The global sales of power transformers are estimated to be worth USD 25.6 billion in 2024 and are anticipated to reach a value of USD 49.3 billion by 2034. Sales are projected to rise at a CAGR of 6.8% over the forecast period. The revenue generated by power transformers in 2023 was USD 4.9 billion. The industry is anticipated to exhibit a Y-o-Y growth of 6.1% in 2024.
The power transformer market is expected to perform very well because the scope of the industry is wide. Growth in the demand from prominent industrial regions is one of the main driving factors. According to the International Energy Agency (IEA), global electricity consumption is projected to increase by more than 25 % by the end of 2030, boosting the need for efficient electric transmission mediums like power transformers.
Also, the European Power Transmission and Distribution Association states that the energy transition to renewables impacts the traditional and other energy sources ‘Utilization’ policy. These regions are expected to invest heavily in upgrading aging infrastructure, with Europe alone projected to allocate over USD 30 billion by 2030 for power grid improvements.
| Attributes | Key Insights |
|---|---|
| Estimated Size, 2024 | USD 25.6 billion |
| Projected Size, 2034 | USD 49.3 billion |
| Value-based CAGR (2024 to 2034) | 6.8% |
The Association of Southeast Asian Nations (ASEAN) reported a steady rise in power consumption, driven by rapid industrialization. This is leading to increased investments in power transmission infrastructure in Asia Pacific region.
China and India are anticipated to invest heavily in smart grid projects, which are expected to push the demand for these transformers in the region by more than 8% annually. Global trends in the electrification of transportation and the expansion of renewable energy sources like wind and solar power are expected to create new opportunities for transformer manufacturers, further driving growth.
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The below table presents a comparative assessment of the variation in CAGR over six months for the base year (2023) and the current year (2024). This analysis reveals crucial shifts in market performance and indicates revenue realization patterns, thus providing stakeholders with a better vision of growth trajectory over the year.
The first half of the year, or H1, spans from January to June. The second half, H2, includes the months from July to December. In the first half (H1) of the semi-annual period from 2023 to 2033, the business is predicted to surge at a CAGR of 6.4%, followed by a higher growth rate of 7% in the second half (H2).
| Particular | Value CAGR |
|---|---|
| H1 2023 | 6.4% (2023 to 2033) |
| H2 2023 | 7% (2023 to 2033) |
| H1 2024 | 6.7% (2024 to 2034) |
| H2 2024 | 6.9% (2024 to 2034) |
Moving into the subsequent period, from H1 2024 to H2 2034, the CAGR is projected to be 6.7% in the first half and remain relatively moderate at 6.9% in the second half. In the first half (H1) the market is expected to witness a decrease of 30 BPS while in the second half (H2), the market is projected to see a decrease of 10 BPS.
Adapting Power Transformers for Renewable Energy Integration
Increasing consumption of non-conventional resources such as solar energy or wind power shows the necessity for transformers that are able to handle such variable and distributed generation.
Specifically designed for renewable energy applications, these transformers accommodate the variations of power generation and allow easy integration into the grid. This requirement arises from the intermittent nature of renewable energy sources, which demand flexible and responsive transformer solutions to maintain grid stability and reliability.
Manufacturers are therefore turning to create transformers, which contain smart technology that makes renewable energy integration. These transformers are critical in facilitating the energy transition towards more varied and low-carbon energy systems as the world moves towards a cleaner energy generation environment.
Government Initiatives and Investments Play Important Role in Driving Growth of Power Transformer Market
Policies aimed at increasing the role of renewable energy sources in power supply are being implemented by several governments to achieve climate sustainability and reduce emissions. To illustrate, the European Union has set the target of 32% of energy generated being through renewable energies by the year 2030, hence necessitating investments in high-voltage transmission systems.
According to the International Energy Agency (IEA), global power investment is expected to reach USD 2.1 trillion annually by 2040, with a significant portion allocated to grid expansion and electrification projects. Governments are directing funds toward building and upgrading transmission networks, with a focus on power transformers, to enhance grid reliability and facilitate the efficient transmission of electricity over long distances.
