Distribution Transformer Market Growth Report, Trends and Forecast-2030

The Distribution Transformer Market is expected to grow from US$ 25.45 billion in 2022 to US$ 48.76 billion by 2030; it is estimated to grow at a CAGR of 8.5% from 2022 to 2030.

Analyst Perspective:

A service transformer offers the final voltage transformation in the system of electric power distribution, stepping down the voltage used in the distribution lines to the level used by the customer. Distribution transformers in the market usually do not operate at full load; they are designed to offer maximum efficiency at lower loads. Voltage regulation in these transformers is kept to a minimum to improve efficiency. Thus, these transformers are designed to have small leakage reactance. Transformers smaller than 500 kVA are generally called distribution transformers. Distribution transformers with voltage distribution less than 33 kV are used in industries, while 380V/220V distribution transformers are used for domestic purposes. The number of customers supplied by a single distribution transformer changes depending on the number of customers in an area. Many homes may be fed off a single transformer in urban areas; rural distribution may require one transformer per customer. A large commercial or industrial complex would require multiple distribution transformers. Pad mount transformers are used in urban areas and neighborhoods where the primary distribution lines run underground.

Market Overview:

The distribution transformer market encompasses power and distribution transformers, which have experienced significant growth in recent years with the increasing demand for electricity across various industries and regions. Transformers are essential components in power generation, enabling efficient transmission, distribution, and regulation of electrical energy. Their ability to modify voltage levels ensures the reliable delivery of electricity to end-users. Transformers play a fundamental role in power generation by facilitating the efficient transmission and distribution of electrical energy. These devices enable the conversion of voltage levels, allowing electricity to be transferred over long distances with minimal losses.

According to Indian Electrical and Electronics Manufacturers Association statistics, the output of the market has climbed by 7% while the production of power transformers has only increased by 2%.

According to the International Energy Agency, the amount of wind-generated power reached more than 2 100 TWh in 2022, an all-time high rise of 265 TWh (up 14%). After solar PV, this technology saw the second-highest increase among all forms of renewable energy. However, the average annual generation growth rate has to rise to roughly 17% to keep up with the Net Zero Emissions by 2050 Scenario, which anticipates over 7,400 TWh of wind power output in 2030.

According to the India Brand Equity Foundation, India had 168.4 GW of installed renewable energy capacity (including hydro) as of January 31, 2023, making up 40.9% of the nation's total installed power capacity. Estimates place solar energy's contribution at 63.3 GW, followed by wind energy at 41.9 GW, biomass energy at 10.2 GW, small hydropower at 4.92 GW, waste-to-energy at 0.52 GW, and hydropower at 46.85 GW. Thus, the market is growing.

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Distribution Transformer Market: Strategic Insights

Market Size Value in	US$ 25.45 billion in 2022
Market Size Value by	US$ 48.76 billion by 2030
Growth rate	CAGR of 8.5% from 2022 to 2030
Forecast Period	2022-2030
Base Year	2022

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Market Driver:

Microgrid and Power Generation and Transmission Technology Advancements Driving the Distribution Transformer Market

The growth of the distribution transformer market is being driven by the increased acceptance and demand for more flexible electrical transformers as a result of the development of microgrids and energy utilities. Many applications in the electronics industry run on 5V, 6V, 9V, 12V, 24V, and 48V in step-down transformers. Step-down transformers are also used extensively in the electrical industry. As the use of microgrids and power systems in the electrical industries grows, so does the use of step-down transformers. This is because step-down transformers are used in electrical distribution systems for very high voltage applications to ensure a low loss and cost-effective solution for long-distance power delivery requirements.

Furthermore, the power transformers market is expanding due to rapid industrialization and rising domestic power demand. Demand for power is continually increasing, which has increased the consumption of energy resources. As a result, the world currently has more power plants and vast transmission networks. Electricity usage in the automobile industry is increasing due to the development of advanced electric vehicles and incentives to utilize them. The majority of power plants are located in remote places; the electricity generated is then carried to substations through HVDC power transmission lines before being supplied to end consumers following step-down. For instance, Hitachi ABB Power Grids and Nanyang Technological University, Singapore (N TIJ Singapore) will collaborate on a government-led smart grid development initiative in 2021. The Energy Research Institute and the National Research Foundation of Singapore will work together to enhance breakthroughs in Solid State Transformer (SST) technology. The effort is part of Singapore's Energy Grid 2.0 initiative, which intends to shape the next-generation grid system and improve energy management by integrating different energy sources into a single intelligent network that is more efficient, sustainable, and resilient.

