Distribution Transformer Market Size, Share, and Trends 2024 to 2033

Distribution Transformer Market Size and Growth 2024 to 2033

The global distribution transformer market size was valued at USD 25.30 billion in 2023 and is anticipated to reach around USD 48.07 billion by 2033, growing at a CAGR of 6.63% from 2024 to 2033.

Distribution Transformer Market Key Takeaways

• Asia Pacific held the dominant share of the market in 2023.
• North America is observed to expand at a rapid pace during the forecast period.
• By phase, the three-phase segment accounted for the dominating share in 2023.
• By phase, the single-phase segment is expected to witness a significant share during the forecast period.
• By mounting, the pad-mounted segment accounted for the dominating position in 2023.
• By mounting, the pole-mounted segment is expected to witness a significant rate of growth during the forecast period.
• By power rating, the 2,501 kVA–10,000 kVA segment held the largest segment of the market in 2023.
• By power rating, the below 500 kVA segment is expected to grow significantly during the forecast period.
• By end-use industry, the industrial segment accounted for the largest share in 2023.

Distribution Transformer Market Overview

In the modern era, the world runs on electricity. Distribution transformers play a critical role in delivering electricity. Distribution transformers help in bringing light to the people. From big industrial complexes to small household appliances, all rely on a seamless power supply for heating, lighting, communication, transportation, computing, and several other applications. A distribution transformer is also known as a “typical isolation transformer”. This transformer converts the high voltage into low voltage for use in power distribution. A distribution transformer generally reduces high-voltage electricity from power stations down to normal or lower levels for distribution to commercial, residential, and industrial customers. Distribution transformers are available in different standard sizes and power ratings to match different distribution voltage levels and load demands.

Distribution Transformer Market Trends

• In January 2023, CG Power and Industrial Solutions Limited, an India-based Murugappa Group company announced its investment worth $15 million to expand the manufacturing capacity of its power transformers and distribution transformer units. The company has decided to invest 15 million to expand the power transformers and distribution transformer units at Malanpur and Bhopal.
• In May 2022, Hitachi Energy announced its plans to invest over $10 million in the expansion and modernization of its distribution transformer facility in Jefferson City, Missouri, US to provide additional capacity and enhance its manufacturing capabilities.
• In February 2024, the Ministry of Energy in Romania signed 21 distribution modernization contracts worth $693 million from the Modernisation Fund for the expansion and modernization of the electricity distribution network.
• In April 2023, the Asian Development Bank (ADB) announced its plans to invest in non-convertible debentures valued at Rs 150 crore in Tata Power Delhi Distribution Ltd (TPDDL). The investment aims to improve Delhi’s power distribution through grid enhancements.

Distribution Transformer Market Growth Factors

• The rising population coupled with rapid urbanization and industrialization are the major factors promoting the distribution transformer market’s growth in the upcoming years.
• The rising investments and growing government initiatives for building electricity infrastructure are expected to boost the demand for distribution transformers.
• The rise in renewable energy projects to meet the rising electricity demand. It requires transmission and distribution infrastructure to accommodate these projects, which is projected to accelerate the growth of the distribution transformer market.
• The rising application of distribution transformers in power systems such as providing suitable voltages to supply electric railway systems, a seamless supply of power to agricultural areas located away from the main grid and catering to the temporary loads on construction sites.
• The rising adoption of smart grids for power distribution systems is expected to contribute towards the growth of the market during the forecast period.
• The rising innovations in distribution transformers are expected to fuel market growth.

Distribution Transformer Market Scope

Distribution Transformer Market Dynamics

Driver: Increasing consumption of electricity

The rising consumption of electricity electrification globally is expected to boost the growth of the distribution transformer market in the upcoming years. The rising electrification of remote or rural areas coupled with the expansion of power distribution networks is anticipated to boost the demand for distribution transformers. The spur in the urban population increases the demand for electricity consumption. Governments around the world are actively investing in several electrification projects to enhance access to electricity with an aim to improve the living standards of people. Several schemes increasing electrification in India such as Ujwal DISCOM Assurance Yojana (UDAY), Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), and Integrated Power Development Scheme (IPDS).