Economic Uncertainty and Financing Challenges
Geopolitical conflicts and difficulty in securing funds are two of the major restraints that impact the power transformers market. Energy sector investments throughout the world have decreased as a consequence of the recent impact of recession on many developed and developing countries.
Investment in large-scale high-voltage activities like transmission networks or establishing ultra-power transformers in most cases takes considerable capital investment. With economic recessions, investors are finding it inconvenient to seek funds from conventional sources like banks and lending facilities. The volatility in financial markets, interest rate fluctuations, and geopolitical factors further contribute to uncertainties in securing project funding.
Rising Electricity Consumption and Rapid Urbanization
The trend of urbanization, with the world’s population shifting to cities and metropolitan areas, is projected to bring more than 2.5 billion additional people to urban areas by 2050. In developing countries, this increase of urban dwellers will be accompanied by an increase in demand for electricity. As suggested by the International Energy Agency (IEA), world electrification will be increased by almost the same proportion by the year of 2040.
There exists a need for developing as well as modernizing power equipment to meet this demand. Governments and private entities are likely to allocate significant budgets to upgrade power transmission and distribution systems in urban areas. Also, the surge in electricity consumption, driven by factors such as the expanding digital economy and technological advancements, emphasizes the need for power transformers to maintain the strength and efficiency of power grids.
Principal Consultant
The global power transformer industry recorded a CAGR of 2.8% during the period between 2019 and 2023. The trend of the industry was positive as it reached a value of USD 24.1 billion in 2023 from USD 21.6 billion in 2019.
Before the pandemic, the power transformer industry witnessed a gradual increase in demand because countries all around the globe were enhancing their electricity supplying networks as a way of responding to growing energy demands.
Globally, the demand for electrical energy was rising, with an average annual rate of growth of 2.6% from 2015 to 2019 as stated by IEA. Important countries such as China and India were leading such developments.
In the year 2019, the total electricity consumption in China stood at about 7,230 TWh representing an increase of 4% from the previous year’s consumption of 6,911 TWh. This increase in electricity consumption was supporting the massive investment into power line systems, leading to more power transformer requirements in several industries.
With the advent of the pandemic in 2020, the power transformer market experienced a short-term decline, as supply chain issues and rapid industrial slowdown affected the industry. As IEA reported, because of the lockdowns that sealed many businesses and factories, electricity consumption decreased globally by 1%.
However, the use of electric power at home was on the rise as workers stayed indoors and worked from home. To deal with this recession, governments provided injections into the energy industry. For instance, in 2020, the USA government allocated USD 43 billion for grid modernization that would further stabilize demand for the product throughout the latter part of the year.
With the world slowly coming out of the pandemic, the power transformer market bounced back with great strength. With an increase in global power consumption of 6% in 2021, business activities and economies began to slowly come back to normal.
Improving electricity distribution networks and sustainable renewable energy sources became the new objectives of many countries. For example, Europe has committed to spending over USD 200 billion by 2030 in building up energy infrastructure, which includes power transformer installation. Besides, there is a growing interest in electric cargo cars, digitalization, and a move towards greener energy solutions, driving demand for transformers.
Tier 1 companies comprise market leaders with a market revenue of above USD 100 million capturing a significant market share of 40% to 50%. These market leaders are characterized by high production capacity and a wide product portfolio.
These market leaders are distinguished by their extensive expertise in manufacturing and reconditioning across multiple packaging formats and a broad geographical reach, underpinned by a robust consumer base. Prominent companies within Tier 1 include ABB, Siemens AG, General Electric, Schneider Electric, Toshiba Corporation, Emerson Electric Co., Mitsubishi Electric Corporation, and Hitachi, Ltd.
Tier 2 includes the majority of small-scale companies with a local presence having revenue below USD 100 million. These companies are notably oriented towards fulfilling local market demands and are consequently classified within the tier 2 share segment. They are small-scale players and have limited geographical reach. Tier 2, within this context, is recognized as an unorganized market, denoting a sector characterized by a lack of extensive structure and formalization when compared to organized competitors.
