US Transformer Market 2024–2033

Reports Description

According to current market research conducted by the CMI Team, the US Transformer Market is expected to record a CAGR of 7.2% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 13,487.5 Million. By 2033, the valuation is anticipated to reach USD 25,216.4 Million.

The US transformer industry is an ever-changing segment that is very important in electricity transmission and distribution. It includes activities like manufacturing and installing power and distribution transformers, which are critical in ensuring that the electrical grid remains stable.

There are market drivers such as increasing demand for energy, maturing infrastructure systems, and adoption of clean energy. In wire technology, most giant companies, including GE, ABB, and Siemens, enter the picture through smart transformers and digital monitoring technologies.

Government initiatives reducing health risks related to energy consumption and regulation focusing on strengthening the grid are also contributing to the expansion of the market. This is characterized by the high demand for change towards clean energy and new technologies for delivering quality power while serving different industries.

US Transformer Market – Significant Growth Factors

The US Transformer Market presents significant growth opportunities due to several factors:

• Renewable Energy Integration: As wind and solar energy sources continue to expand and connect to the grid, new wires and transformers are needed, and new management approaches are warranted.

• Grid Modernization Initiatives: Regulatory compliance gaps and aging equipment are causing a sustained expansion of financial resources in grid enhancement, fuelling the demand for greener and smarter transformer technologies.

• Electrification of Transportation: The rise in the number of electric vehicles (EVs) is further strengthening the already existing grid improvement and grid-extending capabilities, thus creating a larger market for such transformers as the power load increases and more charging sites are developed.

• Resilience and Reliability Requirements: The awareness of the need to combat global warming has sharpened the focus on power transformers designed to improve the features and operational capacity of the grid using more efficient technology that is less prone to extreme weather conditions.

• Smart Grid Technologies: A corollary to grid modernization is the development of transformers with digital monitoring and control devices, which aid in regulating grid operations and promote energy efficiency.

• Energy Storage Integration: With the emergence of energy storage systems such as batteries, there is a need for transformers that can incorporate and control the use of energy storage systems in the grid for stability and flexibility of the power supply.

US Transformer Market – Key Developments

The Transformer Market from the US has undergone various changes in the past, where the companies are trying to increase their chance on the market and exploit synergies to enhance their products and improve their profitability. Some examples of M&A activities that can be noted in the US Transformer Market include:

• In 2023, Hyundai Electric will benefit from the guaranteed order to AEP for the supply of 3,500 distribution transformers, which the company won in 2022 for USD 86.3 million. The order is to be executed over three states: Texas, Ohio, and Oklahoma. This will consequently improve factors such as the demand for transformers and the growth rate of the market during the forecasting period.

• In 2022, Hitachi Energy intends to invest more than USD 37 million in the enhancement and modernization of the existing power transformer manufacturing site in South Boston, Virginia. This investment aims to satisfy broad utility customer demand and new growth areas in renewable energy generation and data centers.

These developments have, in turn, enabled the companies to augment their product range, increase their presence in the market, and take advantage of the opportunities for growth in the US Transformer Market. The tendency will also remain as the companies in question try to gain a competitive advantage over their rival companies in the future.

US Transformer Market – Significant Threats

The US Transformer Market faces several significant threats that could impact its growth and profitability in the future. Some of these threats include:

• Supply Chain Constraints: The post-COVID-19 scenario has led to global supply chain constraints, which include shortages of raw materials or certain components. These have resulted in delays in transformer production scheduling and rising transformer production costs.

• Regulatory Relations: Changing policies regarding environmental factors, regulatory requirements and tariffs, and other requirements can create complexity over timing and resources in transformer manufacturing and distribution.

• Political Risks: The advent of communication technologies and the interconnection of grid substations make transformers prone to potential malicious activities such as hacking and leaks of confidential information, thus endangering the grid structure and performance.

• Economic Recession: Economic factors such as interest rates, inflation, and GDP fluctuations contribute to decision-making regarding investment in or implementation of grid projects, affecting the rate of purchase of transformers.

• Threats from interchangeable products: New developments in power storage solutions and microgrid technology provide an alternative means of managing the grid and dispersing power, thereby challenging the conventional transformer solution.

