The power transformer market is estimated to be valued at US$ 26.81 billion in 2024 and is expected to reach US$ 48.93 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 9% from 2024 to 2031.
To learn more about this report, request sample copy
Rapid industrialization and infrastructure development across major economies are driving significant investment in improving and expanding transmission and distribution networks. This is expected to increase the demand for power transformers for efficient power transmission and distribution over the coming years.
The market is witnessing growing adoption of smart transformers globally. The increasing deployment of renewable energy and growing emphasis on energy efficiency are propelling the demand for smart transformers. Additionally, the ageing existing grid infrastructure in developed markets is compelling utilities to replace legacy transformers with smart and digitally enabled solutions for effective grid management. This trend is expected to gather further steam in the coming years.
Aging power infrastructure
Many of the existing power grids and transmission infrastructure in developed as well as developing nations are aging and need replacement. Transformers are at the heart of these transmission and distribution networks and play a critical role in ensuring uninterrupted power supply. According to our analysis, power grids in the U.S., Europe, and parts of Asia Pacific average 25-35 years of age. The constant wear and tear over several decades has reduced their performance efficiency and reliability. Utilities and grid operators are under pressure to modernize and strengthen their transmission capabilities to meet the growing electricity demand. This provides a steady demand for the replacement of old and obsolete power transformers with new and more efficient models. Additionally, governments and regulatory bodies in different countries have also introduced stricter norms regarding transmission losses as part of their climate change commitments. This is further propelling the need for upgrades to limit energy wastage during long-distance bulk power transportation.
For instance, in 2022, the region produced approximately 14,546.4 TWh of electricity, which represented about 49.8% of the world's total electricity generation, according to the Energy Institute Statistical Review of World Energy 2023.
Economic growth and urbanization
Rapid pace of industrialization and infrastructure development especially in developing economies is fueling their electricity needs manifold. At the same time, trends like urbanization where majority of population is shifting bases to cities have led to dense localization of power consumption patterns. This has necessitated governments and private players to invest heavily in setting up new transmission corridors and substations, extending the distribution networks deep into rural hinterlands. As a result, the power transformer demand is expected to rise substantially in the coming years to support these capacity expansion initiatives. For example, countries like India and China undergoing massive urban transitions are undertaking ambitious projects like “Power for All” and “Rural Electrification” which would need setting up of thousands of new transformers. Similarly, construction of smart cities and developing industrial townships or special economic zones requires robust power supply infrastructure backbone which acts as a key demand driver
For instance, in January 2023, the State Grid Corporation of China revealed plans to invest approximately USD 77 billion in transmission infrastructure and energy storage systems for the year, marking a nearly 4.0% year-over-year increase.
Joining thousands of companies around the world committed to making the Excellent Business Solutions.
View All Our Clients