The global transformer oil market size reached USD 4,015.2 million in 2022. Over the forecast period 2023 to 2033, global transformer oil demand is anticipated to rise at an 8.8% CAGR. Total market value is predicted to increase from USD 4,348.8 million in 2023 to USD 10,140.8 million in 2033.
| Attributes | Key Insights |
|---|---|
| Transformer Oil Market Size in 2022 | USD 4,015.2 million |
| Estimated Transformer Oil Market Value (2023E) | USD 4,348.8 million |
| Projected Transformer Oil Market Revenue (2033F) | USD 10,140.8 million |
| Value-based CAGR (2023 to 2033) | 8.8% |
Integrating renewable energy sources like wind and solar into the power grid requires transformers to facilitate the transmission and distribution of electricity. Transformer oils play a crucial role in the insulation and cooling of these transformers. Developing countries are investing in grid modernization to enhance the efficiency and reliability of power distribution networks.
Upgrading and replacing aging transformers with modern designs that use transformer oils with improved properties contributes to market expansion. The aging infrastructure of transformers in several regions creates a need for replacements. As older transformers are phased out, new, more efficient models filled with high-quality transformer oils are installed, driving growth.
The growth of industries, especially in emerging economies, leads to increased electricity consumption. Industrial applications often require large transformers; transformer oils are essential for insulating and cooling these units.
The increasing reliance on data centers for digital services has created a significant demand for reliable backup power solutions. Transformer oil is preferred for ensuring uninterrupted operations in these critical facilities.
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Market to Expand Over 1.6X by 2033
The global transformer oil market is predicted to expand over 1.6X by 2033, amid a 3.8% increase in expected CAGR compared to the historical one. The global electricity demand continues to expand, driven by population growth, urbanization, and increased industrialization. As power generation and distribution systems rise to meet this demand, the need for transformers and transformer oils also increases.
Ongoing infrastructure development projects, including the construction of power plants, substations, and transmission lines, contribute to the expansion of the transformer oil market. These projects require transformers filled with insulating oils to ensure efficient and reliable power distribution.
Integrating renewable energy sources like wind and solar into the power grid requires transformers to facilitate the transmission & distribution of electricity. Transformer oils play a crucial role in the insulation and cooling of these transformers.
The increasing frequency of natural disasters, coupled with the expansion of infrastructure in remote and off-grid areas, further propels the adoption of transformer oil, driving the market's anticipated growth over the forecast period.
Advancements in generator technologies, improved fuel efficiency, and the rising focus on sustainable power solutions contribute to the positive trajectory of the global transformer oil market. By 2033, the total market revenue is set to reach USD 10,140.8 million.
As per the latest analysis, East Asia is expected to expand substantially in the global transformer oil market during the forecast period. It is set to hold a significant market share in 2033. This is attributed to the following factors:
Principal Consultant
Sales of transformer oil grew at a significant CAGR between 2018 and 2022. Total market revenue reached about USD 4,015.2 million in 2022. In the forecast period, the worldwide transformer oil industry is set to thrive at a CAGR of 8.8%.
Significant increase in the growth rate in the historical period was due to the rising number of power generation and distribution projects across developed & developing countries across the globe. The market was significantly impacted by the outbreak of the COVID-19 pandemic, owing to the country-wide shutdown of manufacturing & industrial hubs and postponement of ongoing projects.
The market is expected to witness a high growth outlook owing to the significant expansion of the power sector, the rise of electric grids in developing countries, and the modernization of electric grids in developed economies. Higher growth prospects of the market are further accelerated owing to investments in the expansion of transmission and distribution (T&D) systems and grid networks by developing economies.
Electric Grid Expansion in Developing and Developed Countries
The primary drivers of the global transformer oil market are the expansion & development of electric grids and the upgradation of electric grids due to increased industrialization and urbanization. The expansion of the grid network and T&D system in developing countries is anticipated to accelerate with the rising power demand brought on by industrialization and urbanization.
