United States Power Transformer Market - Growth, Trends, and Forecasts (2023-2028)

The United States power transformer market is expected to rise at a CAGR of more than 1% during the forecast period.

The market was negatively impacted by COVID-19. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the long term, factors such as the increasing deployment of three-phase transformers are expected to drive the market.
• On the other hand, the installation cost and logistics difficulty of power transformers in the country is expected to restrain the market's growth.
• Nevertheless, increasing advancements in the power transformers technology coupled with the use of Internet-of-things is expected to provide ample opportunity to the market players in the forecast period.

US Power Transformer Market Trends

Oil Insulated Segment to Dominate the Market

• Transformer oils are orders of magnitude better at cooling than ambient air. This allows oil-filled transformers to be smaller and lighter and produces lower noise levels than dry-type transformers of equivalent power ratings. Oil-insulated transformers can be used where space is a significant constraint in the station's planning. These advantages have made oil-filled power transformers the primary technology for today's globally installed transformer market.
• Power transformers are generally used in the transmission network for stepping up or down the voltage level. It operates mainly during high or peak loads and maximizes efficiency at or near full load. Increasing renewables have developed the issue of high unreliability in the utility grid, which may directly hamper the working of the power transformer. However, new transformers with a better ability to handle fluctuations are under research and development, which is expected to aid the market's growth.
• Increasing adoption of the smart grid is expected to reduce the power losses in transmission and distribution and increase transformer longevity. Power transformer usually works at high voltage, so the damage to the system in case of fluctuation may be much more significant. Oil-insulated transformers have increased in usage, and some companies are expected to put forward the next-generation digital power transformers, which are expected to aid the market's growth.
• Electricity generation in the United States increased by 2.4% to 4,108,303 Million Kilowatthours in 2021 from 4,009,767 Million Kilowatthours in 2020. Energy generation is expected to increase in the forecast period and may aid the market's growth.
• In July 2022, Enel Grids announced plans to create a new low-carbon transformer. The transformer was created with the power distribution network manager and Hitachi Energy. The first Eco-design high voltage/medium voltage (HV/MV) low loss transformer is made of natural ester, an utterly biodegradable vegetable oil, and emits less CO2.
• Hence, the Oil-insulated segment is expected to dominate the market in the forecast period due to the increase in energy consumption and advancements in equipment.

Increasing Deployment of Three Phase Transformer to Drive the Demand

• The advantages provided by three-phase transformers are the requirement of less copper in the transformer, and hence, small space requirement compared to the output provided, fewer safety risks involved, lower labor cost for installation and maintenance of the transformers, better conductor efficiency that ensures lesser losses, and its ability to provide higher power load. Three-phase distribution transformers are generally used for applications with a power requirement of more than 1,000 kW. They find applications in the industrial sector and the commercial industry, with substantial load requirements, such as data centers, and in apartments, where the cumulative load requirement of residents is high. ​
• With growing population density in urban areas, around the world, and the resultant space constraints, the housing sector is moving from independent houses to apartments. The growing share of apartment buildings in the housing industry, in urban areas, is expected to support the demand for three-phase distribution transformers during the forecast period. Additionally, the modernization of transmission and distribution networks is expected to drive the market.
• Air-insulated power transformers have gained appreciable market penetration subject to their safe & reliable operations and flexible product applications. The ability to avoid combustibility, environment-friendly operations, and limit the secondary effects of internal failure has enhanced product adoption. It allows complete integration of substation equipment with resultant space and cost savings, thereby fueling product penetration. This is expected to improve reliability and aid in the growth of the market.
• In October 2022, Hitachi Energy announced plans to invest more than USD 37 million in the expansion and modernization of its power transformer manufacturing facility in South Boston, Virginia, to meet rapidly increasing demand from utility customers and for applications such as renewable energy generation and data centers. Investments in technological advancement are expected to aid the growth of the market.
• Primary energy consumption in the United States increased by 5.3% to 92.97 exajoules, in 2021 from 88.54 exajoules, in 2020. Energy consumption is expected to increase further in the forecast period and may drive the United States Power Transformer Market.
• Hence, three-phase segments are expected to dominate the United States power transformer market due to the increase in investments in systems related to the smart grid and increasing urbanization.

US Power Transformer Market Competitor Analysis

The United States power transformer market is partially fragmented. Some key players in this market (not in a particular order) include Hitachi Ltd., Kirloskar Electric Co. Ltd., Schneider Electric SA, Siemens AG, and Eaton Corporation PLC, among others.

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