Market Trends of Smart Transformers Industry
This section covers the major market trends shaping the Smart Transformers Market according to our research experts:
Distribution Transformers to Dominate the Market
- The growing emphasis on renewable energy generation across the world, coupled with increasing electrical infrastructure projects, is expected to drive the demand for distribution transformers during the forecast period, in turn driving the smart transformers market.
- In an electric distribution grid, smart transformers work independently to monitor and regulate the voltage while maintaining contact with the smart grid. This enables the information about the transformer and the power supply to be provided even by remote administration. Hence, this enables proper load management, resulting in better power quality and lesser power outages.
- In 2021, India was the third-largest electricity-generating nation in the world. The power is generated from both conventional and renewable sources. The country has made major strides in improving access to power among both rural and urban communities through various government-led schemes focused on Power for All. These systems have been largely driven through the use of distribution transformers.
- Furthermore, developed economies, such as the United States, European Countries, and Japan, contribute to the significant demand for smart transformers, owing to the increasing replacement of aging power distribution equipment and the increase in the integration of renewables into the grid.
- In February 2022, Ameren Missouri planned to upgrade its aging infrastructure and invest in smart technology across the state during the 2022-2027 period. Ameren filed its updated Smart Energy Plan with Missouri's Public Service Commission (PSC), pledging to put USD 8.4 billion toward replacing equipment, some of which is up to 50 years old, and setting new technology into practice to improve service and resiliency for its customers including expected distributed transformers.
- According to International Energy Agency, in 2021, USD 289 billion was spent on smart grid development, increasing from USD 262.6 billion in 2020. This trend is expected to continue in the coming years and further aid the growth of the market.
- Hence, distribution transformers are expected to dominate the market due to growing demand in large economies to further extend reliable distribution.
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Asia-Pacific to Dominate the Market
- Asia-Pacific has dominated the smart grid network market in 2018 and is expected to continue its dominance in the coming years as well backed up by countries such as China, India, and Japan.
- China has the ambition to become a world leader in electrical power equipment by 2025. This is a national strategy outlined in the Technology Roadmap (2017) of the Made in China 2025 program. Innovation and technology are heavily focused on in the federal program. Large amounts of funding are allocated to support the development.
- In India, the distribution segment is fraught with aging infrastructure, high network losses, and poor financial performances. To reduce these challenges, it is essential to augment the performance of sub-transmission and distribution networks. Smart transformers bring a notion of smartness. This smartness enhances the value for the end consumer through improved availability of electricity. The need and necessity for smart transformers in India are well established. It is, in fact, all the more relevant to be smart about the usage of energy and electricity to deliver low-cost electricity.
- Moreover, in remote places, where the cost of installation of power grids can be high, it becomes comparatively less expensive for the government to deploy renewable energy sources for power generation and increase the electrification rate, thus propelling the market for distribution transformers in the country.
- In February 2022, the Indian state government of Madhya Pradesh was set to expand and modernize its electricity network by deploying smart meters and smart grid technologies using EUR 140 million secured from German bank KfW. The modernization of the smart grid is expected to include all facets of technologies, including smart transformers. Such investments are expected to aid the growth of the market in the coming years.
- Hence, Asia-Pacific is expected to dominate the market due to its growing population, increasing purchasing power, and rising demand for energy.
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