Throughout the forecast period, the market for transformer oil will experience high growth. This is due to the installation of new transformers and switchgear as a consequence of the expansion of the grid network and transmission & distribution systems.
The increase in power requirements, which is anticipated to surge transformer oil consumption globally, is another important aspect that will facilitate the installation of transformers. Technological advancements and increasing research & development efforts from leading players have also contributed to the market's recent success.
These aspects are anticipated to fuel the transformer oil market's expansion throughout the course of the forecast period.
Global Power Transmission and Distribution Infrastructure
The propensity toward renewable sources for electricity generation is promoting the growth of electric power plants and the installation of transmission & distribution infrastructure. With the growing installation of power plants, demand for transformer oil is also expected to rise at strong rates worldwide.
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The table below shows the estimated growth rates of the top five countries. India, Italy, and Germany are set to record high CAGRs of 10.1%, 8.4%, and 7.6%, respectively, through 2033.
| Countries | Value-based CAGR (2023 to 2033) |
|---|---|
| India | 10.1% |
| Italy | 8.4% |
| Germany | 7.6% |
| China | 7.0% |
| United States | 8.0% |
China is poised to remain at the epicenter of market growth for transformer oil, driven by several pivotal factors such as industrialization, rapid urbanization, and ongoing infrastructure development. The country is expected to remain the prominent global consumer of transformer oils owing to the substantial presence of several end-use industries.
China is expected to surge at a CAGR of 7.0% by 2033. The significant presence of key players, availability of abundant resources, and increasing investments in product innovations are key factors driving the transformer oil market in China.
The emphasis on energy security and resilience in key sectors such as manufacturing, construction, and information technology further amplifies the need for transformer oil. The government's strategic initiatives, including investments in sustainable and smart technologies, align with the growing market trends.
Such initiatives would help in fostering a favorable environment for transformer oil's continued dominance. As a global economic powerhouse, China's robust demand for backup power solutions, driven by diverse industries, solidifies its position as a key player in the ongoing expansion of the transformer oil market.
India is expected to remain the fastest-growing market for transformer oil consumption globally. Significant development in the manufacturing & industrial sectors and growing urbanization would influence growth in India. Further, the country is witnessing a substantial increase in public and private projects to expand electric grids & several government initiatives for electricity accessibility to the country's population.
The growing focus on renewable energy sources, such as solar and wind power, requires a robust power transmission & distribution network. Transformer oils play a crucial role in maintaining the efficiency and reliability of transformers in these networks.
India has a significant number of aging transformers and electrical infrastructure. Upgrading and modernizing these systems will drive the replacement of transformer oils, creating new opportunities for manufacturers.
The United States transformer oil market is projected to surge at a remarkable 8.0% CAGR. This surge in demand can be attributed to the rising usage of transformer oil in data centers, where reliability and uninterrupted power are important.
With the rapid growth of digitalization, cloud computing, and the Internet of Things (IoT), there has been a significant expansion of data centers in the United States. These data centers house several servers and electronic equipment that require transformers for power distribution.
Data centers rely on transformers to efficiently manage and distribute electrical power within their facilities. Transformers are crucial for stepping up or down voltage levels to ensure a reliable and stable power supply to several equipment and systems.
As data centers require high levels of continuous processing power, transformers operate under heavy loads, and efficient cooling is essential to maintain their optimal performance. Transformer oil plays a vital role in cooling transformers and preventing overheating. With their capacity to provide seamless operations during power outages, transformer oil emerges as an indispensable data center asset, fueling substantial growth in the United States.
The growth of grid infrastructure, the replacement of aging transformers, and the general energy demand all impact Germany's transformer oil industry. The need for transformer oils is also influenced by the expansion of the energy industry, which includes renewable energy initiatives in Germany.
Urbanization, industrialization, and the requirement for a steady power supply drive the demand for transformers and, by extension, transformer oils. Market expansion is further facilitated by investments in modernizing and enlarging the infrastructure of the electrical grid.
