According to a new report published by Allied Market Research, titled, “Renewable Energy Transformer Market," The renewable energy transformer market size was valued at $29.9 billion in 2022, and is estimated to reach $57.6 billion by 2032, growing at a CAGR of 7.1% from 2023 to 2032.
Renewable energy transformers, also known as green transformers, are electrical devices designed to facilitate efficient and reliable integration of electricity generated from renewable energy sources into the electrical grid. These transformers are essential to the energy transition to more sustainable and clean power generation.
Furthermore, these transformers are known for their high efficiency, minimize energy losses throughout the transformation process, and ensure that end consumers receive maximum amount of renewable energy available. These transformers are used in many different industries, including energy storage systems, smart grids, electric vehicle charging stations, hydropower and geothermal installations, solar and wind power plants, and residential and commercial renewable energy locations.
Renewable energy transformer demand is driven by increase in smart construction and infrastructure development. Renewable energy sources are frequently integrated into infrastructure projects, such as new buildings, industrial complexes, and transportation hubs, to achieve sustainability and energy efficiency goals. Rooftop solar panels and wind turbines incorporated into architectural plans are growing in demand. Specialized transformers are needed to connect these renewable energy sources to the grid and provide effective energy distribution. Transformers for renewable energy are becoming necessary as infrastructure construction continues to grow.
Some key players are adopting different strategies to sustain the competitiveness of the market. For instance, in April 2023, Eaton completed the acquisition of a 49% stake in Jiangsu Ryan Electrical Co. Ltd. (Ryan), a manufacturer of power distribution and sub-transmission transformers in China. Ryan’s products are widely used in renewable energy, data centers, utility, and industrial markets. The combination of Ryan’s high-quality products and Eaton’s global distribution will enable Eaton to serve customers better in Asia-Pacific and across the globe, leading to the renewable energy transformer market growth.
Many cities and metropolitan regions are striving to become "smart cities" to enhance productivity, sustainability, and standard of living. Installing renewable energy systems, such as solar-powered streetlights, electric vehicle charging stations, and distributed energy resources, is a common component of these programmes. Smart transformers are essential to manage these energy sources and maintain grid stability. Renewable energy transformers are in demand as cities adopt sustainable urban development.
In addition, grid modernization initiatives are frequently a part of infrastructure development projects to provide a dependable and robust electricity supply. This includes integrating innovative grid technologies and modernizing the electrical grid. Transformers for renewable energy are a crucial part of these system upgrade efforts. They facilitate bi-directional power flow, which is essential for distributed energy generation, and help the grid's integration of renewable energy sources.
Transformers with specific functions are necessary as infrastructure development moves towards grid modernization. The integration of renewable energy sources and grid modernization into construction projects is being driven by the need for sustainable and energy-efficient infrastructure, along with government incentives and regulatory assistance. Thus, there is rise in demand for transformers to facilitate the development of smart, energy-efficient infrastructure and effectively control the electricity produced by these renewable sources. Thus, the growth of the renewable energy transformer market is expected to expand significantly during the forecast period.
Land and space requirements for renewable energy transformers hinder the market growth. A large amount of land or area is needed for power production by several renewable energy sources, including wind and solar farms. To harness wind energy, wind turbines require open, unobstructed places, whereas solar farms require large areas covered with solar panels. This may result in competition for land and space due to many distinct groups competing for the same locations. Transformers and other related equipment may face difficulties as larger areas are set aside for renewable energy projects. This is expected to restrict the market growth for renewable energy transformers owing to potential space limitations for installing the required transformers.
Renewable energy installations are frequently situated in remote or rural areas, which are abundant in various renewable resources. These places may be remote from the hubs of population where power is used. Consequently, for effective long-distance transmission to urban and industrial areas, transformers are required to step up the voltage. However, it can be difficult to locate appropriate space for these transformers close to renewable energy installations. The deployment of renewable energy transformers may be restricted if more land or space is required close to the generation site. This may result in higher prices and more obstacles from regulations.
There are non-technical factors involved in land availability and space requirements. Installations of renewable energy are impacted by visual and environmental factors. Land allocated for renewable projects may be limited by concerns about the effects on biodiversity, ecosystems, and scenic landscape. The construction of electrical infrastructure, such as transformers, may occasionally give rise to environmental concerns. The market for renewable energy transformers is expected to experience slower growth rate due to location constraints.
