power Transmission and Distribution
  • Industrial
  • Others (including Renewable Energy, etc.)
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • ABB Ltd.
  • Alstom (now part of GE)
  • Bharat Heavy Electricals Limited (BHEL)
  • CG Power and Industrial Solutions Limited
  • Eaton Corporation
  • Efacec
  • Hitachi Energy
  • Hyundai Electric & Energy Systems Co., Ltd.
  • Siemens Energy
  • Schneider Electric
  • SGB-SMIT Group
  • Toshiba Corporation
  • Transformers and Rectifiers (India) Limited
  • Toshiba Corporation
  • ZTE Energy