Distribution Transformer Market Size

Global Distribution Transformer Market Overview:

Distribution Transformer Market Size was valued at USD 12.9 Billion in 2023. The distribution transformer market industry is projected to grow from USD 14.06 Billion in 2024 to USD 25.8 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 7.88% during the forecast period (2024 - 2032). Increasing system efficiency and a rise in power production capacity plans around the world are the key market drivers enhancing the market growth.

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

In order to support the American transformer supply chain, which is a crucial component of energy grids, U.S. senators have introduced The Distribution Transformer Efficiency & Supply Chain Reliability Act of 2024, new legislation that would set new, realistic energy efficiency standards and help stabilize domestic transformer manufacturing to meet rising demand without aggravating current supply chains or jeopardizing U.S. steel production. 

The U.S. Department of Energy released a proposed rule in January 2023 that might exacerbate distribution transformer supply chain issues already present as well as shortages of associated parts. To the detriment of US steel producers, such as Ohio-based Cleveland-Cliffs, the proposed rule, if it is approved, would force all distribution transformers to switch from the industry standard grain orientated electrical steel (GOES) cores to amorphous cores.

Distribution Transformer Market Trends

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  Microgrid and power generation and transmission technology advancements drive market growth

  
  

The market CAGR for distribution transformer is being driven by the increased acceptance and demand for more flexible electrical transformers as a result of the development in microgrid 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 industrialisation 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 utilise 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 (NTU 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.

Distribution Transformer Market Segment Insights:

Distribution Transformer Insulation Type Insights

The distribution transformer market segmentation, based on insulation type includes liquid immersed, dry. The liquid category held the largest market share. Liquids are used to cool oil-filled transformers, making them suitable for outdoor use. They offer more dependable overload capabilities, are more efficient, and last longer. These types of transformers are preferable to dry kinds since they use a liquid as a medium for optimum cooling. The ability to handle higher ratings and overloads is the most significant advantage of an oil-filled transformer.

Distribution Transformer Mounting Insights

The distribution transformer market is divided into three segments based on mounting: poles, pads, and subterranean vaults. The pads category is predicted to rise during the forecast period, owing to their use in a variety of ground distribution loads and their suitability for use in renewable energy installations.

Distribution Transformer Phase-Type Insights

The distribution transformer market segmentation, based on phase-type, includes three-phase and single phase. Three phase category is seeing significant market growth as a result of their wide range of applications, which include supplying huge loads, power transmission of electrical grids in power generation, and increasing deployment in the transmission and distribution sector. 

Three phase transformers are more cost effective than single phase transformers for supplying huge loads and large power distribution. Three phase transformers are becoming more popular due to their numerous advantages, including their smaller and lighter construction and superior working characteristics.

Figure1: Distribution Transformer Market, by Phase-Type, 2024 & 2032 (USD Billion)

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

Distribution Transformer Power Rating Insights

The distribution transformer market segmentation, based on power rating, includes Up to 500 MVA, 501 MVA-2,500 MVA, 2,501 MVA-10,000 MVA and above 10,000 MVA. Up to 500 MVA category held the largest market share of 63.8% in 2022 and are predicted to grow at the fastest rate of 7.7% from 2022 to 2032. The up to 500 MVA transformers find application in the amplitude of field, such as industrial usage to powering a vehicle engine. The increasing demand for transformers in the up to 500 MVA range is being driven by industrialisation and urbanisation.

Distribution Transformer Regional Insights

By region, the study provides the market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American distribution transformer market is expected to grow at a 9.1% annual rate between 2022 and 2032. Rising attempts to replace current electrical equipment with energy-efficient and smart systems will boost product demand. The United States administration agreed in February 2020 to raise taxes on derivative steel and aluminum imports by 25% and 10%, respectively. The increase in prices causes an increase in operating expenses, stifling market expansion.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: Distribution Transformer Market Share By Region 2022 (Usd Billion)

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

Europe’s distribution transformer market accounts for the second-largest market share due to its industrial dominance, Europe needs a modernized power grid just as much as it needs to implement renewable energy sources. Further, the German distribution transformer market held the largest market share, and the UK distribution transformer market was the fastest-growing market in the European region

The Asia-Pacific Distribution Transformer Market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to the rapid rise in industrial and manufacturing facilities. Moreover, China’s distribution transformer market held the largest market share, and the India distribution transformer market was the fastest-growing market in the Asia-Pacific region.

