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Distribution Transformers Market Outlook

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.

Due to the need for transmission & distribution infrastructure to support these developments, distribution transformer shipments in the nation are anticipated to increase. Also, to create a robust and intelligent electrical grid over the whole nation, the Indian government is expanding its electrical network. To fortify sub-transmission and distribution networks in the nation's urban areas, the Indian government had as of February 2022 authorized investment projects of USD 4.12 billion for the Integrated Power Development Program; this is anticipated to support the expansion of the distribution transformer market.

Due to their large per capita electricity consumption, North America and Europe are also significant market regions. The expansion of infrastructure and governmental policies by international bodies like the World Bank to promote electricity will also result in major growth in Africa and Latin America.

Various developments have been going on in this market for the past years. Egypt agreed to a financial arrangement of USD 254 million in 2021 to improve its electricity distribution network. The Egyptian Electricity Transmission Company (EETC) and numerous Egyptian banks have struck a financial agreement that would enable the company to increase and extend the nation's transformer stations.

The construction of distribution transformers is anticipated to be a part of this initiative to expand the distribution network, which will accelerate the rise of the distribution transformer market. Also, in 2021, Siemens Energy obtained a contract to build 22 sets of distribution transformers at the first commercial 66 kV offshore wind farm in China, Yuhuan Offshore Wind Energy Project Phase 1, situated in Taizhou, Zhejiang Province. Such developments are expected to provide new routes to this market in the next ten years.

According to recent study, the distribution transformers market is expected to experience substantial growth, expanding CAGR of over 6% from 2021 to 2031.

The growth in demand is witnessing optimistic growth outlook. Rising trends and initiatives of smart grids for economic efficiency are projected to ascend the growth in demand over the coming years.

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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.

Rising Prominence of Smart Grid Technologies to Augment Sales

The adoption smart grids for power distribution systems is increasing in across the globe. The smart grids provide higher transmission efficiency and can quickly resume electric supply in case of power failures.

They also enable reduction in operation costs thus reducing the power cost for consumers. The upgradation in power distribution systems is likely to ascend the distributive demand. Moreover, increasing consciousness for green energy are projected to propel the growth in demand.

The substantial increase in investments in developed and developing countries for development of power infrastructure are anticipated to bolster the growth of distribution transformers industry.

Nikhil Kaitwade
Nikhil Kaitwade

Principal Consultant

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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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Who are the Key Manufacturers and Suppliers of Distribution Transformers

Some of the leading manufacturers and suppliers of in the market include

  • ABB Ltd,
  • Eaton Corporation PLC,
  • General Electric,
  • Brush Electrical Machines Ltd,
  • Kirloskar Electric Company Ltd,
  • Siemens AG,
  • Crompton Greaves Ltd,
  • Mitsubishi Electric Corporation,
  • Fuji Electric Co. Ltd,
  • SPX Transformer Solutions Inc.,
  • Bharat Heavy Electricals Ltd.,
  • Lemi Trafo Jsc, among others.

Leading manufacturers are focused on expansion of their manufacturing facilities along with sales and distribution network in emerging markets across the globe.

Also, continuing efforts are being made to further improve the cost and performance parameters. Attributing to the presence of number of global & regional players, the distribution transformers market witness high intensity of competition.

The report is a compilation of first-hand information, qualitative and quantitative assessment by industry analysts, inputs from industry experts and industry participants across the value chain.

The report provides in-depth analysis of parent market trends, macro-economic indicators and governing factors along with market attractiveness as per segments.

The report also maps the qualitative impact of various market factors on market segments and geographies.

Key Segments

By Product Type:

  • Pad Mounted
  • Pole Mounted
  • Underground Vault

By Insulation Type:

  • Dry
  • Liquid immersed

By Phase:

  • Single Phase
  • Three Phase

By Power Rating:

  • Up to 500 kVA
  • 501 kVA–2,500 kVA
  • 2,501 kVA–10,000 kVA
  • Above 10,000 kVA

By End Use:

  • Residential
  • Commercial
  • Industrial
  • Power Utilities

By Region:

  • North America
    • USA & Canada
  • Latin America
    • Brazil, Mexico, Others
  • Europe
    • Germany
    • Italy
    • France
    • United kingdom
    • Spain
    • Nordics
    • Benelux
    • Russia
  • South Asia & Pacific
    • India
    • ASEAN
    • Australia and New Zealand (ANZ)
  • East Asia
    • China
    • Japan
    • South Korea
  • Middle East and Africa
    • GCC Countries
    • Turkey
    • Northern Africa
    • South Africa

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Distribution Transformers Market

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