Middle East and Africa Transformer Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Middle East and Africa Transformer Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Middle-East and Africa Transformer market is estimated to be at USD 1.82 billion by the end of this year and is projected to reach USD 2.37 billion in the next five years, registering a CAGR of over 5.50% during the forecast period.

Key Highlights

• Over the long term, factors such as growing power demand in line with the increasing population and a global inclination towards renewable-based power generation and related adjustments in the transmission infrastructure are expected to drive the transformers market in Middle-East and African region during the forecast period.
• On the flip side, challenges like high initial cost and lack of investor confidence due to the fragility of the sociopolitical equilibrium of the region are expected to restrain the inflow of investments in the T&D sector, which is expected to negatively impact the demand for transformers (especially power transformers) in the region during the forecast period.
• Technological innovations like smart transformers for smart grids create opportunities for the transformers market. Smart transformers operate independently to regulate voltage, monitor and manage the power demand fluctuations, and provide feedback in a power supply system. The utility can also have remote access to smart transformers.
• Nigeria is expected to witness significant growth in the Middle East and Africa transformers market during the forecast period.

Middle East And Africa Transformer Market Trends

Air-Cooled Segment to Dominate the Market

• Air-cooled or dry-type transformers, also known as cast resin transformers, are transformers with windings encased in epoxy resin. This makes the installation process easier, as they are dry and do not require any cooling oil. In addition, air-cooled transformers do not need to be contained in a fire-proof vault. Air-cooled transformers are used for low and medium voltage ranges application and are preferred for indoor uses.
• Open wound transformer (OWT), vacuum pressure impregnated (VPI), vacuum pressure encapsulated (VPE), and cast coil are the major types of air-cooled transformers that are currently available in the market. Different environments and applications call for different models. For instance, VPI types are recommended for those looking for radiance protection and advanced mechanical power, while a cast coil transformer is recommended for harsher environments.
• The air-cooled transformer is more environment-friendly, as compared to oil-filled type transformer. It is less flammable and poses less fire risk, making them ideal for commercial places, complexes, hospitals, shopping malls, etc.
• The demand for the dry-type transformer in the past has been driven by the increasing demand for electricity on account of urbanization and industrialization coupled with low daily maintenance cost of dry type transformer, especially in countries like Saudi Arabia, United Arab Emirates, Nigeria, Egypt, Kenya, and others. For instance, in Nigeria, the access to electricity is just about 60% in 2021, which relatively is low compared to the global standards and the country is investing in power infrastructure which is expected to drive the demand for air-cooled transformers in the coming years.
• Overall, the demand for air-cooled transformers is expected to increase during the forecast period as the demand for power T&D infrastructure increases in the Middle-East and Africa region coupled with the advantages of air-cooled transformer to be used in commercial and residential places without much hazards and environmental damage.

Nigeria to Witness Significant Growth

• Nigeria is the largest country in Africa in terms of population and is also one of the largest consumers of energy globally. The country has been dealing with constant power outages due to a lack of electricity supply, and most local inhabitants are forced to depend on alternative distributed generation solutions such as diesel-powered generators.
• Nigeria's transmission sector is regulated by the Transmission Company of Nigeria (TCN), a company Transmission Company of Nigeria (TCN) and its activities include electricity transmission, system operation and electricity trading. TCN is responsible for evacuating electric power generated by the electricity generating companies (GenCos) and wheeling it to distribution companies (DisCos) through its transmission infrastructure.
• As of 2021, Nigeria's transmission network consists of high voltage substations with a total maximum transmission wheeling capacity of 7,500 MW and over 20,000 km of transmission lines. The actual transmission wheeling capacity (5,300 MW) is higher than average operational generation capacity of 3,879MW but it is far below the total installed generation capacity of 12,522MW.
• The Nigerian grid infrastructure is essentially radial without any redundancies, making it highly susceptible to reliability issues. As of 2021, the average level of transmission losses in Nigeria is approximately 7.4% which is significantly higher than most emerging economies with average losses in the range of 2-6%. Due the above factors, the Nigerian electricity grid is highly vulnerable too large-scale blackouts and power outages.
• Most grid upgradation projects in Nigeria are being financed by major international banks and financial institutions such as the World Bank, Agence Français de Développement (AFD), African Development Bank (AfDB) and Japan International Cooperation Agency (JICA). Such large-scale projects dedicated to the upgradation and expansion of Nigeria's power generation and transmission infrastructure is expected to be a significant driving factor for the demand of transformers in the country.
• For instance, in February 2022, TCN received a delivery of 15 new transformers from the Apapa port in Lagos. The transformers include ten 60 MVA 132/33kV and five 150 MVA 330/132kV capacity transformers delivered to TCN Central Store in Ojo from where they are expected to be delivered to various projects across the nation. On installation and connection to the grid, the ten 60 MVA 132/33kV and five 150MVA 330/132kV capacity transformers will add 637MW and 850MW, respectively, to the transmission network, consequently increasing total capacity of the transmission system by 1487MW, while ensuring N-1 reliability criteria in the substations.
• Therefore, based on the above-mentioned factors, Nigeria is expected to witness significant demand in the Middle-East and Africa transformers market during the forecast period.

Middle East And Africa Transformer Industry Overview

The Middle-East and Africa transformer market is fragmented in nature. Some of the major players in the market (in no particular order) include ABB Ltd., Siemens AG, General Electric Company, Toshiba Corporation, and Mitsubishi Electric Corporation.

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