The global distribution transformers market is set to rise from $13.74 billion in 2015 to $16.67 billion in 2020.
The global distribution transformers market is set to rise from $13.74 billion in 2015 to $16.67 billion in 2020, at a compound annual growth rate of 5%, according to information released by research and consulting firm GlobalData.
The company’s latest report* finds that the need to expand and upgrade existing distribution infrastructure to serve the growing demand for electricity will lead to a positive growth of the distribution transformers market over the forecast period. It will be driven by the emerging economies of Asia-Pacific (APAC) and the Middle East, where extensive power plant capacity additions, economic growth, and the need to improve access to electricity are fuelling grid expansion and the distribution transformers market.
Swati Gupta, GlobalData’s analyst covering power, commented: “There have been comparatively low new distribution transformers installations in North America, while most of the market growth is contributed by the replacement market wherein the older transformers – more than 25 years-old – are being replaced with new.”
Similarly, many developed European countries such as the UK and Germany have ageing grid systems and need to upgrade the distribution infrastructure. In developing regions, the market is expected to witness tremendous growth. The APAC region will reach $7.66 billion by 2020, in line with increasing industrialisation, rural electrification and the corresponding increase in grid loading. Currently, there is a trend away from the Americas towards emerging economies, such as those in the APAC region (China and India) and Latin America.
Gupta notes: “Companies are starting to relocate their activities to these emerging countries owing to their low-cost advantage. There is also high growth in domestic demand for electricity in these areas, creating good potential for transformers. In this way, the modernisation and replacement activity in the transmission and distribution infrastructure acts as a substantial market driver.”
*Distribution Transformers Market, Update 2016 – Market Size, Competitive Landscape, Key Country Analysis and Forecasts to 2020.