Environmental standards and regulations have had an impact on Germany's transformer oil market. As firms look to comply with rules and lessen their impact on the environment, they are increasingly choosing transformer oils that are biodegradable and environmentally benign. These factors are expected to drive the transformer oil market in Germany.
In line with worldwide patterns, Italy is seeing a rising demand for bio-based transformer oils and eco-friendly substitutes. Corporate sustainability objectives and legal regulations are the driving forces behind this change.
The upkeep and modernization of current transformers influence transformer oil demand in Italy. Utilities and industrial facilities fund these initiatives to guarantee the dependability & durability of their transformer equipment. The goal of ongoing research and development in Italy's transformer oil market is to create oils that have better performance attributes, like increased oxidation resistance, longer service life, and thermal stability.
The below section shows the transmission and distribution segment dominated by end-use. It is forecast to thrive at an 8.4% CAGR between 2023 and 2033. Based on oil type, the mineral oil segment is anticipated to hold a dominant share through 2033. It is set to exhibit a CAGR of 8.3% during the forecast period.
| Top Segment (End-use) | Transmission and Distribution |
|---|---|
| Predicted CAGR (2023 to 2033) | 8.4% |
With the increasing demand for electricity worldwide, power infrastructure is continuously expanding, including the development of new transmission and distribution networks. This expansion requires the installation of transformers, which drives the demand for transformer oil.
The global electricity market is consistently rising due to population growth, urbanization, and industrialization. This necessitates the establishment of new power generation & distribution facilities, contributing to the demand for transformers and transformer oil.
Integrating renewable energy sources, such as wind and solar power, into the existing power grid requires the installation of transformers. Transformer oil is essential for the insulation and cooling of these transformers, further boosting the demand.
The transmission and distribution segment is expected to witness a CAGR of 8.4% for transformer oil consumption over the forecast period. Due to the growing need for continuous electricity supply, the rapidly increasing power transmission and distribution projects among developed & developing industries are the key factors boosting demand.
| Top Segment (Oil Type) | Mineral Oil |
|---|---|
| Projected CAGR (2023 to 2033) | 8.3% |
Due to its affordability compared to alternative oils, mineral oil is frequently used in transformer oil composition. Except for big transformers, mineral oil is still extensively utilized, even though interest in bio-based and synthetic lubricants is growing among consumers.
The transformer industry has long relied on mineral oil as a reliable and conventional option. Mineral oil is set to be used in several transformers all around the world and is still the norm for certain uses.
Growth of the mineral oil segment is primarily attributable to the rising environmental concerns and high demand for eco-friendly products globally. In addition, increasing investment in manufacturing environmentally friendly and renewable products is expected to bolster the segment's growth.
Exxon Mobil Corporation, Nynas AB, Apar Industries, Phillips 66 Company, Chevron Corporation, Repsol, Sinopec, and Shell PLC are the leading manufacturers and suppliers of transformer oil listed in the report.
Key transformer oil companies are investing in continuous research to produce new products and increase their capacity to meet end-user demand. They are also inclined toward adopting strategies to strengthen their footprint, including acquisitions, partnerships, mergers, and facility expansions.
