The gas insulated transformer market is expected to grow at a CAGR of more than 3% over the period of 2020 - 2025. Gas-insulated transformer usage has been mainly encouraged by lack of space for the construction of new substations and up-gradation of existing ones in densely populated urban areas where non-flammable and non-polluting transformers have become a necessity. Factors such as an increase in power consumption, rise of an influx of renewable sources in the energy mix, along with upgradation and modernization of aging infrastructure are expected to drive the market in the forecast period. The high cost of gas insulated transformer is likely to restrain the growth of the gas insulated transformer market in the coming years.
- The utility sector is expected to be the fastest-growing market during the forecast period, owing to factors like growing demand for reliable power supply and an increase in investments on the power infrastructure.
- Globally, the focus has increased on investments in clean energy projects and the development of renewable energy. As a result, the extensive development of new renewable projects, and rising electricity usage is likely to create an excellent opportunity for the gas insulated transformer market in the future.
- Asia-Pacific has dominated the gas insulated transformer market in recent years and is expected to witness significant market growth in the forecast period, with the majority of the demand coming from China and India.
Key Market Trends
Utility Sector to Dominate the Market
- Utility sector is expected to witness significant growth in the forecast period, owing to factors like rising electricity demand, and increasing investment in power infrastructure.
- The global electricity production of 20,433 TWh in 2008, grew over 30% and reached 26,614 TWh in 2018. With the rise in population and urbanization, the electricity demand is bound to grow and with it, the gas insulated transformer is expected to grow in the forecast period.
- The robust economic growth in China reached nearly 7%, and the gross electricity consumption grew by 7.7%, exceeding 7,000 TWh, for the first time in 2018. China has witnessed high rates of demand for electricity, owing to the unprecedented growth of the economy, along with the rapid industrialization and urbanization of the region.
- Increasing demand for clean energy is one of the primary drivers for the utility sector and, in turn, for the gas-insulated transformers in the sector. Electricity generation from renewable energy sources grew by around 14% from 2166.5 TWh in 2017 to 2480.4 TWh in 2018.
- Therefore, with the increase in the demand for electricity and in particular clean energy, the utility sector is expected to rise, and in turn the market is expected to grow for gas is insulated transformers in the utility sector.
Asia-Pacific to Dominate the Market
- Asia-Pacific has dominated the gas insulated transformer market in 2019 and is expected to continue its dominance in the coming years as well.
- Asia-Pacific is one of the fastest-growing regions in the world because of the increasing population, urbanization, and industrialization. As a result, the demand for guaranteed power supply is high. For addressing these demands, many countries are investing in the renewable energy sector and transmission and distribution infrastructure.
- As per the International Energy Agency (IEA), the world’s most populated country China is likely to install 36% of total worldwide hydroelectricity generation capacity and 40% of all global wind energy between 2015-2021. Already, China has over 259,000 MW of new coal plants in various stages of development and accounts for more than 1/3 of the global coal plant pipeline. Gas-insulated transformers are the most obvious choice for these developments owing to factors like low maintenance and safety.
- On the other side, the coal consumption rate of India registered a growth rate of 8.7% in 2018, which indicated that the country is still highly dependent on coal for energy generation. India is also investing heavily in the renewable sector heavily, with USD 11.1 billion invested in 2018 alone. The majority of these investments were directed towards the development of wind and solar farms. Gas-insulated transformers are a viable option for all the new and upgradation projects due to the factors like lower maintenance, and higher safety of the gas insulate transformers.
- These, in turn, is likely to propel the demand of the gas insulated transformer in the region during the forecast period.
The gas insulated transformer market is partially fragmented. Some of the key players in this market include Hyosung Heavy Industries Corp, Toshiba Corp, Mitsubishi Electric Corporation, General Electric Company, and Trench Group.
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