Europe Smart Transformers Market Size
| Study Period | 2019-2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 1.56 Billion |
| Market Size (2029) | USD 4.46 Billion |
| CAGR (2024 - 2029) | 23.38 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Europe Smart Transformers Market Analysis
The Europe Smart Transformers Market size is estimated at USD 1.56 billion in 2024, and is expected to reach USD 4.46 billion by 2029, growing at a CAGR of 23.38% during the forecast period (2024-2029).
Over the medium period, factors such as the increasing focus of the governments across the European economies on adopting smart technology in power grid infrastructure and rising challenges, such as aging transmission and distribution (T&D) infrastructure, electric vehicle charging, and distributed generation, are expected to benefit the growth of smart transformers across the region.
On the other hand, the problem of low accessibility to electricity in underdeveloped nations worldwide and poor government regulations and initiatives to expand and modernize the grid infrastructure are expected to limit the market's growth.
Nevertheless, several governments of the European region are increasingly viewing smart grid technology as a strategic infrastructural investment that will sustain their long-term economic prosperity and help them achieve their carbon emission reduction targets. This, in turn, is expected to provide ample opportunity to the companies involved in the smart transformers market in the near future.
Germany is the largest and is expected to be the fastest-growing country, primarily driven by transmission and distribution developments. Increased demand for and consumption of renewable energy drives the country's market.
Europe Smart Transformers Market Trends
Distribution Transformers to Dominate the Market
- A smart distribution transformer is capable of active voltage regulation along with conservative voltage reduction-based frequency control. Further, an LV distribution management will be developed to aid the management decisions. The smart distribution transformer is an excellent alternative to conventional distribution transformers to introduce more smart features, which will improve the robustness, resilience, and flexibility to meet future challenges on the grid.
- Traditional distribution transformer terminals are designed in a way to provide specific control and monitoring functions for distribution transformers, thus having limitations in aspects such as inadequate scalability of software and hardware, proprietary communication, and non-standardized design, which commonly requires high costs for operation and upgrading. To address the situation, the smart distribution transformer terminal is proposed and defined with a combination of communication gateway function and distribution network monitoring and control capability.
- The growing emphasis on renewable energy generation worldwide, coupled with increasing electrical infrastructure projects, is expected to increase the demand for distribution transformers during the forecast period, thereby driving the smart transformers market.
- Significant economies, such as Germany, the United Kingdom, France, and others, contribute to the considerable demand for intelligent transformers, owing to the increasing replacement of aging power distribution equipment and the increase in the integration of renewables into the grid.
- Moreover, as the energy transition proceeds, power distribution is becoming more and more complex. Smart grids are required to monitor power grids and control the flow of energy. For instance, Burladingen, Germany, will soon witness a pioneering electrical substation connected to the grid. In February 2023, Distribution grid operator Netze BW announced plans to put the transformer station into operation by the end of 2023, which will be equipped with two tranformers featuring protection and control technology.
- Moreover, as per the International Energy Agency, investment spending in electricity grids in Europe increased to USD 65 billion in 2022 from USD 62 billion in 2021, which may drive the growth of smart transformers in Europe.
- Thus, the abovementioned points are expected to drive the segment's growth during the forecast period.
Germany is Expected to be the Fastest-growing Market
- Germany has elevated demand for transformers owing to several causes, including industrial applications, grid modernization, integration of renewable energy sources, and infrastructural growth. With aggressive goals for eliminating greenhouse gas emissions and increasing the proportion of renewable energy sources in its energy mix, Germany has been making a proactive transition to renewable energy. This transition requires the deployment of transformers suitable for integrating renewable energy sources, such as wind and solar, into the grid.
- In 2022, the German government announced a USD 21.07 billion investment plan for smart grid development, which includes funding for the deployment of smart transformers. The government is also targeting a 100% renewable energy mix by 2040, which will require a significant investment in smart grid infrastructure.
- Moreover, Germany is the largest country by size and population in Europe and, predictably, is also the largest energy consumer in the region. Renewable energy sources produced around 43.92% of the country's total electricity in 2022, which is in line with Germany's government's goal, which has envisioned increasing the share of renewables to at least 40% of electricity production in 2050.
- According to the International Renewable Energy Agency (IRENA), in 2022, Germany installed nearly 9.8 GW of renewable energy capacity, a 7.1% Y-o-Y rise in total installed capacity, and reached 148.37 GW. Further, the installed capacity of sources such as solar, onshore, and offshore wind is expected to increase exponentially, making it one of the significant markets for smart transformers.
- As of 2022, Germany's power industry is dominated by renewable energy, followed by coal and natural gas thermal power plants. Nearly 576.6 billion KWh of electricity was generated in 2022, of which about 44.3% was renewable, 45.9% was thermal, and the remaining was nuclear.
- Moreover, rapid urbanization, increasing demand for mobility, and the growing concerns of CO2 emissions across the country are progressing rapidly and are creating a demand for efficient and reliable transportation such as railways. With record investments, Germany's federal and state governments are promoting rail expansion throughout the country. The federal and state governments are investing over EUR 650 million in upgrading the rail networks in Rhineland-Palatinate and Saarland alone. Deutsche Bahn (DB AG) is modernizing about 100 kilometers of line, 115 switches, eleven bridges, and 75 stations in the two states. Such developments are expected to create significant opportunities for the smart transformer market during the forecast period.