Recent Developments in the Transformer Oil Market
| Attribute | Details |
|---|---|
| Estimated Market Size (2023) | USD 4,348.8 million |
| Projected Market Size (2033) | USD 10,140.8 million |
| Anticipated Growth Rate (2023 to 2033) | 8.8% |
| Historical Data | 2018 to 2022 |
| Forecast Period | 2023 to 2033 |
| Quantitative Units | Value (USD million) and Volume (KT) |
| Report Coverage | Revenue Forecast, Volume Forecast, Company Ranking, Competitive Landscape, Growth Factors, Trends, and Pricing Analysis |
| Market Segments Covered | Oil Type, End-use, Application, Transformer Capacities, Region |
| Regions Covered | North America; Latin America; Europe; East Asia; South Asia Pacific; Middle East and Africa |
| Key Countries Covered | Germany, France, United Kingdom, Italy, Spain, Russia, Rest of Europe, United States, Canada, Mexico, China, India, Japan, South Korea, Australia, Rest of Asia Pacific, Brazil, South Africa, GCC Countries, Kingdom of Saudi Arabia, Others |
| Key Companies Profiled | Royal Dutch Shell; Exxon Mobil Corporation; Repsol; Nynas AB; Sinopec Lubricant Company; APAR Industries; Petro China Company Limited; Savita Oil Technologies Limited; Chevron Corporation; M&I Materials Limited; Petro-Canada; Gandhar Oil; Lubrita; Phillips 66 Company; Ergon, Inc. |
The market was valued at USD 4,015.2 million in 2022.
The market value is set to reach USD 4,348.8 million in 2023.
Global transformer oil demand is anticipated to rise at an 8.8% CAGR.
The market size is set to reach USD 10,140.8 million in 2033.
The transmission and distribution segment is expected to lead the market.
1. Executive Summary 2. Market Overview 3. Key Market Trends 4. Key Success Factors 5. Global Market Demand Analysis 2018 to 2022 and Forecast, 2023 to 2033 6. Global Market - Pricing Analysis 7. Global Market Demand (in Value or Size in USD million) Analysis 2018 to 2022 and Forecast, 2023 to 2033 8. Market Background 9. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Type 9.1. Mineral 9.1.1. Paraffinic 9.1.2. Napthenic 9.2. Silicone 9.3. Bio-based 10. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Application 10.1. Switchgear 10.2. Reactor 11. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by End-use 11.1. Transmission and Distribution 11.2. Power Generation 11.2.1. Coal 11.2.2. Nuclear Plants 11.2.3. Wind Energy 11.2.4. Solar 11.2.5. Others 11.3. Railways and Metros 12. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Capacities 12.1. LV Transformers 12.1.1. Up to 50 Kva 12.1.2. 50 to 100 Kva 12.1.3. 100 to 500 Kva 12.1.4. Above 500 Kva 12.2. MV Transformers 12.2.1. Up to 1 Mva 12.2.2. 1 to 5 Mva 12.2.3. Above 5 Mva 12.3. HV Transformers 12.3.1. Up to 10 Mva 12.3.2. 10 to 50 Mva 12.3.3. 50 to 100 Mva 12.3.4. 100 to 500 Mva 12.3.5. Above 500 Mva 12.4. Traction Transformers 12.4.1. Up to 5 Mva 12.4.2. 5 to 10 Mva 12.4.3. 10 to 15 Mva 13. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, by Region 13.1. North America 13.2. Latin America 13.3. Europe 13.4. Middle East and Africa 13.5. East Asia 13.6. South Asia and Pacific 14. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033 15. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033 16. Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033 17. South Asia and Pacific Market Analysis 2018 to 2022 and Forecast 2023 to 2033 18. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033 19. Middle East and Africa Market Analysis 2018 to 2022 and Forecast 2023 to 2033 20. Country-wise Market Analysis 2023 to 2033 21. Market Structure Analysis 22. Competition Analysis 22.1. Apar Industries Limited 22.2. Chevron Corporation 22.3. Exxon Mobil Corporation 22.4. Ergon, Inc. 22.5. Gandhar Refinery (India) Limited 22.6. China Petroleum and Chemical Corp (Sinopec Corporation) 22.7. Shell plc. 22.8. Nynas AB 22.9. Savita Technologies Ltd. 22.10. Repsol SA 22.11. Philips 66 22.12. PetroChina Company Limited 22.13. Petro-Canada Lubricants Inc. 22.14. M&I Materials Limited 22.15. Lubrita 23. Assumptions and Acronyms Used 24. Research Methodology
Chemicals & Materials
July 2024
REP-GB-15814
305 pages
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Transformer Oil Market
