North America Power Transformer Market - Industry Dynamics, Market Size, And Opportunity Forecast To 2030

The North America power transformer market is projected to observe a revenue/growth opportunity of US$ 2,480.1 Million from 2022 to 2030 and reach US$ 6,438.0 Million by 2030, recording a CAGR of 6.4% during the projection period. Factors driving the market are increasing electricity demand and the growing adoption of three-phase power transformers. The demand for single-phase and three-phase power transformers is expected to remain strong over the near future. Three-phase transformers are used to ensure the seamless operation of large machinery by allowing voltage transformation using a smaller, lighter, and cheaper unit compared to three individual single-phase units. 

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 Factors pushing market growth

• Increasing electricity demand

The substantial increase in the overall demand for electricity from emerging nations globally is driving the demand for power supply equipment, which, in turn, is driving the market. The rising demand for electricity in emerging economies can be attributed to a rise in infrastructural development activities. Due to the rising demand for electricity from many businesses, including the manufacturing, petrochemical, mining, and construction sectors, the US consumes the highest amount of electricity on a per-capita basis.

Government initiatives in countries of North America to expand electricity production, distribution, and transmission facilities are also expected to drive the demand for power transformers. Additionally, the U.S. government's emphasis on the production of renewable energy is fuelling market expansion. Around 3.93 trillion kWh of electricity was consumed in the U.S. in 2021, primarily in the industrial sector.

• Increasing adoption of three-phase power transformers

For electric systems that need a balanced load and effective power transmission capabilities, three-phase power transformers are perfect. Due to their numerous benefits, including low cost, low weight, increased efficiency, easy installation, and assembly, three-phase power transformers are one of the most widely used devices for transporting, generating, and distributing power in North America.

Due to their ability to withstand high voltage, quick cooling systems, and multi-nodal integration systems, three-phase power transformers are employed in commercial, industrial, and healthcare facilities. Manufacturers prefer utilizing a single three-phase transformer because it is more powerful and effective than three single-phase transformers.

2100 high voltage transformers with a 345 kV rating existed in the US in 2015, and nearly 2400 were added in 2021, chiefly due to an increase in local construction projects.

Market Trends

Increasing construction of new projects in North America

The West Ashville substation project in the Town of Harmony, New York was launched by the National Grid in 2019. The project dealt with low voltage issues that would arise on the current electric transmission grid when the local load increased quickly. The new substation aimed to relieve stress on the current system.

NextEra Energy Transmission New York (NEETNY) designed a building project to modernise transmission lines in the counties of Niagara and Erie in March 2021 The project involves converting existing lines across 32 km (20 miles) in the two counties to 345 kV transmission lines. The project's goal is to assist Western New York to get more renewable hydropower power by expanding transmission capacity.

Restraints

Power Transformers Programs are costly

Copper, aluminium, and steel are the main materials utilized in the construction of power transformers. The increasing costs of these raw materials are making power transformers costlier, restricting their use in low- and middle-income countries. In addition, interruptions in the distribution and supply channels brought on by the COVID-19 pandemic are driving up the cost of power transformers. 

Volatility in raw material prices as well as the higher installation and maintenance costs of power transformers compared to current power distribution systems could hamper the market growth in the near future. The scarcity of high-quality electrical steel, the lengthy manufacturing and installation processes for power transformers, and the high capital expenditure necessary for the construction of the supporting infrastructure for trouble-free and reliable transformer operation are also expected to negatively impact the market over the forecast period.

Power transformers market suffered during COVID-19

The COVID-19 pandemic negatively impacted the growth of the transformers market. This resulted due to a significant decrease in the demand for electricity from industrial and commercial sectors, which led to the cancellation of upcoming power distribution projects and delays in those that were already underway.

The pandemic had a substantial impact on the United States energy sector in 2020. The United States Energy Information Administration (EIA) reports that the country's electricity demand decreased by 4.6% in 2020. According to the data, the US's electricity consumption decreased from 3,896 billion kWh in 2019 to 3,716 billion kWh in 2020. This resulted from the decision to temporarily stall commercial and industrial activities and government offices and businesses stalled their operations, which led to a 6% year-over-year decline in electricity use from 2019 to 2020.

Type Analysis

Based on type, the three-phase transformer segment held 85.9% market share whereas single phase transformer held 14.1% market share. The high demand for three-phase transformers can be attributed to their vast set of benefits, including the need for less space and material owing to their lightweight designs, which enable the efficient operation of massive machinery. Three sets of main and secondary coils, each twisted around an iron core, make up their construction.

The rising demand for electricity in the region is compelling the power industry to develop affordable alternatives. As a result, three-phase transformers are starting to outpace single-phase transformers in popularity, which is driving the segment growth. The three-phase transformer segment holds an opportunity of US$ 138.5 Mn from 2022-2030. During the same period, the single-phase transformer segment holds an opportunity of US$ 14.37 Mn. 

Cooling Analysis

Based on cooling, the oil-immersed segment held 57.8% share of the North America power transformers market in 2021. The dry type of segment held a market share of 42.2% in 2021. The creation of HVDC networks to meet the steadily rising demand for power is expected to emerge as the key driving force behind the growth of the oil-immersed transformer segment.

As power ratings and voltages rise, the use of oil-immersed transformers is expected to increase, accelerating the growth prospects of the segment. These transformers have a larger kVA to weight ratio, better short circuit strength, and greater resistance to transport damage. As a result, the segment is expected to continue to dominate in all the countries analyzed.

