Saudi Arabia Distribution Transformers Market Assessment, By Phase Type [Single Phase, Three Phase], By Insulation Type [Dry-Type Transformers, Liquid-Filled Transformers], By Mounting [Pole-Mounted Transformers, Pad-Mounted Transformers, Underground Vaul

Saudi Arabia distribution transformers market is projected to witness a CAGR of 5.15% during the forecast period 2025-2032, growing from USD 0.75 billion in 2024 to USD 1.12 billion in 2032.

Saudi Arabia distribution transformers market is experiencing significant growth, driven by a combination of factors such as the expansion and implementation of energy transition towards renewable sources, smart grid development, growing urbanization, and an increased focus on improving energy efficiency. Additionally, rapid urbanization and population growth in major cities are placing immense pressure on existing power infrastructure, necessitating utilities to upgrade and expand distribution networks, which drives demand for distribution transformers in the market.

Furthermore, the government's commitment to integrating renewable energy in grids further fuels the demand for distribution transformers in solar and wind projects to effectively manage the variable energy outputs. In addition, higher authorities are implementing policies that target carbon neutrality, renewable energy integration, and power grid modernization, which will continue to create opportunities for distribution transformer market growth in the coming years.

For instance, in October 2024, Saudi Arabia established a goal to source at least 50% of power generated from renewable energy by 2030. The country is looking to expand the capacity to 130 gigawatts (GW), of which 58.7 GW is expected to come from solar and 40 GW from wind. This development, highlighted by the rise in investment in power infrastructure, will drive the demand for distribution transformers in the years ahead.

Rapid Urbanization and Industrialization Accelerate Market Growth

The country is involved in adopting new developments to bring more urbanization and industrialization. The expansion of cities requires robust and expanded power grid infrastructure. Urbanization boosts the electricity demand, leading to higher demand for distribution transformers to ensure reliable power supply in urban areas. High investments are being made in building residential, commercial, and public infrastructure, which catalyzes the demand for advanced distribution transformers for power supply. In addition, for the development of cities and industrial hubs, proper transmission and distribution networks are required, contributing to the rise in demand for distribution transformers. Distribution transformers are essential components in urban areas to regulate voltage levels and ensure reliable and stable electricity flow, contributing to the future growth of the distribution transformers market.

Industrialization demands a continuous and reliable flow of electricity in sectors such as manufacturing, mining, and processing. The industrial sector seeks to upgrade its electrical infrastructure to support automation and more energy-intensive operations, which leads to a high demand for distribution transformers in these applications. Moreover, large-scale industrial operations require different voltage transformers to ensure an uninterrupted power supply across various processes, further boosting the demand for distribution transformers in the market in the coming years.

Saudi Arabia government’s National Investment Strategy (NIS) strategy focuses on increasing the GPD and investment through the oil and gas, metal and mining, transportation and logistics, ICT and digital, renewable energy, and renewable energy sectors by 2030. This development highlights that the country is investing in urbanization and industrialization, which will further drive the demand for distribution transformers in the coming years.

Government Investments in Energy Diversification and Smart Grid Initiatives Creates Market Opportunities

The government is investing in renewable power infrastructure, which directly impacts the expansion, modernization, and reliability of electricity grids, to achieve the desired diversification goals. Saudi Arabia is moving towards renewable energy sources such as solar, wind, hydro, and other source of energy for energy diversification. Distribution transformers are crucial in the transformation, transmission, and distribution of electricity output from renewable sources to end users. Transmitting the power generated from large solar farms over long distances requires distribution transformers. Saudi Arabia is looking to create a proper renewable energy mix, and the expansion of the power grid to reach underserved regions requires a considerable number of distribution transformers, thereby driving demand in the market.

Furthermore, the government is investing in creating smart grid network connections in Saudi Arabia. Smart grids are equipped with smart distribution transformers, which are essential to managing fluctuations in energy supply, optimizing distribution, and ensuring grid stability. The smart grid network allows utility providers to adjust the power quality and integrate renewable energy into the power grid. The increase in the deployment of smart grids will drive the distribution transformers' market share in the coming years.

According to the Minister of Energy, Saudi Arabia will automate 40% of the electricity distribution network by the end of 2025, having already achieved 32% of the target through the deployment of smart grids and other smart technologies. Smart technologies facilitate the integration of renewable energy into the grids. This development highlights the rising installation of smart grids, which will augment the demand for distribution transformers.

Single-Phase Distribution Transformers to Dominate the Market Share

Single-phase distribution transformers are experiencing a high adoption rate in the forecast period, which makes the segment dominate the market. Saudi Arabia is working to modernize and expand the existing power grid to meet rising energy demands. The power infrastructure is being updated with smart grids which require modern distribution transformers in the market. Moreover, the Saudi government is also committed to improving electricity access to the manufacturing sector as the country is looking to diversify its revenue streams by entering new industrial operations. The rise in several numbers of manufacturing industries is driving the demand for single-phase distribution transformers in the country. Moreover, the country is on the groundwork to integrate renewable energy sources into the existing power grid, which will boost the adoption of single-phase distribution transformers for different applications. Thus, to fulfill the above goals of the country, the demand for single-phase distribution transformers is on the rise, which makes the segment dominate the market.

Riyadh Region Leads the Saudi Arabia Transformers Market

The Riyadh region dominates the distribution transformers market and has the highest market share. Riyadh is undergoing a major expansion in terms of population, commercial, and industrial projects, leading to an increasing demand for reliable power supply, which boosts the penetration of distribution transformers in the market. Moreover, Riyadh is part of Saudi Arabia's smart city initiatives, which plans to integrate digital technologies and smart infrastructure into urban planning, which contribute to the demand for distribution transformers market. The upcoming projects require distribution transformers that can manage energy distribution and improve grid efficiency, thereby increasing the demand for advanced distribution transformer technologies in the region.

In August 2024, the city of Riyadh was involved in several massive development projects such as KAFD, Riyadh Metro, and New Riyadh City, which necessitated the installation of distribution transformers in the electrical infrastructure. This further led to increased demand for distribution transformers in the market.

Future Market Scenario (2025 – 2032F)

Saudi Arabia is focused on improving energy efficiency and reducing energy losses in transmission and distribution networks, which drive the demand for efficient distribution transformers in the market

Government concerns push for more integration of renewable energy in the energy mix which distribution transformers gaining significance.

The ongoing upgrades in the electrical infrastructure, which are crucial for improving reliability and efficiency in power transmission, foster the demand for distribution transformers.

The modernization effort is essential to meet the country's increasing electrification, which will boost the market's demand for distribution transformers.

Key Players Landscape and Outlook

Continuous innovation characterizes the domain of distribution transformers, as key players compete in terms of energy efficiency, product life, and unique features. The market outlook remains positive, owing to increased demand for the integration of renewable energy and rising investment in the upgradation of power infrastructure. Product launches, agreements, business expansions, collaborations, and developing technologies are projected to increase competition in the fast-paced market.

For instance, in March 2024, Siemens Saudi Arabia opened a new electrical equipment factory in Jeddah in partnership with Arabia Electric Equipment. The plant produces substation automation systems, communication, and protection panels, transformers as well as other products for the utility, oil and gas, infrastructure, and petrochemical industries. This development will help the company to increase revenue in the coming years.