Also, the increasing power generation and electricity consumption around the world correspond to one of the major factors positively affecting the demand for distribution transformers. In addition, the expanding population of the world and rising investments in the growth of smart cities by governing agencies of several countries are boosting the application of these transformers in commercial, industrial, and residential complexes. In addition, due to growing energy security and environmental concerns, governing agencies are executing stringent policies to decrease carbon emissions and advance the adoption of these transformers and renewable energy. The market growth can be credited to initiatives undertaken to facilitate the source of electricity in rural areas. Apart from this, rising deals of electric vehicles (EVs) on account of prompt urbanization and advancing income levels are establishing a positive outlook for the market. In addition, the launch of EV charging stations worldwide is presenting lucrative growth opportunities to key players operating in the industry. Additionally, key players are extensively investing in research and development activities of transformer production and focusing on upgrading the present infrastructure to minimize power failures, which is expected to provide a favorable market outlook. Thus, microgrid power generation and transmission technology advancements are driving the market.

Segmental Analysis:

Based on the mounting, the market is segmented into a pole, pad, and underground. The pad-mounted distribution transformer is placed on the ground. Based on Insulation, the market is bifurcated into dry and oil-filled. Based on phase, the market is bifurcated into single and three. The phase variants are used for industrial and high-power requirements. On the basis of power, the distribution transformer market is segmented into Lip to 0.5 MVA, 0.5 MVA-2.5 MVA, 2.5 MVA-IO MVA, and above 10 MVA. Based on the application, the market is segmented into residential, commercial, industrial, and utility.

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Regional Analysis:

The distribution transformer market is dominated by the Asia Pacific, followed by North America, Europe, the Middle East, Africa, and South America. An increase in manufacturing activity and electrification initiatives in Asian countries, including India, Bangladesh, and Vietnam, is a significant driver for the market. The excessive growth in the number of manufacturing and industrial units has boosted demand for these transformers. The increase in railways, metros, IT hubs, commercial centers, bullet trains, etc., requires the use of distribution transformers for stable and reliable electricity supply.

Rapid urbanization has increased the demand for the distribution transformer market. The growth in the transmission infrastructure and the number of power generation plants has increased sales. The African continent will have the maximum potential out of the five regions. Electrification of the African continent in the coming decade will boost the distribution transformers market growth. The incorporation of renewable energy in the electrical grid in grown and developing countries has increased investment in electrical power systems and boosted the market. Modernization and automation of electrical infrastructure in the European and North American regions will stimulate growth for the market.

Key Player Analysis in the Distribution Transformer Market:

The prominent market players in the market are ABB, Distribution Transformer Equipment Corporation, Siemens, Schneider Electric, G.E., Eaton, Mitsubishi Electric Corporation, CG Power, B.H.E.L., Toshiba, and Industrial Solutions Limited, Amran Inc, Trench Group, Indian Transformers Company Ltd, Mehru Electrical & Mechanical Engineers (P) Ltd,  PFIFFNER Distribution Transformers Ltd, and EMEK Electrical Industry Inc. This research looks at the market revenue, market shares, business strategies, current trends, and growth rates of the top companies when establishing these firms' player position in the market, recent events such as research activities, geographical expansions, acquisitions, new solution/product releases, and technic breakthroughs are taken into account.

Recent Developments: 

Inorganic and organic strategies such as acquisitions and mergers are highly adopted by companies in the distribution transformer Market. A few recent key developments are listed below: 

• The State Grid Corporation of China (SGCC) March 2022, the country's main grid operator, ordered two 110-kilovolt, 63-megavolt, ampere EconiQTM power transformers from Hitachi Energy for an innovative substation project carried out in Jiangsu Province on China's east coast. This project aimed to advance the use of maintainable technology, which is consistent with the policies of SGCC and Hitachi Energy.