North America Transformer Market Trends

North America Transformer Market Overview

The North America Transformer Market was valued at USD 12,864.0 million in 2022. The Transformer Market industry is projected to grow from USD 13,311.8 million in 2023 to USD 20,450.2 million by 2032, exhibiting a compound annual growth rate (CAGR) of 4.9% during the forecast period (2023 - 2032). The North America Transformer Market is prominently influenced by many market-driven factors. Key drivers driving growth of North America Transformer Market includes increasing energy demands from industries and upgrading old transmission and distribution systems and rapid adoption of smart grid technology. Many transmission systems in North America are aging and in need of upgrades. Upgrading these systems involves replacing outdated equipment, including transformers, with more modern and efficient ones. This helps improve the reliability and capacity of the power grid, ensuring a stable supply of electricity to meet the growing energy demands.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

North America Transformer Market Trends

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  Increasing Energy Demands from Industries and Upgrading old Transmission and Distribution Systems

  
  

Industries in North America have been experiencing a growing demand for electricity. This increased demand is driven by factors such as industrial expansion, technological advancements, and the need for reliable power supply. As industries expand their operations, the demand for transformers to support power distribution and utilization also increases. According to the National Power System Development Program in Mexico, the National Electricity System witnessed a consumption of 333,662 GWh in 2022. This figure indicates a 3.4 percent annual increase and can be attributed to the recovery of all productive sectors of the economy post-pandemic. Looking ahead, it is projected that electricity consumption will continue to rise at an average annual rate of 2.5 percent between 2023 and 2037. Moreover, according to the Energy Information Administration (EIA), the power demand in the U.S., which reached a peak of 4,048 billion kilowatt-hours (kWh) in 2022, is expected to decrease to 3,984 billion kWh in 2023, before subsequently increasing to 4,068 billion kWh in 2024. Thus, the advancing demand for electricity in countries such as U.S. and Mexico is anticipated to drive the demand for transformers used for supplying the power to industries. 

Additionally, the aging infrastructure of transmission and distribution systems in North America requires upgrades to ensure efficient and reliable power transmission. Upgrading these systems involves replacing outdated equipment, including transformers, with modern and more efficient models. This helps improve the overall performance and reliability of the power grid.

According to the U.S. Energy Information Administration, the average duration of annual electric power interruption stood at 7 hours from 2017 to 2021. Electric utility companies in the U.S. are confronted with a significant obstacle in the form of escalating maintenance expenses associated with aging infrastructure. Approximately 70 percent of transmission lines in the U.S. are more than 25 years old and nearing the end of their typical 50-80 year lifespan. As time passes, various components of the infrastructure, such as transmission towers, transformers, and power lines, undergo deterioration, resulting in frequent breakdowns and power outages. According to the Department of Energy, power outages cost U.S. economy USD 28 billion to USD 169 billion annually.

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  Rapid Adoption of Smart Grid Technology

  
  

The development of autonomous, self-regulating smart transformers is becoming more prevalent in the North American transformer market. During the projected period, an increase in demand for smart transformers used in smart grids is anticipated to be one of the major drivers of market expansion. The integration of smart grid technology is being facilitated by favourable government policies, growing consumer focus on smart monitoring units, and the need for sustainable electricity networks. Smart grid technology enables the efficient monitoring and management of electricity supply systems, promoting energy efficiency and grid reliability. As a result, there is an increasing demand for advanced distribution transformers equipped with smart monitoring and communication capabilities.

The emphasis on grid modernization and smart grid initiatives in North America, particularly in the United States, has led to substantial investments in upgrading the aging power infrastructure. This has further driven the adoption of digital instrument transformers in the region. The focus on renewable energy integration and advanced grid management systems has also contributed to the demand for digital instrument transformers.