Restraint: Fluctuation in raw material prices

The volatility in raw material prices is anticipated to hamper the growth of the distribution transformer market. Distribution transformers use raw materials such as copper, steel, and insulating fluids. The volatility in the prices of these raw materials can adversely impact the overall cost of the transformer as well as the profitability of manufacturers as they find it difficult to pass on the increased costs to potential customers due to severe competitive pressures or contractual obligations. Such factors may restrict the expansion of the global distribution transformer market during the forecast period.

Opportunity: Increasing adoption of smart distribution transformers

The rising adoption of smart distribution transformers is projected to offer lucrative opportunities to the distribution transformer market during the forecast period. The rapid advancements in technology marked a remarkable evolution by offering smarter and more efficient energy distribution systems. The market has witnessed the rapid adoption of smart distribution transformers as they come with communication devices, sensors, and excellent monitoring systems that assist in real-time data collection and analysis and facilitate extremely useful insights into the functioning of the transformer and the overall power grid.

Its capability to collect data on parameters including voltage, load, and temperature aids in reducing downtime and predictive maintenance as well as helps in extending the lifespan of the transformer. Therefore, the use of smart distribution transformers provides remote monitoring, energy efficiency, fault detection, and load management facilities which is anticipated to boost the market’s revenue during the forecast period.

Phase Insights

The three-phase segment accounted for the dominating share in distribution transformer market in 2023. The three-phase transformer is widely used in industries, large residential complexes, and others for higher capacities. The most common ratings for three-phase distribution transformers include 40kVA, 25kVA, 100kVA, 160kVA, 500kVA, 63kVA, 200kVA, and others. This three-phase transformer transmits the current to a secondary distribution circuit and reduces the voltage of the primary distribution circuit. Thereby driving the market’s growth.

The single-phase segment is expected to witness a significant share during the forecast period. Single-phase is well suited for lower-capacity applications such as commercial spaces, residential complexes, and others. The most common ratings for single-phase are 10 kVA, 25 kVA, and 63kVA.

• In December 2023, Prolec GE, a Prolec subsidiary of a joint venture between GE and Xignux, a Mexico-based private company announced additional manufacturing investments of USD 85 million to meet unprecedented North American demand for single-phase pad-mount transformers.

Mounting Insights

The pad-mounted segment accounted for the dominating share in distribution transformer market in 2023. The segment is observed to grow at a notable rate during the forecast period. Pad-mounted transformers are mounted on a concrete pad, and they are most commonly found in outdoor areas such as industrial areas, suburban areas, and commercial areas. This transformer is an indispensable component of an electrical power distribution system and offers numerous benefits and applications. It has a dead front design and a weatherproof enclosure making it a safe and efficient power distribution choice.

The pole-mounted segment is expected to grow at a considerable rate in the global distribution transformer market over the forecast period. These transformers are widely used in rural areas ranging from 16 kVA to 100kVA and are available in small sizes which makes them easy to fit on single-pole structures. These transformers are resistant to harsh weather when they are used in remote locations. These transformers are generally mounted on an electrical service pole at the height of the overhead cables. Thereby driving the segment’s growth.

• In April 2022, Siemens Energy launched the pole-mounted transformer CAREPOLE, an innovative dry-type single-phase transformer for pole applications. Designed for the technological requirements of the American grid, the new cast-resin distribution transformer provides a reliable and sustainable alternative to oil-filled transformers.

Power Rating Insights

The 2,501 kVA–10,000 kVA segment held the largest share of the distribution transformer market in 2023, the segment is expected to sustain the position throughout the forecast period. Distribution transformers with a 2,501 kVA to 10,000 kVA range are highly demanded in large residential buildings, infrastructure facilities, and commercial establishments. On the other hand, the Below 500 kVA segment is expected to grow significantly during the forecast period owing to the rising small power rating substation projects. Below 500 kVA are ideal for rural areas and households. As more rural households gain electricity, an increasing need for smaller distribution transformers for reliable and constant distribution of power in these areas.

