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Distribution Transformer Market - By Core (Closed, Shell, Berry), By Winding (Two Winding, Auto Transformer), By Cooling (Dry Type, Oil Immersed), By Insulation (Gas, Oil, Solid, Air), Installation, Phase, Rating, Mounting, Application, 2023 – 2032

  • Report ID: GMI2121
  • Published Date: Jul 2023
  • Report Format: PDF

Distribution Transformer Industry Analysis

Distribution Transformer Market size was valued at USD 27 billion in 2022 and is estimated to grow at over 8.3% CAGR between 2023 and 2032. The burgeoning requirement of electricity along with favourable policies for the expansion of the existing grid infrastructure will drive business growth. The global transformer market is likely to exceed USD 109 billion by 2032.

Distribution Transformer Market

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Providing affordable and uninterrupted power has become a key priority for regulators, leading to the implementation of various reforms and policies. With concerns over coal availability, attention has now shifted to the transmission and distribution sector. Additionally, there is a growing emphasis on improving energy efficiency and reducing electrical losses, which has spurred the need for capacity expansion and technological advancements. Manufacturers worldwide are investing in extensive research and development efforts and adopting strategic measures to enhance their market presence.

COVID-19 Impact

The COVID-19 pandemic has had varying impacts on the distribution transformer market. The pandemic led to lockdowns, restrictions, and disruptions in global supply chains, affecting the production and delivery of distribution transformers. Manufacturing facilities faced temporary closures, shortage of raw materials, and logistical challenges, leading to delays in production and delivery schedules. The economic slowdown caused by the pandemic resulted in reduced construction activities, industrial operations, and overall electricity consumption. This decline in demand for electricity directly impacted the demand for distribution transformers. Moreover, many infrastructure projects, including the expansion of grid infrastructure and installation of distribution transformers, were delayed or put on hold due to the uncertainty caused by the pandemic.

The pandemic highlighted the importance of reliable and resilient power supply, leading to an increased focus on renewable energy sources. This shift in the energy mix may impact the distribution transformer market development, as the infrastructure requirements for renewable energy integration can differ from traditional power systems. In addition, governments and utilities recognized the need for robust and resilient electricity infrastructure during the pandemic. Stimulus packages and investment plans were introduced to boost the economy, including investments in the modernization and expansion of grid infrastructure, which could fuel the demand for distribution transformers in the long term.

Distribution Transformer Market trends

The rising global population, urbanization, and industrialization will impact the demand for electricity. This demand is primarily fueled by sectors such as residential, commercial, and industrial, leading to the expansion of distribution transformer installations. Governments and utilities worldwide are investing in the expansion and modernization of their grid infrastructure. This includes upgrading aging distribution systems, integrating renewable energy sources, and improving overall power reliability and quality. These infrastructure development initiatives require the deployment of distribution transformers, thereby complementing distribution transformer market growth.

The transition towards a clean energy future is stimulate the integration of renewable energy sources such as solar and wind into the power grid. Distribution transformers play a crucial role in connecting these distributed energy resources to the grid, facilitating their efficient and reliable transmission. Ongoing research and development efforts are leading to technological advancements in distribution transformers. For example, the emergence of smart transformers, which integrate digital monitoring and communication capabilities, enables real-time data analysis, remote monitoring, and predictive maintenance. These advancements enhance the efficiency, reliability, and performance of distribution transformers, attracting distribution transformer market demand.

Distribution Transformer Core Segmentation

 Distribution Transformer Market Size, by Core,

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The distribution transformer technology comprises of various cores including closed, berry and shell. The shell core distribution transformers accounted for 10.5 billion in 2022 and is projected to surpass USD 23 billion by 2032. In recent years, shell core distribution transformers have made significant inroads into the market due to their improved efficiencies and cost advantages compared to conventional closed core units. The adoption of shell core transformers has been fueled by their high product flexibility and the integration of smart monitoring units, driving distribution transformer market share.

Shell core transformers are defined as units where the windings are surrounded by the core. These transformers offer inherent benefits such as enhanced short-circuit strength, improved kVA-to-weight ratio, and greater resistance to transit damage. These advantages contribute to the growing preference for shell core transformers over alternative options in the market.

Distribution Transformer Winding Segmentation

Distribution Transformer Market Revenue Share, By Winding,

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The distribution transformer market is segmented in two-winding and auto-transformer based on winding. Two-winding distribution transformers segment was worth around USD 15 billion in 2022 and is set to grow at a CAGR of over 7.5% through 2032. Traditional electrical networks have witnessed substantial penetration of two-winding distribution transformer units. Furthermore, the increasing technological maturity and rapid functional enhancements in the market may further impede their adoption. Despite these challenges, two-winding distribution transformers continue to maintain a significant market presence, particularly in developing economies. This sustained market hold in emerging markets is expected to support the continued use and demand for these units.