Moreover, conflicts between renewable energy projects and other land uses may arise from competition for land and space. For instance, agricultural land can be used to grow food and build renewable energy systems. Conflicts like these have the potential to hinder the permission and licensing process for renewable energy projects, which also affects the transformers involved. Infrastructure for renewable energy may not be installed in a timely manner due to regulatory obstacles and opposition from nearby populations worried about changes in land use. Thus, land and space requirements restrain the growth of the renewable energy transformer market.
Technological advancements is supposed to create the renewable energy transformer market opportunities, resulting in the expansion of the market. The aim of technological developments in renewable energy transformers is focused to increase efficiency, dependability, and flexibility to meet the specific requirements of renewable energy sources like solar and wind. The incorporation of smart grid technologies into transformers is one of the major developments.
Digital or intelligent transformers, commonly referred to as smart transformers, have real-time communication capabilities with the grid and other equipment. They facilitate rapid responses from grid operators to variations in the supply and demand of electricity by enabling remote monitoring, control, and diagnostics. This capability increases grid stability and energy efficiency through the optimization of voltage regulation and load management.
Transformer efficiency has increased due to technological advancements. Higher efficiency levels have been attributed to several factors, including enhanced insulation, improved core materials, and decreased iron and copper losses. Reduced operating costs and a smaller environmental effect are the results of higher efficiency, indicating less energy is released as heat during the transformation process.
In addition, the management of heat produced during transformer operation has seen a major improvement in cooling systems. Transformers are ensured to operate at their optimum temperatures due to improved cooling techniques such forced air cooling and oil-immersed natural circulation. This increases the transformers' dependability in addition to extending their lifespan.
Furthermore, hybrid transformers provide increased flexibility and control over energy flow management by fusing power electronics with conventional transformer technology. They enable more seamless integration of fluctuating energy sources, which is especially helpful in applications involving renewable energy. Thus, the renewable energy transformer market will significantly expand during the forecast period.
The renewable energy transformer industry is segmented into type, insulation, capacity, application, and region. Depending on type, the market is classified into distribution transformers, power transformers, and others. On the basis of insulation, the market is segmented into dry and liquid immersed. By capacity, the market is divided into 5 MVA to 100 MVA, 100 MVA to 500 MVA, and 500 and above. Depending on application, the market is segregated into hydro energy, wind farm, solar PV, and others. Region-wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
On the basis of the type, the renewable energy transformer market is classified into distribution transformers, power transformers, and others. The distribution transformer is projected to be the fastest-growing segment and has garnered the highest share in the renewable energy transformers market.
On the basis of the insulation, the renewable energy transformer market is classified into dry and liquid immersed. Dry is projected to be the fastest-growing segment and has garnered the highest in the renewable energy transformer market share.
On the basis of the capacity, the renewable energy transformer market analysis is classified into 5 MVA to 100 MVA, 100 MVA to 500 MVA, and 500 and above. 5 MVA to 100 MVA is projected to be the fastest-growing segment and has garnered the highest share in the renewable energy transformers market.
On the basis of the application, the renewable energy transformer market is classified into hydro energy, wind farm, solar PV, and others. Solar PV is projected to be the fastest-growing segment and Hydro Energy has garnered the highest share in the renewable energy transformers market.
The major players operating in the global renewable energy transformer market are ABB, Acutran, Bharat Heavy Electricals Limited, CG Power and Industrial Solutions Ltd, DAIHEN Corporation, Eaton, Hammond Power Solutions, Hitachi, Ltd., Siemens, and STC, Incorporated. These players have adopted business expansion, acquisition, and product launch as their key strategies to increase their market shares.
Other players include Alstom SA, CAHORS, General Electric, POWERTRONIX INC., Prolec GE, Schneider Electric, SGB-SMIT POWER MATLA, Voltamp, WEG, and Wilson Transformers.
Key Findings Of The Study:
- On the basis of the type, the distribution segment is expected to grow at a CAGR of 7.4%, in terms of revenue, during the renewable energy transformer market forecast period.
- On the basis of the insulation, the dry segment is expected to grow at a high CAGR, in terms of revenue, during the forecast period.
- Depending on the capacity, the 5 MVA to 100 MVA segment is expected to grow at a dominant CAGR, in terms of revenue, during the forecast period.
- Depending on the application, the solar PV segment is expected to grow at a CAGR of 7.6%, in terms of revenue, during the forecast period.
- Region-wise, Asia-Pacific garnered the largest share in 2022 in terms of revenue.