End-use Industry Insights

The industrial segment accounted for the largest share in 2023 and is anticipated to grow at a robust CAGR over the forecast period. The growth of the segment is majorly driven by rapid industrialization. Distribution transformers are extensively used for the transmission and supply of electrical power to industries for performing several industrial applications. Distribution transformers facilitate ideal voltage levels to power motor-driven machinery, enabling them to operate efficiently and smoothly.

Regional Insights

Asia Pacific held the dominant share of the distribution transformer market in 2023. The region is observed to witness prolific growth during the forecast period. The growth of the region is attributed to the presence of key market players, the rapid progress of industrialization & urbanization, increasing electrification, supportive government initiatives, and increasing focus on renewable energy integration which results in creating significant growth opportunities for the distribution transformer market in the region.

In the Asia Pacific region, China and India are anticipated to contribute rapidly towards the growth of the market owing to rising populations and rapid growth of the commercial & industrial sectors which require a reliable supply of electricity. These countries have also witnessed growing investment in expanding the power structure to meet the ongoing electricity demand from both urban and rural areas in countries. The robust network of distribution transformers facilitates seamless power supply to industries, commercial centers, residents in urban areas, and remote villages and is expected to boost the growth of the distribution transformer market during the forecast period.

• Power Grid Corporation of India Limited (POWERGRID) holds a pivotal role in the bulk transmission of power across India. As of March31, 2024, the company's transmission network spans approximately 1,77,699 ckm of Extra High Voltage (EHV) transmission lines and comprises 278 EHV AC & HVDC Sub-stations, boasting a transformation capacity of 5,27,446 MVA.

In recent decades, the government of India has come up with numerous electrification initiatives that have resulted in increasing demand for distribution transformers in the region. As per the report published by India Brand Equity Foundation, India is the third-largest producer and consumer of electricity globally, with an installed power capacity of 416.59 GW as of April 30, 2023.

The Indian Government's initiative to provide electricity to each village and every household through various schemes of electrification including DDUGJY, RAPDRP, IPDS, and Saubhagya has significantly increased the demand for distribution transformers all over India.

North America is observed to expand at a rapid pace during the forecast period. The growth of the region is attributed to the increasing investment in the development of infrastructure, favorable government policy, rapid industrialization, and robust growth of the economy. In addition, rising energy consumption across the region is expected to drive the growth of the distribution transformer market during the forecast period. For instance, in 2022, the United States electricity demand rose by 2.6 percent due to robust economic activity and higher residential use to meet both cooling and heating needs amid hotter summer weather and colder winter weather. As per the US Energy Information Agency (eia.gov), in 2022, about 4.24 trillion kWh of electricity was generated at utility-scale electricity generation facilities in the US.

Distribution Transformer Market Recent Developments

• In February 2023, Servokon, leader in the manufacturing and supply of power conditioning equipment and power transformers unveiled a 16,000 KVA power transformer at Elecrama 2023.
• In November 2023, Hitachi Energy announced the launch of liquid-filled transformers with Transient Voltage Protection (TVP) technology.

Distribution Transformer Market Companies

• Padmavahini Transformers Private Limited
• HD HYUNDAI ELECTRIC CO., LTD.
• Siemens
• TOSHIBA CORPORATION
• ABB
• Fuji Electric Co., Ltd.
• Crompton Greaves Ltd.
• Eaton Corporation PLc.
• General Electric
• Ormazabal
• Transformers and Rectifiers India Limited
• SGB-Smit Group
• Wilson Power Solutions
• Lemi Trafo JSc
• Hyosung Corporation
• Schneider Electric
• Vantran Industries
• Wenzhou Rockwell Transformer
• Brush Electrical Machines Ltd.
• Emerson Electric Co.
• Eremu SA
• Hammond Power Solutions
• Hitachi Ltd.
• Kirloskar Electric Company Limited.

Segments Covered in the Report

By Phase

• Single-phase
• Three-phase

By End-Use Industry

• Residential
• Commercial
• Industrial
• Power Utility

By Mounting

• Pad
• Pole
• Underground Vault

By Power Rating

• Below 500 kVA
• 501 kVA–2,500 kVA
• 2,501 kVA–10,000 kVA
• Above 10,000 kVA

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa