Global transformer market has witnessed a massive rise lately, in terms of revenue and volume, owing to the rising urbanization in the emerging economies as well as the dire need to replace aging transformer technology in the developed countries. Increasing awareness about energy conservation has led to the propagation of diverse R&D programs that have further resulted in the innovation of new transformers, like the amorphous metal transformers, that are far more energy efficient than ordinary transformers. As power utility increases across the industrial, residential and commercial sectors, transformer market share will continue to rise and is estimated to exceed USD 70 billion by 2024.
Europe Transformer Market Size, By Product, 2016 & 2024 (USD Billion)
Global population has exponentially increased from the 1950s, and is certain to cross a massive benchmark by 2050. This factor is likely to inevitably contribute toward the growing energy demand around the world, given that electricity has now emerged as one of the basic requirements that ensures a fulfilled lifestyle. Thus, the massive rise in global electric supply is expected to provide a major impetus to transformer market worldwide. Understandably, the rising need for electricity in remote locations and the increasing demand for information and telecommunication infrastructure will also contribute substantially toward stimulating the overall transformer industry.
With the growth of population and onslaught of modernization, rapid urbanization has a major role to play in the expansion of transformer market. It is estimated that by 2050, two thirds of the world’s total population will be living in cities. It is noteworthy to mention that among Tokyo, Delhi, Mexico City, New York and Shanghai, five of the largest cities across the globe, three of them are situated in the emerging economies. Providing such megacities with a population amounting to several billions with utilities calls for large electricity supplies. Thus, it is apt to state that transformer industry will grow in direct proportion to the increasing electricity demand and supply to urban regions.
Lately, renewable sources of energy have witnessed a growing demand owing the drastic climate change that is largely being attributed to the rise of greenhouse gases in the environment. The rise of CO2 in the atmosphere has reached alarming levels, on the grounds of which numerous initiatives are being implemented to arrest the rising CO2 emissions around the world. It has been made evident that the use of energy efficient transformers can conserve energy and thus reduce the level of CO2 emission in the atmosphere. In consequence, transformer industry has been depicting an exponential growth curve, as myriad regulatory initiatives to develop better transformers have been helping to curb the climate change with their energy efficiency.
Most countries around the world are looking to increase energy efficiency – a trend that has been favoring transformer industry through the growing popularity and demand for amorphous core metal transformers. Average and low categories of energy efficient electric instruments are now being phased out and replaced with ultra-high, very high and high energy efficient technologies. The evolution of new transformers will facilitate this phasing out, which would substantially drive transformer market.
Global refurbishment of the grid infrastructure to conserve energy and meet the rising energy demand has added to the growth of the transformer industry. Developing nations have also been increasing their infrastructural expenditure to accommodate and adopt smart transmission and distribution facilities, further stimulating transformer market. Emerging economies across the Asia Pacific are the depots for rising industrialization, which has exponentially increased the demand for high voltage networks in these regions. The industrial electrical networks that are already operational in North America and Europe, are now in need of being retrofitted with technologically advanced transformers, which has led to transformer industry witnessing a boost in these continents as well. For instance, the U.S. Federal Transit Administration has allotted USD 100 million in 2017 to bolster the existing electrical networks of the California rail infrastructure with upgraded technology, a move that has spurred U.S. transformer market.
Population expansion, increasing energy demand and deploying means of lowering CO2 emissions have not only galvanized the electricity demand but has also increased the demand for energy efficient components in power network, thereby augmenting transformer market. Key players in the transformer industry such as ABB, Crompton Greaves, General Electric, Kirloskar, BHEL, Toshiba Corp. and Hyundai Electric are investing in extensive R&D programs to make transformers more energy efficient, thus contributing to transformer market growth. As per estimates, transformer industry size is forecast to exceed 170,000 units by 2024.