The United States distribution transformer market is expected to rise at a CAGR of more than 3% during 2020 - 2025. Factors such as increasing energy demands from the industries and upgrading old transmission and distribution systems are likely to drive the United States distribution transformer market. However, delay in implementing some of the national level projects is expected to restrain the United States distribution transformer market.
- The oil-filled segment, having a liquid as a medium for cooling application, is better than dry type and is expected to be the largest growing segment for the United States distribution 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-grading for now exiting networks in the region can create several opportunities for the United States distribution transformer market.
- Increasing renewable energy installation and connecting them into the country's grid is expected to drive the United States distribution transformer market.
Key Market Trends
Oil-Filled Segment 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.
- Oil-filled transformers use flammable liquids for cooling, making them highly suitable for outdoor applications. It is considered to be more efficient, having a longer service life, and features more reliable overload capabilities.
- The United States has access to 100% electricity for several years now. Still, ongoing increasing energy demand in the country and the upgrading of outdated transmission and distribution systems are likely going to drive the country's distribution transformer market.
- In 2018, the electricity generation in the United States was about 4460.8 Terawatt-Hour (TWh), which was higher than what the country produced in 2017, 4302.5TWh. The increase in electricity generation reflects an increase in the number of power generation capacity, which is likely to use new distribution transformers to transmit electricity to the consumers.
- In 2019, the California Public Utilities Commission granted San Diego Gas & Electric (SDG&E) a permit to construct the Artesian 230-kV Substation Expansion Project in San Diego County, Calif. The commission added that SDG&E’s stated purpose for the proposed project is to build a new substation to meet the mandatory North American Electric Reliability Corporation (NERC) reliability criteria. The project is also planned to installtwo additional 69/12kV, 30 MVA transformers with oil containment basins located in the western portion of the county, with elements within the City of San Diego.
- Hence, owing to the above points, the oil filled segment is likely to dominate the United States distribution transformer market during the forecast period.
Increasing Renewable Energy Expected to Drive the Market
- • The United States, due to the constant increase in energy demand and an increasing issue related to the greenhouse gas emission, is witnessing a large installation in the renewable energy capacity, which requires a large number of distribution transformers to transfer electricity from the substations to the consumers.
- • In 2019, the country's total renewable energy installation capacity was 294.504 gigawatts (MW), which was more than the installed capacity of 2018, 246.596 gigawatts (MW). Moreover, the country expected to increase renewable energy mix from 19% in 2019 to 38% in 2050, thus surpassing energy from coal, nuclear, and natural gas. This is likely to drive the distribution transformer market in the country.
- • Moreover, California and Texas, have massive installations of solar in their counties; these solar farms, which are either built or proposed, are expected to connect into the state grid via transmission lines and transfer electricity through transformers to the consumer.
- • The United States has several offshore wind energy projects that have a status of under-construction, proposed, or got clearance from the government. All these projects require transmission lines and distribution systems to transmit electricity from the offshore facility to the onshore. These offshore wind installations are likely to install substations with several transformers to step-down the voltage from the wind farm.
- • Hence, owing to the above points, increasing renewable energy is expected to drive the United States distribution transformer market during the forecast period.
The United States distribution transformer market is fragmented. Some of the key players in this market include Siemens AG, ABB Ltd., General Electric Company, Schneider Electric SE, and Emerson Electric Co.
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