Distribution Transformer Installation Segmentation

The distribution transformer market is segmented in outdoor and indoor based on installation. Outdoor installation captured about 54% of the market share in 2022 and is forecasted to attain 7.5% CAGR up to 2032. The rapid expansion of high-tension electrical networks is a direct response to the escalating energy demand in isolated load centers. These load centers, often located in remote or underserved areas, require the establishment of robust and efficient power transmission and distribution infrastructure. As a result, the demand for outdoor transformers is stimulated, as they play a critical role in stepping down voltage levels and ensuring reliable power supply to these areas.

Furthermore, the ongoing expansion of cross-border networks is facilitating the integration and sharing of electricity resources across regions. This integration requires the installation of outdoor transformers at key transmission points to enable the smooth transfer of power between different countries or regions. The increasing interconnectivity and cross-border energy trading are driving the distribution transformer market revenue.

The revamping and restructuring of the existing grid infrastructure in suburban areas are essential for improving the efficiency and reliability of power distribution. As part of these efforts, outdoor transformers are being deployed to upgrade and modernize the distribution networks, ensuring efficient power delivery to residential, commercial, and industrial consumers. The demand for outdoor transformers is expected to rise as more suburban areas undergo grid infrastructure revamps.

Distribution Transformer Cooling Segmentation

The distribution transformer market segmented in dry type and oil immersed based on cooling technologies. The oil immersed distribution transformers capture major market share owing to its superior cooling features and high compatibility with high tension applications. Transformer oil has excellent dielectric properties, providing effective insulation between the transformer windings and the core. This insulation capability ensures reliable and safe operation of the transformer, even under high electrical stress conditions.

However, Oil-immersed transformers have inherently better short-circuit strength characteristics. The oil acts as a coolant and provides additional mechanical support, improving the transformer's ability to withstand short-circuit currents without damage. Similarly, properly maintained oil-immersed transformers have a longer lifespan compared to other alternatives. The oil helps to prevent the degradation of insulation materials, extending the operational life of the transformer. The market for oil filled distribution transformer is set to hit USD 41.3 billion by 2032.

Distribution Transformer Insulation Segmentation

The distribution transformer market segmented in oil, gas, solid, air and others based on insulation. The oil insulted distribution transformers segment valuation crossed USD 16 billion in 2022 and is likely to rise over USD 35.5 billion by 2032. The oil insulation in distribution transformers provides effective protection against moisture and contaminants. It helps maintain the integrity of insulation materials, preventing degradation and prolonging the lifespan of the transformer. Oil-insulated transformers have inherent properties that enable them to withstand short-circuit currents without damage. The oil provides additional mechanical support and acts as a coolant, dissipating the heat generated during short-circuit events and maintaining the structural integrity of the transformer.

Additionally, Oil-insulated transformers are suitable for a wide range of distribution applications, including medium and high voltage networks. They are commonly used in substations, industrial facilities, and commercial buildings, offering versatility in voltage ratings, power capacities, and environmental conditions, which drives its adoption over other alternatives.

Distribution Transformer Mounting Segmentation

The distribution transformer market is segmented in mounted on pad mounting or pole mounting based application requirements. The pad mounted distribution transformers exceeded USD 9 billion in 2022 and is slated to register gains at nearly 7.5% through 2032. Pad-mounted distribution transformer units have experienced significant market penetration due to their requirement for effective base foundation and earthing arrangements, particularly for large-unit installations. These transformers are ground-mounted units housed within a secure steel cabinet and placed on a concrete pad. They are commonly used in medium voltage distribution systems to supply electricity to residences and small businesses.

The adoption of pad-mounted transformers is propelled by various factors, including reduced land requirements, improved safety features, enhanced aesthetics, and suitable installation costs. These units have found widespread applicability in industries and utility establishments, especially for short-distance power distribution requirements. The pole mounted transformer demand is poised to witness 6.8% growth during 2023 - 2032.

Distribution Transformer Application Segmentation

The distribution transformers are utilized across various applications including utility, industrial, residential & commercial establishments. The utility sector of distribution transformer market held approximately 51% of the market share in 2022 owing to growing electricity demand and ongoing efforts to refurbish the transmission & distribution infrastructure across the globe. The utilities sector is poised for strong industry growth as it responds to rapid developments in grid networks. These developments are led by the need to meet the ever-increasing energy demand worldwide. As a result, utility companies are actively engaged in retrofitting existing networks to enhance their capacity, efficiency, and reliability.

