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The massive deployment of distributed energy resources (DER) and two-way power flow is intensifying the need for strong distribution transformer infrastructure. One of the biggest upshots of distributed generation is the demand for smart/solid-state transformers for voltage management in smart grids. The accelerated sales of smart/solid-state transformers in North America, Germany, China, and India and the rising interest from the UAE, Saudi Arabia, and Brazil are expected to propel the global transformers market toward $35.45 billion by 2022.
"Grid modernization, smart grids, and new rapid transit rail networks with high-speed trains and electric vehicle (EV) charging stations are expected to fuel demand for smart/solid-state transformers,” said Farah Saeed, Digital Grids Research Director at Frost & Sullivan. "To make the most of this burgeoning demand, original equipment manufacturers (OEMs) should invest heavily in setting up manufacturing plants in the frontier nations. Partnering with local resellers and OEMs will give them a huge advantage when trying to penetrate the Asia-Pacific market, especially Southeast Asia."
Frost & Sullivan’s recent analysis, Global Transformers Market, Forecast to 2022, focuses on the important trends in the distribution, power, isolation, and smart transformers markets. It also analyzes the drivers and restraints of the overall global transformers market and presents the top growth opportunities through 2022.
While expanding their footprint, it is important for OEMs to make sure that the design of their transformer meets the stipulations set by the regulatory bodies in a particular country or region. They should also have a clear understanding of the service requirements of the end user before launching their product. This could require them to adjust their distribution transformer design to offer modularity as well as smaller ratings and footprint. The quality of value-added services also will be a key differentiator in a tough competitive environment.
"The global market faces stiff competition from Chinese and South Korean manufacturers due to their higher-volume sales and lower-priced transformers," noted Saeed. "The top five market leaders have to innovate business models or risk losing market share to creative and emerging companies."
In addition to Asia, OEMs from low-cost European countries such as Slovakia and Romania are flooding the market. However, as utilities are stepping up their demand for reliable and advanced solutions, these low-cost players will find it hard to compete against market giants like ABB, Siemens, Alstom, CG Global, and Toshiba.
With geographic expansion emerging as a top growth opportunity for the transformers market, OEMs are most likely to flock to:
- Europe: Transformers in Europe have reached the end of their lifetime. OEMs will be eager to make the most of the region's need for a €600 (or approximately $697) billion investment in its networks by 2020.
- Middle East: The high growth in electricity consumption is a key driver. The UAE will experience 4.5 percent to 5 percent growth between 2015 and 2022, while Qatar is expected to grow at 8 percent to 10 percent.
- North America: Substantial investments through upgrades, replacements, and expansion of the present and future transmission & distribution (T&D) infrastructure will drive the transformer market.
- Asia-Pacific: The T&D investments in Asia-Pacific are anticipated to reach $3.1 billion between 2014 and 2035.
Global Transformers Market, Forecast to 2022 is part of Frost & Sullivan’s global Grids Growth Partnership Service program.
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