The Asia-Pacific transformer market is expected to rise at a CAGR of more than 4.5% during 2020 - 2025. Factors such as increasing energy demands from the industries and expansion of transmission and distribution systems are likely going to drive the Asia-Pacific transformer market. However, delay in the implementation of the projects is expected to restrain the Asia-Pacific transformer market.
- Distribution transformer, due to the increasing number of new substation installation across the region, is expected to be the largest growing segment for the Asia-Pacific transformer market during the forecast period.
- A smart grid is seen as a highly efficient and economical technology that can reduce carbon emissions. Such up-gradation for now exiting networks in the region can create several opportunities for the Asia-Pacific transformer market in the future.
- Due to its increasing demand for electricity and the rising renewable energy installation and connecting them in the country's grid, China is expected to be the largest market for Asia-Pacific transformers.
Key Market Trends
Distribution Transformer Expected to Dominate the Market
- A distribution transformer or service transformer is used to provide the final voltage transformation in the electric power distribution system. It will then step down the voltage applied in the distribution lines to the level used by various customers of the residential, commercial, and industrial sectors.
- Countries in the Asia-Pacific region such as China, India, and Indonesia because of rapidly increasing urbanization and industrialization in the countries are expanding their existing transmission and distribution system by laying new transmission lines and installing new substations to fill the energy demand-supply gap in their respective country.
- In 2018, the electricity generation for Asia-Pacific was about 12273.6 Terawatt-Hour (TWh), which was higher than what the region produced in 2017, 11578.2 TWh. The increase in electricity generation exhibits an increase in the number of power generation capacity, which is likely to use new distribution transformers for transmission of electricity to the consumers.
- In 2019, Sterlite Power, India's leading private power transmission player, received a letter of award for two key inter-state projects worth over INR 3,000 crore for Udupi-Kasargode and WRSS 21 (Part B) involving lines and gas-insulated substations (GIS). The substation project is expected to use several distribution transformers to step-down and transmit electricity to the various end-user. This project involves 765 KV lines and GIS substations and is expected to be completed by the first quarter of 2021.
- In 2019, Linxon won an order of around USD 10 million from ObraBadaun Transmission Ltd in India as an upgrade for a turnkey gas-insulated substation (GIS) at Ujhani and Bilsi substation sites in the state of Uttar Pradesh, northern India. The contract consists of design, engineering, manufacturing, testing, and equipment delivery of a 400/220kV/132kV GIS substation, and also 30 bays of GIS 132 kV extensions to both sites. The commissioning of the new substation is expected to be for the later part of 2020.
- Hence, owing to the above points, the distribution transformer segment is likely to dominate the Asia-Pacific transformer market during the forecast period.
China Expected to Dominate the Market
- China, due to the rapidly increasing energy demand and an increasing number of commercial and industrial operations, the country is likely to be the largest market for the transformer in Asia-Pacific. The continually growing demand for power supply in the country is expected to drive the transformer market in the country.
- China's increasing industrial operations to surpass the United States to become a superpower in terms of economy is likely to drive the transformer market in the country. Moreover, the country's government is also locating several industries at the remote and rural locations for which it is likely to expand its transmission and distribution system to supply power.
- In 2018, China’s primary energy consumption was 3273.5 million tonnes of oil equivalent (MTOE), which was about 54.6% of the total primary energy consumed by Asia-Pacific. China's considerable share of energy demand is likely to create dominance over the transformer market in the region.
- In 2019, the power supply project for the China-Laos railway was inaugurated. The project is running along the China-Laos railway through five provincial administrative regions in northern Laos. It is likely to build twenty circuits of 115kV transmission lines with a total length of 268 km and extend 11 bays in 10 substations to supply power from the state-run Electricite du Laos' grid to 10 railway traction substations. Such several planned substations are expected to install several transformers in the project. The project is scheduled to be complete by the end of 2021.
- In 2019, ABB Ltd and the Chongqing Municipal People’s Government signed an agreement to build a smart manufacturing base of transformers in Chongqing’s Liangjiang New Area. According to the agreement, ABB Chongqing Transformer Co., Ltd. will move to Liangjiang New Area from Jiulongpo District and establish a world-leading transformer manufacturing base in the new site. The manufacturing plant is expected to be complete by the end of 2022.
- Hence, owing to the above points, China is expected to dominate the Asia-Pacific transformer market during the forecast period.
The Asia-Pacific transformer market is fragmented. Some of the key players in this market include Siemens AG, ABB Ltd., General Electric Company, Mitsubishi Electric Corporation, and CG Power and Industrial Solutions Ltd.
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