Furthermore, the expansion of cross-border electrical networks is contributing to the growth of the utilities industry. Interconnecting power grids across borders allows for the efficient sharing and trading of electricity between countries or regions. This expansion not only strengthens energy security but also promotes regional cooperation and integration.

Distribution Transformer Regional Analysis

North America Distribution Transformer Market Size

North America distribution transformer market is anticipated to reach USD 25 billion in 2032, owing to the rising need for effective T&D systems. Governments and utilities in North America are actively investing in the modernization of their grid infrastructure. This includes upgrading aging distribution systems, implementing smart grid technologies, and integrating renewable energy sources. These initiatives necessitate the deployment of advanced distribution transformers to enhance grid efficiency, reliability, and flexibility. North America is witnessing a significant growth in renewable energy generation, particularly from sources like wind and solar power.

The increasing adoption of clean energy technologies is accelerating the demand for distribution transformers capable of handling variable and intermittent power generation. Many distribution transformers in North America are reaching the end of their operational lifespan. This has prompted utilities to replace and upgrade their aging infrastructure, including transformers. The need for more efficient and reliable distribution transformers to replace older units is growing significantly. Government regulations and energy efficiency standards are promoting the adoption of energy-efficient distribution transformers. The demand for energy-efficient transformers compliant with regulations, such as the U.S. Department of Energy's efficiency standards, is driving market growth. The market size of distribution transformer in Middle East is expected to cross USD 3.1 billion by 2032.

Distribution Transformer Industry Leaders

Notable companies operating in the distribution transformer market include Eaton Corporation, Schneider Electric, Hitachi Energy Ltd., General Electric, HYOSUNG HEAVY INDUSTRIES, ORMAZABAL, Mitsubishi Electric Corporation, Toshiba Energy Systems & Solutions Corporation, Siemens, Voltamp, CG Power & Industrial Solutions Ltd., IMEFY GROUP, ABB, Hitachi Energy Ltd., Elsewedy Electric, Celme S.r.l., and ERMCO.

Distribution Transformer Industry News:

  • In May 2021, Elsewedy Electric acquired 95% stakes in CG Power Systems Indonesia, a manufacturer of electrical transformers. This acquisition is the company’s first main investment across Southeast Asia, expanding its market presence across the region. This acquisition enabled the company to increase its customer base and strengthen its market position in the transformer industry.
  • In March 2021, Siemens Energy announced that it will install 22 units of distribution transformers for Phase 1 of the Yuhuan offshore wind power project Taizhou, Southeast China. With a capacity of 300 megawatts, the wind farm will deliver green energy to about 240,000 households annually. This project enabled the company to efficiently optimize power supply across the Yangtze River delta. Furthermore, it also helped the company to strengthen its market presence across the region and expand its project portfolio in the transformer industry.

This distribution transformer market research report includes an in-depth coverage of the industry with estimates & forecast in terms of Units & USD Million from 2019 to 2032, for the following segments:

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By Core

  • Closed
  • Shell
  • Berry

By Winding

  • Two - Winding
  • Auto - Transformer

By Installation

  • Outdoor
  • Indoor

By Cooling

  • Dry Type
  • Oil Immersed

By Insulation

  • Gas
  • Oil
  • Solid
  • Air
  • Others

By Phase

  • Single Phase
  • Three Phase

By Rating

  • ≤ 2.5 MVA
  • 2.6 MVA to 10 MVA
  • > 10 MVA

By Mounting

  • Pad
  • Pole
  • Others

By Application

  • Residential & Commercial
  • Utility
  • Industrial

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • Russia
    • UK
    • Italy
  • Asia Pacific
    • China
    • Japan
    • South Korea
    • India
    • Australia
  • Middle East & Africa
    • Saudi Arabia
    • UAE
    • Egypt
    • South Africa
  • Latin America
    • Brazil
    • Argentina


Authors: Ankit Gupta, Vishal Saini

Frequently Asked Questions (FAQ) :

The market size of distribution transformer reached USD 27 billion in 2022 and is estimated to exceed USD 62 billion by 2032 driven by the burgeoning requirement of electricity along with favorable policies for the expansion of the existing grid infrastructure.

The distribution transformer market size from the outdoor installation segment is anticipated to witness over 7.5% CAGR from 2023 to 2032 due to rapid adoption in substations, industrial facilities, and commercial buildings for offering versatility in voltage ratings and power capacities.

The utility application segment held approximately 51% of the distribution transformer industry share in 2022 due to the growing electricity demand and ongoing efforts to refurbish the transmission & distribution infrastructure across the globe.

North America distribution transformer market size is poised to surpass USD 25 billion by 2032 owing to the rising need for effective T&D systems.

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  • Base Year: 2022
  • Companies covered: 17
  • Tables & Figures: 1684
  • Countries covered: 19
  • Pages: 1170
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