In recent years, the United States has been actively seeking to install smart grid systems all around the nation. Modernising and increasing the effectiveness of the U.S. electric grid while also enabling the absorption of renewable energy sources is considered as being largely dependent on the adoption of smart grids. In the U.S., a lot of utilities have installed advanced metering infrastructure (AMI) to track their customers' energy usage in real-time. More precise invoicing has been made possible by this technology, which has also improved consumer understanding of their energy usage. The U.S. Department of Energy (DOE) has started a number of projects to upgrade the electric grid and create cutting-edge grid technologies. The DOE works with utilities and other stakeholders through the Grid Modernization Initiative to update the grid infrastructure and advance the usage of renewable energy sources. Moreover, the U.S. government introduced the Smart Grid Investment Grant programme and announced grant of USD 3 billion (USD 600 million per year from 2022 to 2026) to build smart grids throughout the nation. The programme provided funding for initiatives including distribution automation, enhanced metering, and energy storage that attempted to enhance the performance of the electrical grid. Small-scale electrical systems known as microgrids can function on their own or be connected to the larger grid. To enhance grid stability and resilience during catastrophes or natural disasters, many utilities have implemented microgrids. Overall, the region's power infrastructure is gradually incorporating smart grid technology, which offer considerable advantages in terms of efficiency, dependability, and sustainability.

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  Escalating Population and Electricity Demand

  
  

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North America transformer industry is experiencing growing prospects as a result of the region’s rising population-related need for power. As a result of the population's continual growth, more people now depend on electricity to run their homes, businesses, and public infrastructure. Technological advancements, the widespread use of electronic devices, and the rising popularity of electric vehicles all contribute to the surge in electricity consumption. This upward trend in demand necessitates the expansion and upgrading of the electrical grid, which, in turn, requires the installation of new transformers. According to the U.S. Energy Administration, the electricity generation in the U.S. witnessed an increase from 4,109.70 billion Kwh in 2021 to 4,188.40 billion Kwh in 2023. Thus, the advancing production of electricity in the region is anticipated to drive the demand for transformers over the forecast period.

The region's need for energy has been rising steadily over time as a result of a number of reasons, including population increase, technological development, and lifestyle shifts. The demand for power rises in tandem with America's expanding population. More electricity is needed to power more people's homes and businesses. Additionally, the increasing usage of electronic devices, appliances, and other energy-consuming machinery is a result of technological advancements. Electricity is needed for these devices to function, and as their popularity grows, so does the demand for electricity. Additionally, alterations in lifestyle, including a greater reliance on air conditioning, the usage of electric vehicles, and a rise in the need for entertainment gadgets, have all boosted the demand for electricity. The expansion of manufacturing and construction industries across North America also makes a substantial contribution to the rise in electricity demand. The demand for electricity from renewable sources like solar and wind is anticipated to rise as more states establish ambitious renewable energy objectives, adding to the rising need for electricity. Due to all of these factors, the North America transformer market has seen growth and is even anticipated to grow much more strongly throughout the anticipated time.

North America Transformer Market Segment Insights

Transformer by Type Insights

Based on type, the North America Transformer Market is segmented into dry type and oil-filled. Oil-filled stands as the major segment in the North America Transformer Market, generating a substantial revenue of USD 7,566.5 million by 2022. Oil-type transformers can be ground, pad or pole mounted for outdoor use. These products provide excellent performance in a variety of applications, including transmission and distribution networks, renewable energy generation and small businesses. The oil transformer is very efficient, saves a lot of electricity, reduces power loss, saves energy resources and reduces user costs. In addition, engine oil cools the internal wire cores, which contributes to the durability and electrical properties of the transformer equipment.

Transformer by Power Rating Insights

Based on power rating, the North America Transformer Market is segmented into <500 kVA, 500 kVA-2500 kVA, 2500 kVA-10,000 kVA and >10,000 kVA. Among these, <500 kVA emerges as the dominant force as transformer widely used in residential and commercial purpose. Transformers are an important part of the electrical grid. They step up or step-down voltages as needed, to keep the grid running smoothly, safely, and efficiently.