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The section below covers the industry analysis of the power transformer market for different countries. Market demand analysis on key countries in several regions of the globe, including North America, Asia Pacific, Western Europe, and others, is provided. The USA is anticipated to remain at the forefront in North America, with a value share of 56.5% by 2034. In East Asia, China is projected to witness a CAGR of 4.5% through 2034.
| Countries | Value CAGR (2024 to 2034) |
|---|---|
| China | 4.5% |
| United States | 4.8% |
| India | 5.3% |
| Japan | 7.1% |
| South Korea | 4.9% |
| Brazil | 8.0% |
By 2034, the Indian market is expected to reach over USD 3,912.8 million, growing at a CAGR of 5.3%. India’s power transformer market is poised for further expansion, as the requirements for energy and integration of renewable energy sources increase.
The need for large-scale renewable energy projects, particularly highlighted with Green Energy Corridors (GEC) and target of incorporating 500 GW renewable energy source by the end of year 2030, is one key factor pushing growth in India. This requires extensive upgrades in India’s transmission infrastructure, including the development of over 50,000 ckt. km of new transmission lines and 433,575 MVA of substation capacity, with an investment of USD 29.2 million.
These upgrades will play a critical role in enabling the efficient evacuation and management of renewable energy from major energy zones like Ladakh, Rajasthan, Gujarat, and Tamil Nadu. Also, cross-border grid expansions with countries like Nepal and Bangladesh, and investments in offshore wind capacity, further amplify the need for transformers.
Investments in both renewable energy transmission and regional grid interconnections, including projects like Power Grid Corporation’s REZ in Rajasthan, underscore the rising need for high-capacity, energy-efficient transformers. With a focus on energy transition, grid modernization, and increasing renewable capacity, India will continue to hold the largest market share in the South Asia Pacific region during this period.
The increase in power transformers’ prices and demand in the United States is attributed to the administration’s policies aimed at the modernization of power transmission networks. The strategy is to develop and restore long-distance overhead power transmission lines up to 100,000 miles in five years, utilizing USD 2.7 billion under the Grid Resilience and Innovation Partnership program.
The upgrades, such as the utilization of advanced technology, for instance, high-performance conductors, are meant to transform the current power grid into a more efficient one. Such an effort supports the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law, whose objectives are to prod as much as possible transition to cleaner energy sources and build the grid to be more resilient to extreme weather.
The United States dominates the North American power transformer market, accounting for approximately 58% market share in this region. It is estimated to grow at 4.8% CAGR. Projects like the Ten West Link, which will add 3.2 GW of capacity from solar projects, show how investments will increase the demand for better and more reliable power transformers to handle the higher power needs.
China added record amounts of solar and wind power in 2023, including 216.9 gigawatts (GW) of solar and 75.9 GW of wind capacity. In that regard, China undertook an infusion of USD 3.9 billion on power transmission and storage which entails building over 1,000 km of transmission lines in several provinces.
The purpose of this project will be to enhance the reliability of the grid for the challenge of transferring energy from generating sources located away from consumption centers. East Asia, led by China, makes up 53.5% of the power transformers market demand, and the growth of renewable energy infrastructure is set to increase the need for power transformers to support electricity loads and improve network connections.
The section contains information about the leading segments in the industry. By phase, the three phase segment is estimated to grow at a CAGR of 6.6% through 2034. Additionally, industrial usage is projected to expand at 6.3% CAGR through 2034.
| By Phase | Three Phase |
|---|---|
| Value Share (2034) | 63.7% |
The three-phase segment dominates the power transformer market, accounting for nearly 65% of the market share in 2024. This demand exceeds all others because three-phase power is more advantageous than single-phase for heavy-duty and high-load applications, common in most commercial and industrial facilities.
This is unlike single-phase power, which is the norm for domestic applications and only accounts for about 35% of the market. Still, within the structural framework of continued globalization and industrialization, the requirement for three-phase transformers continues to grow because, for large-scale activities, they are the preferred type of transformers.
| Application | Industrial |
|---|---|
| Value Share (2034) | 35.7% |
The industrial segment is a major growth driver in the global power transformer market, forecasted to generate over USD 8.5 billion in revenue by the end of 2034. The growing focus on integrating renewable energy sources and energy-efficient systems in big industrial plants increases the requirement for power transformers that can withstand high loads and complex energy systems due to advanced technologies.
