North America Smart Transformers Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The North American smart transformers market is expected to register a CAGR of more than 2.5% during the forecast period of 2022 - 2027. The COVID-19 pandemic had a negative impact on the North American smart transformers market since the United States has reported a fall in its consumption of electricity amid the COVID-19 pandemic. For instance, in 2020, consumption declined by 5.7% compared to 2019. This downfall lowered the demand for smart transformers from power distributors across the region. Factors such as the increasing focus of governments across the developed and emerging economies on adopting smart technology in power grid infrastructure and efforts to overcome rising challenges, such as aging transmission and distribution (T&D) infrastructure, electric vehicle charging, and distributed generation, are expected to benefit the growth of smart transformers across the world. However, the installation cost and logistics difficulty of smart transformers are expected to act as restraints for the market to grow in the future.

Key Highlights

• Distribution transformers, which are used for stepping down the voltage, are expected to be the major segment in the smart transformers market.
• A number of governments across the region are increasingly viewing smart grid technology as a strategic infrastructural investment that will sustain their long-term economic prosperity and help them achieve their carbon emission reduction targets. This, in turn, is expected to provide an ample amount of opportunity to the companies involved in the smart transformers market in the near future.
• The United States is expected to dominate the market, primarily driven by the transmission and distribution developments and industrial growth in the country.

Key Market Trends

Distribution Transformers to Have Significant Growth

• The growing emphasis on electricity generation across the region, coupled with increasing electrical infrastructure projects, is expected to drive the demand for smart distribution transformers.
• In the electric distribution grid, smart transformers work independently to monitor and regulate the voltage while maintaining contact with the smart grid. This enables the information about the transformer and the power supply to be provided even by remote administration. Hence, this enables proper load management, resulting in better power quality and lesser power outages.
• Electricity generation in the North American region has seen significant growth in recent years due to rapid urbanization and the growing industrial sector. This has led to an increased usage of smart distribution transformers.
• In 2020, the total renewable energy electricity generation in the region accounted for around 22%. According to the Energy Information Administration (EIA), the country is expected to increase its renewable energy mix from 22% in 2020 to 38% in 2050, which may drive the growth of smart distribution transformers across the region.
• Developed countries such as the United States, Canada, Mexico, and Cuba contribute to the significant demand for smart distribution transformers, owing to the increasing replacement of aging power distribution equipment and the increase in the integration of renewables into the grid.
• Moreover, in October 2021, GE Research and Prolec GE introduced the world’s first large and flexible smart transformer to enhance the resiliency of the US grid. The smart transformer is rated at 165kV, 60/80/100 MVA, and it was developed as part of an ongoing project funded through the US Department of Energy’s (DOE) Office of Electricity.
• Therefore, the smart distribution transformer segment is expected to have significant growth in the market during the forecast period.

The United States to Dominate the Market

• The United States, due to the constant increase in energy demand, requires a large number of power and smart transformers to transfer electricity from the generation site to the consumers.
• The increasing investment in the United States, especially related to the smart grid application and renewable energy sector, is expected to provide the required funding for the innovations and transition from old transformers to better and smart transformers.
• The country has several projects of offshore wind energy 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 offshore substations with smart power transformers to step-up the voltage.
• As of 2020, the United States has 19200 MW of solar energy installed capacity. California and Texas have massive installations of solar in their counties. These solar farms, which are either built or proposed, are expected to connect to the state grid via transmission lines. Some of the solar farms in the states have also installed their substations, having smart transformers on-site to plug into the state grid directly.
• Moreover, in October 2021, Siemens Energy announced the successful delivery and installation of three single-phase GSU smart transformers that were deployed to provide a solution in response to a failed conventional transformer at a combined cycle power plant in Florida.
• Owing to the above points, the United States is expected to dominate the smart transformers market during the forecast period.

Competitive Landscape

The North American smart transformers market is moderately fragmented. Some of the key players in this market are Hitachi Energy Ltd, Siemens Energy AG, Schneider Electric SE, Eaton Corporation PLC, and General Electric Company, among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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