Distribution Transformer Key Market Players & Competitive Insights

Leading market players are investing heavily in R&D to expand their product lines, which will help the distribution transformer market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, distribution transformerindustry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the distribution transformer industry to benefit clients and increase the market sector. In recent years, the distribution transformer industry has offered some of the most significant advantages to medicine. 

Major players in the distribution transformer market, including Eaton Corporation (Dublin), and General Electric (U.S.). Mitsubishi Electric Corporation (Japan), Ormazabal (Spain), SP Transformer Solutions Inc. (U.S.) and others, are attempting to increase market demand by investing in R&D operations.

Enel X is the world's leading provider of demand response, as well as products and services for energy transformation at the residential, city, and industrial levels. Enel X is dedicated to the domains of electric public transportation, smart homes and smart cities, intelligent public lighting, renewables integration, and energy efficiency for enterprises and public administrations by applying solutions deriving from the digital transformation to the energy sector. In December 2020, Enel X, the Enel Group's  have announced intentions to create microgrids in Puerto Rico. 

The initial project will include onsite solar generating and battery storage at Eaton's Arecibo plant, which will produce circuit breakers for use in homes, buildings, and a variety of industrial uses. During instances of excess generation, Eaton will be able to transfer renewable energy back onto Puerto Rico's electrical system.

BTW, or Baoding Tianwei Baobian Electric Co., Ltd., is a Chinese maker of power transformers and other electrical equipment. It is one of China's leading transformer producers, alongside competitors Tebian Electric Apparatus (TBEA) and the XD Group. Wind turbines are manufactured by the company. TWBB's wind turbine business received a 300 million RMB contract in 2009 to supply 33 wind turbines to the Zhuozi wind farm in Inner Mongolia, the company's first wind turbine agreement. In September 2022, Baoding Tianwei Baobian Electric Co. Ltd announced the development of its 110KV natural ester oil transformer. The ester oil used in the transformer has a natural deterioration rate of 98% and a higher ignition point.

Key Companies in the distribution transformer market include

• ABB Ltd,


• Siemens AG,


• Eaton Corporation PLC,


• Schneider Electric SE,


• General Electric Company.

Distribution Transformer Industry Developments

In September 2019:At the 24th World Energy Congress in Abu Dhabi, Huawei Technologies Co., Ltd., a Chinese telecommunications equipment provider, unveiled a series of AI-based and 5G innovative energy solutions. To widen the concept of sustainable energy development, the company collaborated with over 500 energy CEOs, 70 energy ministers, and several other partners.

In September 2019:ERMCO, Inc., a Tennessee-based manufacturer of oil-filled distribution transformers and transformer components, committed around USD 12 million in the development of its manufacturing operations in Dyersburg. According to corporate authorities, Tennessee is the ideal place for this growth due to the state's innovative manufacturing industry.

In September 2019:ERMCO announced a $12 million investment proposal for a manufacturing facility in Dyersburg, Tennessee, USA, which will create 150 new employment in Dyer County.

Distribution Transformer Market Segmentation

Electrical Substation by Insulation Type Outlook

• Liquid Immersed


• Dry

High Voltage Transformer by Mounting Outlook

• Poles


• Pad


• Underground Vault

 Distribution Transformer by Phase-Type Outlook

• 3-Phase


• Single Phase

 Distribution Transformer by Power-Rating Outlook

• Up to 500 MVA


• 501 MVA-2,500 MVA


• 2,501 MVA-10,000 MVA


• Above 10,000 MVA

Distribution Transformer Regional Outlook

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  North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


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  Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


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  Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


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  Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America