Despite the stable power transformer demand from residential and commercial sectors as a result of urban expansion and development, the industrial sector is projected to take the lead by wide margins.
Globally, industrial demand is projected to account for over 65% of the total power transformer demand, compared to around 20% from the household sector and approximately 15% from the commercial segment. The growing global focus on sustainable energy solutions, along with the expansion of power-intensive industries, will further propel the growth of the industrial segment.
Significant players are introducing new products to address the increasing need for cutting-edge solutions in various end-use sectors. Geographic expansion is another important strategy that is being embraced by reputed companies. Start-ups are likely to emerge in the sector through 2034, thereby making it more competitive.
Recent Industry Developments in the Power Transformer Market
In terms of phase, the industry is divided into single phase and three phase.
In terms of type, the industry is divided into core and shell.
In terms of insulation, the industry is divided into dry and wet.
In terms of application, the industry is divided into generation step-up and transmission.
In terms of voltage, the industry is divided into 100-200 kV, 200-400 kV, and Above 400 kV.
In terms of end user, the industry is segregated into residential & commercial, utilities, and industrial.
Key countries in North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia Pacific, and the Middle East and Africa (MEA) are covered in the report.
The industry is projected to witness a CAGR of 6.8% between 2024 and 2034.
The industry stood at USD 24.1 billion in 2023.
The industry is anticipated to reach USD 49.3 billion by 2034.
Eastern Europe is set to record a high CAGR of 9.8% in the assessment period.
Schneider Electric and Toshiba Corporation are key players.
1. Executive Summary 2. Industry Introduction, including Taxonomy and Market Definition 3. Market Trends and Success Factors, including Macro-economic Factors, Market Dynamics, and Recent Industry Developments 4. Global Market Demand Analysis 2019 to 2023 and Forecast 2024 to 2034, including Historical Analysis and Future Projections 5. Pricing Analysis 6. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034 6.1. Phase 6.2. Type 6.3. Insulation 6.4. Application 6.5. Voltage 6.6. End User 7. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Phase 7.1. Single Phase 7.2. Three Phase 8. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Type 8.1. Core 8.2. Shell 9. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Insulation 9.1. Dry 9.2. Wet 10. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Application 10.1. Generation Step-up 10.2. Transmission 11. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Voltage 11.1. 100-200kV 11.2. 200-400 kV 11.3. Above 400 kV 12. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By End User 12.1. Residential & Commercial 12.2. Utilities 12.3. Industrial 13. Global Market Analysis 2019 to 2023 and Forecast 2024 to 2034, By Region 13.1. North America 13.2. Latin America 13.3. Western Europe 13.4. Eastern Europe 13.5. East Asia 13.6. South Asia & Pacific 13.7. Middle East & Africa 14. North America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 15. Latin America Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 16. Western Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 17. Eastern Europe Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 18. East Asia Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 19. South Asia Pacific Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 20. Middle East & Africa Sales Analysis 2019 to 2023 and Forecast 2024 to 2034, by Key Segments and Countries 21. Sales Forecast 2024 to 2034 by Phase, Type, Insulation, Application, Voltage, and End User for 30 Countries 22. Competition Outlook, including Market Structure Analysis, Company Share Analysis by Key Players, and Competition Dashboard 23. Company Profile 23.1. Schneider Electric 23.2. Emerson Electric Co 23.3. Toshiba Corporation 23.4. General Electric 23.5. Siemens AG 23.6. Mitsubishi Electric Corporation 23.7. ABB 23.8. EFACEC 23.9. Fuji Electric Co. Ltd. 23.10. Hitachi Energy 23.11. Hyundai Electric 23.12. JSHP Transformer 23.13. Wilson Transformer 23.14. CG Power & Industrial Solutions Ltd. 23.15. Shandong Taikai Power Engineering Co. Ltd. 23.16. BHEL 23.17. Sumitomo Electric 23.18. Kirloskar Electric Company Ltd. 23.19. Toshiba 23.20. Virginia Transformer Corp
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Power Transformer Market
