Different drivers behind transformer growth in APAC and EMEA

The Asia-Pacific region will account for almost half of the global market for distribution transformers by 2022, according to a new report.

The study from analysts at research company GlobalData forecasts that the overall market will be worth $14.32bn in 2022, with a 48 per cent share held by APAC accounting for $6.94bn.

The driver behind APAC’s position as the market number one is the need for grid expansion and upgrades within the region.

Power analyst Nirushan Rajasekaram explained: “Systemic transformation of the global power sector is contributing to the requirement for power technologies, which support low carbon power generation. Markets in the US and Europe are primarily replacement markets, with initiatives undertaken to enhance the adaptability of the grid to changing market conditions. Other countries in APAC and Middle East are constructing new grid networks to support and sustain the growing power generation segment and demand requirement.”

He added that China and India, with their large populations and industrial bases, are driving the regional market.

“China and India have laid out plans for grid expansion to improve rural electrification, accommodate growing renewable asset portfolios, and support their economic growth. In addition, favourable economic conditions and market reforms among smaller markets such as Indonesia and Vietnam will result in strong growth, where new infrastructure is expected to be developed.”

However, the report notes that despite APAC being the largest market for distribution transformers, EMEA is forecast to experience the highest growth over the forecast period, with the market estimated to reach $3.7bn in 2022.

Rajasekaram said that the push for sustainability and clean power generation, increasing electricity and peak demand, and economic diversification are likely to increase the need for distribution transformers within the Middle East and Africa.

However, he notes that the established networks in Europe will require the replacements of transformers more suited to enhance the integration of smart technologies into the grid.

“Rapid changes in the power generation segment, rising electricity consumption and the existing lack of suitable facilities for power transfer would propel the installations of distribution transformers globally. Growing integration of distributed technologies at low voltage networks is leading to complex power flows within the network. Augmenting the distribution grid is needed to ensure reliable operations and thereby driving the transformers market.”   

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