Market Trends of Transformer Oil Industry
Transformer Application to Dominate the Market
- Transformer oil is used in transformers to preserve its core and windings. They also serve the purpose of preventing oxidation of the insulation. The transformer oil acts as a barrier between the atmospheric oxygen and the insulation. It is, thereby, avoiding direct contact and minimizing oxidation. Transformers are used in power transmission plants.
- China is the world’s largest electricity producer. The country’s top two utility operators are making large investments in green energy. The country is focusing on increasing its grid networks through ultrahigh-voltage (UHV) power transmission networks.
- The State Grid Corp of China announced plans in 2022 to invest USD 79 billion in domestic grid construction, an increase of 9 % year on year compared to 2021. Over the next 5 years, the company plans to build 38 UHV lines.
- In January 2022, the Cabin Cabinet Committee of Economic Affairs (CCEA) of India approved the second phase of the green energy corridor scheme. Here around 10,750 circuit kilometers (ckm) of transmission lines and around 27,500 mega volt-amperes (MVA) of sub-station capacity will be installed for renewable energy projects across the country.
- Further, according to the, India Brand Equity Foundation, the power generation capacity of India increased to nearly 400 GW in 2022. It represented an increase of nearly 4% compared to 2021.
- Japan is considering doubling its inter-regional power grid capacity to facilitate the expansion of renewable energy. It is in accordance with its goal to achieve carbon neutrality by 2050.
- Furthermore, in Germany, according to the Federal Ministry for Economic Affairs and Climate Action, Germany is at the heart of the European network. Its geographical location in the heart of Europe makes it a major player in the European power market and a hub for pan-European power flows. Germany is also increasing electricity exports to neighboring countries. Germany holds the largest power plant capacity in Europe and produces and consumes the most electricity.
- Owing to all these factors, the market for transmission oil is likely to grow globally during the forecast period.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region saw a notable growth in the transformer oils market, with countries such as China and India accounting for significant consumption of transformer oil.
- According to the International Energy Agency (IEA), the demand for power in China is expected to grow at a rate of 4.5% from 2022 to 2024.
- The Asia-Pacific thermal sector is registering growth, with China primarily driving the growth of the sector. China includes the most coal-fired power plants of any country or territory in the world. On the Chinese Mainland, as of July 2022, there were 1,118 operational coal power plants. It is approximately four times the number of such power plants in India, which came in second place. China accounts for more than 50% of the world's coal electricity generation.
- India is among the largest producers of electricity worldwide, and the growing population and increasing per capita electricity utilization are expected to drive the demand for power in the country.
- In March 2022, National Thermal Power Corporation (NTPC) announced readiness of the start of partial power generation of 10 GW from a 92 MW floating solar energy plant which was set up at NTPC's unit in Kerala. The company also announced that it will start commercial operations of 74.88 MW capacity of its 296 MW Fatehgarh solar project in Rajasthan. The growing power generation in India is increasing the demand for transformer oils.
- With the growing power generation and the increasing electricity grids in the Asia Pacific region, the market is expected to drive the growth of transformer oils in the forecast period.
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