Transformer by Phase Insights

Based on phase, the North America Transformer Market is segmented into single phase and three phase. Among these, three phases emerge as the dominant segment in the market. A three-phase transformer consists of three primary and three secondary coils and is represented as 3-phase or 3ɸ. Three-phase transformers can be constructed in two ways. Three identical single-phase transformers are connected to form a bank of three-phase inverters, or alternatively, a single unit of a three-phase transformer with the windings of three phases wound on a single core. Three-phase transformer products are widely used in industrial and mining industries, textile machinery, printing, packaging, petrochemical industry, schools, shopping malls, elevators, post and telecommunication, medical machinery, office equipment, testing equipment, industrial machinery equipment, etc.

Transformer by Voltage Insights

Based on voltage, the North America Transformer Market is segmented into low, medium and high. Among these, low voltage emerge as the dominant segment in the market. Low-voltage transformers operate with input voltages below 600 V. These transformers are used in measuring or monitoring devices or as auxiliary power source in motor control panels. These transformers are used in a variety of standard and special applications, including commercial buildings, on board of vessels as well as in deep mines and industrial environments.

Transformer by Mounting Insights

Based on mounting, the North America Transformer Market is segmented into pad, pole and others. Among these, pad mounting emerge as the dominant segment in the market. A pad-mounted transformer is a special type of housing for large transformers that can be positioned in places that are open to the public. Tamper-resistant construction, tamper-proof nuts and screws, locked compartments with hinged doors, bottom entry of primary and secondary cabling, and baffled ventilation holes (if applicable) are common features of the transformers.

Transformer by End-User Insights

Based on end-user, the North America Transformer Market is segmented into industrial, utility and residential & commercial. Among these, utility emerge as the dominant segment in the market. Transformers are used for many purposes in electric power services. For example, to reduce the voltage of conventional power circuits to operate low-voltage devices, such as doorbells and toy electric trains, and to raise the voltage from electric generators so that electric power can be transmitted over long distances. Moreover, Transformers are important in oil and gas plants because they provide stable power to critical equipment. It is responsible for adjusting the stable voltage level to meet the specific requirements of various devices such as motors, pumps, arcs and control systems.

Transformer Key Market Players & Competitive Insights

Major market players are spending a lot of money on R&D to increase their product lines, which will help the North America Transformer Market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the North America Transformer Market industry must offer cost-effective products to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the global Transformer industry to benefit clients and expand the North America Transformer Market sector is to manufacture locally to reduce operating costs. The market for Transformer is recognized as being extremely competitive and fragmented. The market for Transformer offers considerable potential opportunities for domestic and unorganized companies. Some of the key players operating in the North America Transformer Market are General Electric (GE), Eaton, Hammond Power Solutions, Hammond Power Solutions, Olsun Electrics Corporation, MGM Transformer Company, Virginia Transformer Corp, Northern Transformer Corporation, Prolec-GE Waukesha, Inc., VanTran Transformers. These companies have a strong presence in the region and offer a wide range of products and services, such as distribution transformers, power transformers, instrument transformers, dry type transformers, oil immersed transformers, and transformer services.

Olsun Electrics Corporation - In November 2023, introduced this year the new MTM XS600-P10 for core cutting and an additional line to increase the production capacity for more and bigger transformer mitre cores. In addition to advanced cutting programs, the new line has the latest technology in electronic components and mechanical controls for cutting.

Eaton- In October 2023, Eaton is invested $85 million to expand its North American manufacturing operations to meet growing demand for its utility solutions. This investment helped company to support the energy transition and electrification efforts by increasing the production of critical equipment such as underground protective connectors, transformers, and voltage regulators.

Key Companies in the North America Transformer Market includes

• Hammond Power Solutions


• General Electric (GE)


• WEG


• Eaton


• Olsun Electrics Corporation


• MGM Transformer Company


• Virginia Transformer Corp


• Northern Transformer Corporation


• Prolec-GE Waukesha, Inc.


• VanTran Transformers