Smart Transformers Market Forecasts to 2030 – Global Analysis By Component (Hardware, Switches and Other Components), Application (Electric Vehicle Charging, Smart Grid and Other Applications), End User (Commercial, Industrial and Other End Users) and By

Smart Transformers Market Forecasts to 2030 – Global Analysis By Component (Hardware, Switches and Other Components), Application (Electric Vehicle Charging, Smart Grid and Other Applications), End User (Commercial, Industrial and Other End Users) and By Geography

According to Stratistics MRC, the Global Smart Transformers Market is accounted for $3.0 billion in 2023 and is expected to reach $6.9 billion by 2030 growing at a CAGR of 12.7% during the forecast period. An essential component of smart grids, smart transformers operate independently to continuously control voltage, keep the grid connected so that remote administration is possible, and deliver data and feedback regarding the power supply. A smart transformer achieves this through a process called voltage optimization. It provides the exact amount of electricity needed and adapts rapidly to changes in the power grid, functioning as a voltage regulator to maintain the optimized voltage.

According to International Energy Agency, in 2021, USD 289 billion was spent on smart grid development, increasing from USD 262.6 billion in 2020.

Market Dynamics:

Driver:

Growing demand for efficient power grids

As urbanization, industrialization, and digitalization continue to expand worldwide, there is a heightened need for electricity to power homes, businesses, and critical infrastructure. Traditional power distribution systems often struggle to handle the complexities of modern energy demands, leading to inefficiencies, voltage fluctuations, and reliability issues. Smart transformers offer a solution by incorporating advanced monitoring, control, and optimization capabilities. These transformers enable utilities and grid operators to enhance grid efficiency, reduce losses, and improve overall reliability.

Restraint:

High initial costs

While these transformers offer advanced monitoring, control, and optimization capabilities, the upfront investment required for their deployment can be substantial. The costs include not only the purchase of smart transformer equipment but also expenses related to installation, integration with existing grid infrastructure, and implementation of communication and monitoring systems. However, for utilities and grid operators, especially those operating on tight budgets or facing financial constraints, the prospect of making such significant investments upfront may act as a deterrent to adopting smart transformer solutions.

Opportunity:

Technological advancements

Innovations in materials, electronics, and communication technologies have revolutionized the capabilities of transformers, enabling them to become smarter, more efficient, and more reliable. Advanced materials such as silicon carbide (SiC) and gallium nitride (GaN) are enhancing the efficiency and power handling capabilities of transformers, reducing losses and improving overall performance. Moreover, the integration of digital monitoring systems, sensors, and sophisticated control algorithms allows smart transformers to provide real-time insights into grid conditions, enabling utilities to optimize operations and enhance grid resilience.

Threat:

Cybersecurity concerns

As integral components of modern grid infrastructure, smart transformers are vulnerable to cyber threats such as hacking, malware, and data breaches. The interconnectedness and digitization of smart grid systems increase their exposure to potential cyber attacks, which could compromise grid reliability, data integrity, and even public safety. Utilities and grid operators must implement robust cybersecurity measures to safeguard smart transformers and the broader grid ecosystem. However, ensuring cybersecurity can be challenging due to the evolving nature of cyber threats, the complexity of smart grid networks, and the need for continuous monitoring and updates to address vulnerabilities.

Covid-19 Impact:

Initially, the market experienced disruptions due to supply chain interruptions, manufacturing delays, and project postponements caused by lockdowns and restrictions on movement. Uncertainty regarding the duration and severity of the pandemic also led to cautious spending among utilities and grid operators, affecting investment decisions in smart grid infrastructure, including smart transformers. However, as the pandemic highlighted the importance of resilient and efficient energy infrastructure, there has been a growing recognition of the role of smart transformers in enhancing grid reliability, enabling remote monitoring, and supporting remote operations and maintenance activities.

The hardware segment is expected to be the largest during the forecast period

Hardware segment commanded the largest share throughout the forecast period. Advancements in materials and electronics have led to the development of more efficient and reliable hardware components for smart transformers, such as advanced semiconductor devices, high-performance transformers, and sensors. Additionally, these technological innovations enable smart transformers to deliver enhanced functionalities, including real-time monitoring, predictive maintenance, and self-healing capabilities, thereby addressing the evolving needs of modern grid infrastructure.

The electric vehicle charging segment is expected to have the highest CAGR during the forecast period

Electric Vehicle Charging segment is poised to hold profitable growth over the projection period as the increasing adoption of electric vehicles globally is leading to a surge in demand for EV charging infrastructure, including fast chargers deployed in public spaces, workplaces, and residential areas. Smart transformers play a crucial role in supporting this infrastructure by efficiently managing the increased electricity demand from EV charging stations, ensuring grid stability, and minimizing overloads. Additionally, smart transformers equipped with advanced monitoring and control capabilities enable utilities to implement dynamic charging strategies, such as demand response and load balancing, to optimize grid operations and accommodate the variable charging patterns of EVs.

Region with largest share:

Due to the growing adoption of renewable energy sources like solar and wind power requires advanced grid technologies for efficient integration, Asia Pacific region commanded the largest share of the market over the extrapolated period. Smart transformers facilitate smooth integration of renewable energy into the grid by managing voltage fluctuations and ensuring grid stability. Many countries are dealing with aging power grid infrastructure, leading to issues such as frequent outages and voltage fluctuations. These factors are boosting the regional growth.

Region with highest CAGR:

North America region is projected to witness substantial growth during the estimated time frame as the growing adoption of electric vehicles is placing additional strain on existing power infrastructure. Smart transformers can support the charging infrastructure for EVs by managing the increased demand for electricity in an efficient and reliable manner. The market is driven by the power industry's growing digitalization and the growing need to strengthen the grid. Furthermore, North American nations are concentrating on modifying, substituting, and extending their outdated grid infrastructure in order to enhance the grid's energy efficiency, monitoring, and power quality.

Key players in the market

Some of the key players in Smart Transformers market include ABB Ltd, CG Power and Industrial Solutions Limited, Eaton Corporation PLC, GE Power, General Electric Company, Hitachi Ltd, KONCAR - Electrical Industry Inc, Mitsubishi Electric Corporation, Schneider Electric SE, Siemens AG and SPX Transformer Solutions Inc.

Key Developments:

In April 2023, Eaton invests $500+ million in North American manufacturing, boosting essential technology capacity for infrastructure projects, specifically transformers. Signifying a significant step in strengthening regional manufacturing capabilities.

In February 2022, the Indian state government of Madhya Pradesh was set to expand and modernize its electricity network by deploying smart meters and smart grid technologies using EUR 140 million secured from German bank KfW. The modernization of the smart grid is expected to include all facets of technologies, including smart transformers.

Components Covered:
• Hardware
• Switches
• Converters
• Substation Automation Tools
• Other Components

Applications Covered:
• Electric Vehicle Charging
• Smart Grid
• Other Applications

End Users Covered:
• Commercial
• Industrial
• Other End Users

Regions Covered:
• North America
US
Canada
Mexico
• Europe
Germany
UK
Italy
France
Spain
Rest of Europe
• Asia Pacific
Japan
China
India
Australia
New Zealand
South Korea
Rest of Asia Pacific
• South America
Argentina
Brazil
Chile
Rest of South America
• Middle East & Africa
Saudi Arabia
UAE
Qatar
South Africa
Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2021, 2022, 2023, 2026, and 2030
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements

Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances