With the ever-changing dynamics observed across industries worldwide, transformer market stands as no exception with respect to aiming for being part of a technologically advanced industrial landscape. In order to keep up with the rising energy demand and stay abreast of developed technology, product upgradation has emerged to be a rather pivotal strategy for transformer industry players. As leading companies are increasingly contributing to research and development programs to bring forth an innovative product portfolio, transformer market has been witnessing new growth avenues of late.
Innovative transformers are designed to not only improve the overall performance of the product, but also to be energy efficient for conserving energy and effectively attempt to offset the effects of global warming caused by greenhouse gases emission. The growing infrastructural development in the emerging economies and the refurbishment and upgradation of already established grid systems in the developed nations will thus impel transformer market size over 2017-2024. Furthermore, it has been predicted that the evolving requirements of different end-use domains will open up a whole new dimension for transformer market, the trends of which have been changing rapidly with the massive shift in consumer demand.
Globally rising population and its effects on the transformer market
Given that transformers are an indispensable part of facilitating electrical energy for households and industrial units, it goes without saying that the geographical distribution of population influences transformer market outlook, considering the varying energy demand and supply. It is estimated that since 1850, the world’s energy consumption has increased 20 folds. In the late 1980s, population growth accounted for a third of the energy growth in the United States as well as across other regions of the world. With the increase in global population and the subsequent rise in per capita income, it is rather overt that energy demand will escalate, causing an upsurge in transformer market size.
Apart from population rise, economic development also contributes largely to the intensification of energy demand, further augmenting the revenue graph of transformer market. It has been estimated that even a 1% rise in gross domestic product causes the rise of energy demand by 0.6% on an average. In countries with exponentially expanding GDPs, a manifold increase in energy demand has been observed, as these countries are focusing on providing energy, especially electric energy to the overall populace while also wanting to expand their industrial and infrastructural base. On these grounds, it is prudent to mention that the growth in a country’s economy reflects directly on transformer industry trends.
Electrical energy preference to spur the transformer industry
In recent times, electrical energy has emerged to be the most preferred choice of energy. It has been estimated that 15% of the global energy consumption is in the form of electrical energy and 38% of the primary energy goes into creating this 15% electrical energy. Qualitatively, electrical energy is much more preferable than any other source of energy as it causes the least amount of emission and pollution. Of late, electrical energy has even come to replace other forms of energy – say for instance oil and gas based central heating units are now replaced with electric heat pumps. Electric vehicles are capturing an ever-increasing portion of the automotive industry, leaving behind fuel-based vehicles. Undeniably, the rise in electrical energy preference will have a profound impact on transformer market size.
Effects of urbanization on the transformer industry
Statistics claims that in 2014, there were around 24 cities across the world harboring a population of over 10 million. Given that the demand for electrical energy is the highest in cities, the rise in urbanization is certain to directly impact transformer industry share. With the relentless onslaught of modernization, urbanization is not being limited to established cities but is spreading to the tier II and tier III cities as well, where consumers are becoming increasingly dependent on gadgets and facilities that require operational electricity, thereby boosting transformer industry share. Pertaining to the shortage of land, transformer market players are being compelled to follow stringent norms with respect to transformer usage – especially when they are installed in households situated underground. It goes without saying that urbanization indeed will have a powerful impact on transformer market trends.
Demand for energy efficiency spurring the transformer market
Energy conservation has evolved as a major concern lately, as energy resources are becoming restricted and fossil fuel reserves have been rapidly depleting. Drastic changes in the global climate and alarming levels of greenhouse gases are also adding to this concern. Therefore, technological development in various industries is displaying an increased inclination toward designing products that are more energy efficient, a trend that has been observed in the transformer market as well.
Transformers remain functional for 20 to 30 years, on the grounds of which more and more private and public-sector end users are being encouraged to invest in high quality, premium-efficiency transformers. A high-quality product is priced high initially, however, it has been observed that it seems more economically viable to invest in a high-priced product instead of pouring in capital to purchase one that costs lesser, but has reduced energy efficiency. Manufacturing giants of the transformer industry, in this regard, have been focusing on developing innovative products with high energy efficiency that would contribute toward extensive revenue generation for transformer market. According to reliable estimates, transformer industry size is expected to be pegged at USD 70 billion by 2024.