Market Trends of China Transformer Industry
This section covers the major market trends shaping the China Transformer Market according to our research experts:
Distribution Transformer Expected to Dominate the Market
- A Distribution Transformer or Service Transformer provides the final voltage transformation in the electric power distribution system. It will then step down the voltage applied in the distribution lines to the level used by various customers of the residential, commercial, and industrial sectors.
- Although certain national standards permit units with ratings as high as 5000 kVA to be referred to as distribution transformers, distribution transformers typically have values of less than 200 kVA. Because distribution transformers are designed to operate continuously, minimizing iron losses is crucial to their functionality, even when there is no load. They are made to be as efficient as possible at lesser loads because they typically don't run at full loads.
- China, because of its rapidly increasing urbanization and industrialization, is expanding its existing transmission and distribution system by laying new transmission lines and installing new substations to fill the energy demand-supply gap in the country.
- In 2021, the electricity generation for China was about 8,534.3 Terawatt-Hour (TWh), which was higher than what the country produced in 2020, 7,779.1 TWh. The increase in electricity generation exhibits an increase in the power generation capacity, which is likely to use new distribution transformers for the transmission of electricity to consumers.
- Hence, owing to the above points, the distribution transformer segment is likely to dominate the China Transformer Market during the forecast period.
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Increasing Renewable Energy Expected to Drive the Market
- Due to the constant increase in energy demand and an increasing issue related to greenhouse gas emissions, China is witnessing a large installation in renewable energy capacity, which requires a large amount of power and distribution transformers to transfer electricity from the generation site to the consumers.
- Moreover, China's increasing industrial operations to surpass the United States and become a superpower in terms of the economy are likely to drive the transformers' market in the country. The country's government has also banned coal-fired power plants at several locations; such measures instantly boosted the country's renewable installations and are likely to expand its transmission and distribution system to supply power.
- In 2021, the total renewable energy installation capacity in China was 1020.2 gigawatts (GW), which was more than the installed capacity of 2020, 899.6 gigawatts (GW). With the increasing growth in renewable power generation, particularly from wind and solar PV, and connecting those to the country's grid, the demand for transformers is expected to remain high in the country.
- Moreover, large-scale solar PV development in the country is supported by the government's subsidies. China has adopted a feed-in tariff subsidy policy for renewable energy, which has been marked as one of the most effective renewable energy support policies globally for solar PV developments.
- Hence, owing to the above points, increasing renewable energy is expected to drive the China transformer market during the forecast period.