Category-Wise Insights

By Type:

• Power Transformers: In the US, power transformers are the most important component since they are critical components in electricity transmission and distribution networks. Specifically, they step-up voltages for transmission over long distances and step-down voltages for distribution to the local network. In recent activities, there has been a tendency to develop more capability to accommodate the integration of renewable sources such as wind and solar. Integrating smart grid technologies into power transformers has been on the rise to improve their monitoring and control features as well as the stability of the grids, hence answering the demands of a modern electrical grid.

• Distribution Transformers: Distribution transformers are used primarily in the last stage of electricity supply across the USA to reduce the high-voltage received power to lower voltages for consumption in residential, commercial, and industrial areas. The market trend focuses on modernizing the energy sector to increase energy efficiency and address environmental issues through green materials. Digitalization is a must now with smart distribution transformers supported by sensors and IoT that allow monitoring, predictive maintenance, and efficient energy management, improving the grids’ reliability and enhancing their performance.

• Specialty Transformers: In the US, different transformers are designed to meet the needs of different industries or the specific needs of a particular operation or installation. These are rectifier transformers used in various industrial tasks, furnace transformers used in steel production, and traction transformers used in transportation such as railways. Particular developments include incorporating advanced materials, reducing size, and offering more design options to satisfy the increasing needs for specialized uses like the integration of renewable energy, energy storage systems, and electric vehicle charging stations.

By Power Rating

• Small Transformers (up to 60 MVA): Small transformers are intended for use in homes, businesses, and industrial settings for localized distribution and voltage stabilization. The trends undertaken in the US market are miniaturization and intellectualization in energy conservation and satisfying strict environmental requirements. Small transformer demand is particularly in the growth trend with the increased use of renewable energy and smart grid systems, as these transformers support grid stabilization and connection with distributed energy resources.

• Medium Transformers (61 MVA to 600 MVA): Medium-sized transformers are critical for substation and industrial applications that require moderate to high power transmission ranges. The US is increasingly focused on reliability, efficiency, and sustainability. Many trends include innovative insulation systems, developing digital systems for monitoring, and deploying systems to maintain predictive capability. These transformers enable grid modernization programs and embed renewable energy sources within the electric grid.

• Large Transformers (above 600 MVA): Heavy-duty transformers are characteristic of electricity generation facilities and systems gum, including core substations and bulk transmission systems. In the US market, trends aim to increase effectiveness and cut the number of losses and tranquillity concerns under long-term high-load operations. Key economic drivers include the development of new effective cooling devices, the use of high-technology materials, and diagnostics and monitoring through the use of the power of the internet.

By Insulation Type

• Dry-type Transformers: The dry-type transformers do not contain any fluid to cool or insulate parts since they use non-liquid material like epoxy resin or cast resin to insulate the windings. There is a trend in the US market that leans towards dry-type transformers due to their safety, less pollution – no oil – and in cases where the transformer is installed indoors, the need to compromise on fire safety is avoided.

• Liquid-immersed Transformers: These transformers have windings immersed in oil or another liquid dielectric for insulation and cooling during service. They are common in the USA’s power distribution utility network and industrial operations. Current developments are in the direction of using lower, more environmentally safe, and biodegradable flammable oils in gas transformer applications and increasing construction that augments operational effectiveness and dependability.

By Phase

• Single-phase Transformers: The main purpose of single-phase transformers is to connect two receiving circuits operating at the same frequency but different voltages. In the USA, they are typically employed in residential applications, where they supply electrical power to household appliances and systems. Current developments include improving the design so that it is smaller and meets energy efficiency requirements and integrating smart grids for better monitoring and control of residential power distribution systems.

• Three-phase Transformers: Three-phase transformers are employed in industrial and commercial applications where higher loads are required, and efficient electricity distribution and transmission are paramount. This enables the efficient management of electricity load by optimizing the load across three-phase distribution of electrical power systems. In the USA market, the transformer’s capacity is increasing considering the persistent rise of industrial appetite for energy, the use of modern cooling systems to enhance the performance of such transformers, and the use of smart monitoring tools to enhance the performance of grid systems.

By Cooling Type

• Oil-cooled Transformers: In oil-filled transformers, the core and windings are immersed in oil to enhance cooling, insulating, and outer insulation. In the US market, attention is given to such transformers because of their cooling capacity and insulation properties, which are critical in high-voltage applications. Trends for this segment include moving away from traditional liquids toward ‘greener’ fluids such as bio-oils and esters and introducing better safety and fire protection to comply with challenging market requirements.

