Market Trends of Distribution Transformer Industry
Oil-filled Transformer Type to Dominate the Market
- Oil-filled transformers use liquids for cooling, making them highly suitable for outdoor applications. They are more efficient, have longer service lives, and feature more reliable overload capabilities.
- A liquid is a medium used for enhanced cooling, and such kinds of transformers are a better option than the dry types. The biggest advantage of an oil-filled transformer is that it can handle higher ratings and overloads.
- Countries like the United States, China, and India are expanding their transmission and distribution networks to increase their electrification rates, which is expected to drive the oil-filled distribution transformer market. For instance, the Indian government aims to electrify all households under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana.
- Further, in accordance with the growth in electricity generation, there is an increase in the number of power generation stations, which will require new distribution transformers to supply electricity to consumers. According to U.S. Energy Information Administration, a total of 4,243 terawatt-hours (TWh) of electricity were generated in the United States in 2022, an increase of approximately 3% over the previous year.
- In September 2022, Baoding Tianwei Baobian Electric Co. Ltd. (BTW), a subsidiary of Baoding Tianwei Group Co. Ltd. based out of China, developed a 110 kW transformer using natural ester insulating oil. The first new Class 1 energy-efficient, intelligent 110 kV natural ester-insulated oil power transforme has passed all the type tests in one go under the witness of the National Transformer Quality Supervision and Inspection Center.
- In a bid to decarbonize its power sector, China is investing heavily in renewable energy, creating ample opportunities for distribution transformers to expand the country's market. The country is expected to increase its average annual investment in the distribution network, boosting the demand for oil-filled distribution transformers.
- Moreover, oil-filled distribution transformers are subject to periodic oil analysis, cleaning, and general inspection of working components, and repair costs are lower than for dry-type distribution transformers. Hence, oil-filled distribution transformers are expected to dominate the distribution transformer market during the forecast period.
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Asia-Pacific to Dominate the Market
- Asia-Pacific is expected to be the largest and fastest-growing region for the market due to the increasing power generation capacity and electricity demand, particularly in China and India.
- China has witnessed high electricity demand, owing to the unprecedented growth of the economy coupled with factors such as rapid industrialization and urbanization. China's economy grew rapidly in recent years and maintained a positive growth rate during the COVID-19 pandemic.
- In China, utilities and governments are developing new generation projects, particularly renewable energy ones, to meet the rising electricity demand. This is likely to require transmission and distribution infrastructure to accommodate these projects, which is expected to drive the growth of distribution transformers in the country.
- In March 2022, the State Grid Corporation of China (SGCC), the country's main grid operator, ordered two 110 kilovolt, 63 megavolt, ampere EconiQTM power transformers from Hitachi Energy for an innovative substation project being carried out in Jiangsu Province on China's east coast. This project aims to advance the use of sustainable technology, which is consistent with the policies of SGCC and Hitachi Energy.
- In Australia, the electricity infrastructure is nearing the end of its lifespan. It has become crucial to refurbish or renovate the electricity distribution network to increase renewable energy generation. Moreover, the country has been taking initiatives to modernize its energy infrastructure, for which the government invests nearly USD 5 billion each year into the distribution network.
- The Indian government is strengthening its electrical network to build a strong and smart electrical grid throughout the country. As of February 2022, the Indian government approved projects worth USD 4.12 billion under the Integrated Power Development Program to strengthen sub-transmission and distribution networks in urban areas of the country, which is expected to aid in the growth of the distribution transformer market.
- Owing to the abovementioned factors, the Asia-Pacific region is likely to dominate the market during the forecast period.
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