Insulation Analysis

Based on insulation, the oil segment held a 33.9% share of the power transformers market in 2021 and is further projected to observe segment growth during the forecast period. The rising focus of economies in the region to build more substations to match the significant increase in electrical capacity and demand as well as the growth of the industrial and commercial sectors is expected to positively impact the growth of the segment. The need for transformer oil is anticipated to increase because of properties associated with mineral oil, such as high thermal heating, oxidation durability, cost-effectiveness, and ease of supply.

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Rating Analysis

Based on Rating, the 101 MVA to 500 MVA segment held 37.8% share of the power transformers market in 2021 and is further projected to observe segment growth during the forecast period. The demand for power transformers in the 101 MVA to 500 MVA class has seen an increase because of the rising industrial demand for electricity. A flourishing real estate sector, rising transformer usage in the processing sectors, and infrastructural growth are expected to all contribute to increased demand. Increased investment in modernizing existing grid infrastructure and adopting smart transmission technology is also likely to support growth. 

Application Analysis

Based on application, the industrial segment held a 42.3% share of the market in 2021 and is further projected to observe segment growth during the forecast period. The industrial sector is the main user of power transformers. Power transformers are frequently used to change the power distribution voltage levels in industrial and mining operations, civil construction, and other end-use applications. The use of power transformers is anticipated to grow in the industrial sector at a CAGR of 7.3% due to the expansion of the industrial sector, which includes activities like construction, power plants, and others.

The rise in residential properties in the region is expected to drive the adoption of power transformers in the domestic sector in the near future.

Energy Source Analysis

Based on the energy source, the renewable energy segment held a 40.6% share in the market in 2021 and is projected to observe segment growth during the forecast period. Shifting energy needs and the rapidly depleting reserves of non-renewable power resources are making it essential for the power sector to work with more reliable sources. Renewable energy is quickly rising to the top of the list of preferred energy sources as more and more nations shift to sustainable energy. Renewable energy is now more widely harnessed than ever, and the trend is expected to remain strong in the near future as well. 

Distribution Transformer Analysis

According to the needs of the consumer, electricity is transformed by distribution transformers from a voltage level of 1 - 50 kV to a voltage level of 120 V + 1 kV. Distribution transformers have very high energy efficiency, often between 96% and 99%. However, because there are many distribution transformers in the electric power system and they have a long lifespan (30 to 40 years), even a slight increase in their efficiency could lead to considerable energy savings.

By substituting new forms of magnetic core materials, such as amorphous ribbons, with silicon steel cores, it is possible to further boost transformer efficiency. Rapid solidification of a liquid alloy results in the production of these materials, which has unique magnetic properties, including very low energy loss. However, these materials are thermally unstable and have a low saturation induction.

Country Analysis

The U.S. held the dominant share of 85.9% of the North America three-phase transformer market in 2021. The U.S. is likely to retain its dominance over the forecast period as well, thanks to the high consumption of electricity and the increase in the number of commercial and industrial operations.

List of Key Companies Profiled:

• General Electric Company
• Triad Magnetics
• Neeltran, Inc.
• Pacific Transformer Corp.
• Pico Electronics
• MPS Industries, Inc.
• Lenco Electronics
• Siemens AG
• Schneider Electric SE
• Hitachi, Ltd.
• Glen Magnetics, Inc.
• ABB Ltd.
• TBEA Co., Ltd.
• Other Prominent Players

Key Industry Players: 

The leading five companies accounted for a combined market share of nearly 60% in 2021. The major companies in the market include General Electric Company, Siemens AG, ABB, TBEA Co. Ltd., and Neeltran, Inc. Partnerships, product launches, and the development of innovative products are some of the strategies adopted by market players to remain competitive in the market. 

Growth strategies of key players:

• General Electric Company aspires to establish three market-leading, international public corporations with a focus on the aviation, healthcare, and energy industries. The company is well-positioned to move forward with this plan by capitalizing on the substantial momentum achieved from its financial and operational success.
• Siemens AG is concentrating on funding R&D initiatives to improve its portfolio. Through its "open innovation" philosophy, the company is further developing technologies.
• ABB Ltd. concentrates on active portfolio management, strategic industry leadership, and competitive operational performance improvement through technology, people, and strategic thinking.
• TBEA Co., Ltd. provides systematic solutions for the global energy industry and focuses on establishing itself as a trusted service provider globally. The company also concentrates on supplying China and the rest of the world with high-tech and high-value products that feature green technology, smart environment protection, dependability, and efficiency.

Segmentation Overview

(Note*: We also provide granular level reports, made to sub-segment level or only for niche segments. Contact us, if you require more details.)

The North America power transformers market is segmented into:

By Type

• Single-phase Transformer
• Three-phase Transformer

By Cooling 

• Dry Type
  • Self-Air
  • Air Blast
• Oil Immersed
  • Self-Cooled
  • Water Cooled
  • Forced Oil
  • Others

By Insulation

• Gas
• Oil
• Solid
• Air
• Others

By Rating

• < 100 MVA
• 101 MVA to 500 MVA
• 501 MVA to 800 MVA
• > 800 MVA

By Application

• Residential & Commercial
  • Hotels
  • Hospitals
  • Societies
  • Others
• Utility
• Industrial

By Energy Source

• Renewable Energy
  • Solar
  • Wind
• Hydroelectric Energy
• Nuclear Energy
• Others

North America

• The U.S.
• Canada
• Mexico