• Air-cooled Transformers: Natural cooled transformers save energy by providing the cooling operation without using any liquid coolant to be circulated, rather it utilizes natural convection or forced air. In the US, factors motivating the use of these transformers include the ease of construction, low operational costs, and the fact that they can be installed indoors in situations where a liquid filled transformer may not be viable. New trends concentrate on the improvement of cooling performance due to advanced fan design, as well as lightweight materials and compact shape, to save space and enhance energy saving for a range of industrial and commercial processes.

By End Users

• Residential: Transformers in the housing class for residential use are meant to reduce voltage in-house with 1,1 kV of the electric current sourced from the high to low voltage distribution networks. Trends include a shift towards achieving various energy efficiency standards such as the DOE standard, using more energy management smart technologies, and developing distributed generation technologies like DSPPs such as rooftop solar with associated grid-tied inverters.

• Commercial: For commercial purposes, transformers are equipped to reduce voltage levels for lighting or HVAC equipment and systems in office buildings, retail stores, and other establishments. Trends include a need for smaller, lighter, and more energy-efficient transformer designs, technology adoption where building energy management systems are interfaced with transformers and equipment, and strict environmental policies.

• Industrial: Healthy demand in the US for industrial transformers is driven across manufacturing, minerals, and service industries, with the need to transform high voltage into low or the opposite for manufacturing or other machines. Current trends include heavy-duty designs for difficult working conditions, the creation of transformers to power specific industrial plants, an increase in electronic-mediated predictive maintenance, and more collaborations with robotic and control systems.

• Utility: In the US, utility transformers play a pivotal role in electric power’s transmission and distribution networks, as they convert voltages for transmission over long distances and convert them back down for local usage. Trends include upgrading physical assets with strategic investments, including more volatile energy sources into the grid, grid hardening, and real-time management and monitoring of the grid’s stability through smart grid technologies.

• Renewable Energy: The challenge of the electrical machines is to accommodate the incorporation of renewable generation sources like solar and wind, thus dispelling the barriers to entry into the US unified power system.’ Other trends include transformers designed for distributed and variable generation, smart grid improvements that incorporate storage technology and inverter technology, efforts to balance renewable output with grid technologies, and efforts to make use of renewable energy resources more efficient and reliable.

Report Scope

Competitive Landscape – US Transformer Market

The US Transformer Market is highly competitive, with many manufacturers and retailers operating in the US. Some of the key players in the market include:

• General Electric Company (GE)
• ABB Ltd.
• Siemens AG
• Schneider Electric SE
• Mitsubishi Electric Corporation
• Eaton Corporation plc
• SPX Transformer Solutions Inc.
• Howard Industries Inc.
• Virginia Transformer Corp.
• Waukesha Electric Systems
• Hammond Power Solutions Inc.
• CG Power and Industrial Solutions Limited
• Toshiba Corporation
• Hyundai Electric & Energy Systems Co. Ltd.
• Hitachi Energy Ltd.
• Others

These companies operate in the market through various strategies such as product innovation, mergers and acquisitions, and partnerships.

New players entering the transformer market in the US are usually described as innovators with their technological and development approaches. They tend to find a niche in narrow niches, such as smart grid solutions, advanced materials, and digitalization. Some major players dominating this market are ABB, Siemens, Schneider Electric, General Electric, and Eaton Corporation.

These organizations use large R&D funding, worldwide operations, and existing clientele to remain at the forefront. These companies succeed in maintaining large market shares and shaping industry trends with comprehensive Product portfolios, joint ventures, and innovative energy-efficient transformers, grid automation systems, and green technologies.

The US Transformer Market is segmented as follows:

By Type

• Power Transformers
  • Step-up Transformers
  • Step-down Transformers
• Distribution Transformers
  • Pole-mounted Transformers
  • Pad-mounted Transformers
• Specialty Transformers
  • Isolation Transformers
  • Instrument Transformers
  • Auto Transformers

By Power Rating

• Small (up to 60 MVA)
• Medium (61 MVA to 600 MVA)
• Large (above 600 MVA)

By Insulation Type

• Dry-type Transformers
• Liquid-immersed Transformers

By Phase

• Single-phase Transformers
• Three-phase Transformers

By Cooling Type

• Oil-cooled Transformers
• Air-cooled Transformers

By End Users

• Residential
• Commercial
• Industrial
• Utility
• Renewable Energy