- Therefore, the increasing developments of grid infrastructure, the growing demand for stable electricity, and the propelling investment in renewable energy in Germany are expected to positively impact the demand for the smart transformer market during the forecast period. Additionally, the increasing trends of railway network expansion and automation of electric grids are further expected to boost the demand for smart transformers in the region.
Europe Smart Transformers Industry Overview
The European smart transformers market is moderately fragmented. Some of the major players in the market (in no particular order) include Hitachi Energy Ltd, Siemens AG, Eaton Corporation PLC, Schneider Electric SE, and General Electric Company., among others.
Europe Smart Transformers Market Leaders
Hitachi Energy Ltd
Eaton Corporation Plc
Siemens AG
Schneider Electric SE
General Electric Company
*Disclaimer: Major Players sorted in no particular order
Europe Smart Transformers Market News
- March 2023: Ganz Transformers, the European technology provider for power grids, entered into a collaboration with Maschinenfabrik Reinhausen (MR) to manufacture digital transformers with the help of MR’s ISM digital platform for intelligent solutions.
- February 2023: UK Power Networks, a distribution network operator in South East England, announced an innovative trial, dubbed Project Stratus, which will introduce “world-first” technology from Amp X in the form of smart transformers to two existing substations in East Sussex. This endeavor will offer unprecedented live data regarding electrical usage and demand, allowing the organization to develop greater network resilience and support its goal of achieving a low-carbon future.
Europe Smart Transformers Market Report - Table of Contents
1. INTRODUCTION
1.1 Scope of the Study
1.2 Market Definition
1.3 Study Assumptions
2. EXECUTIVE SUMMARY
3. RESEARCH METHODOLOGY
4. MARKET OVERVIEW
4.1 Introduction
4.2 Market Size and Demand Forecast, in USD, till 2029
4.3 Recent Trends and Developments
4.4 Government Policies and Regulations
4.5 Market Dynamics
4.5.1 Drivers
4.5.1.1 Increasing Adoption of Smart Technology in Power Grid Infrastructure
4.5.1.2 Aging of Transmission and Distribution (T&D) Infrastructure
4.5.2 Restraints
4.5.2.1 Low Accessibility to Electricity in Underdeveloped Nations
4.6 Supply Chain Analysis
4.7 Porter's Five Forces Analysis
4.7.1 Bargaining Power of Suppliers
4.7.2 Bargaining Power of Consumers
4.7.3 Threat of New Entrants
4.7.4 Threat of Substitute Products and Services
4.7.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 Type
5.1.1 Distribution Transformers
5.1.2 Power Transfomers
5.2 Application
5.2.1 Smart Grid
5.2.2 Traction Locomotive
5.2.3 Other Applications
5.3 Geography
5.3.1 Germany
5.3.2 United Kingdom
5.3.3 Spain
5.3.4 France
5.3.5 Italy
5.3.6 Nordic Countries
5.3.7 Russia
5.3.8 Turkey
5.3.9 Rest of Europe
6. COMPETITIVE LANDSCAPE
6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 General Electric Company
6.3.2 Siemens AG
6.3.3 Eaton Corporation PLC
6.3.4 Schneider Electric SE
6.3.5 Hitachi Energy Ltd
6.3.6 Westrafo SRL
6.3.7 Societa Elettromeccanica Arzignanese SpA
6.3.8 GBE SpA
- *List Not Exhaustive
6.4 Market Ranking/Share Analysis
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
7.1 Smart Grid Technology as a Strategic Infrastructural Investment
Europe Smart Transformers Industry Segmentation
A smart transformer (ST) is a power-electronics-based transformer that adopts advanced control and communication technologies aiming not only to adapt the voltage level from MV to LV grids but also to provide ancillary services to the grid.
Europe's smart transformers market is segmented by type, application, and geography (Germany, the United Kingdom, Italy, Spain, France, and the rest of Europe). By type, the market is segmented into distribution transformers and power transformers. By application, the market is segmented into smart grid, traction locomotive, and other applications. The report also covers the market size and forecasts for the European smart transformers market across major regions.
For each segment, the market sizing and forecasts have been done based on revenue (USD).
| Type | |
| Distribution Transformers | |
| Power Transfomers |
| Application | |
| Smart Grid | |
| Traction Locomotive | |
| Other Applications |
| Geography | |
| Germany | |
| United Kingdom | |
| Spain | |
| France | |
| Italy | |
| Nordic Countries | |
| Russia | |
| Turkey | |
| Rest of Europe |
Europe Smart Transformers Market Research FAQs
How big is the Europe Smart Transformers Market?
The Europe Smart Transformers Market size is expected to reach USD 1.56 billion in 2024 and grow at a CAGR of 23.38% to reach USD 4.46 billion by 2029.
What is the current Europe Smart Transformers Market size?
In 2024, the Europe Smart Transformers Market size is expected to reach USD 1.56 billion.
Who are the key players in Europe Smart Transformers Market?
Hitachi Energy Ltd, Eaton Corporation Plc, Siemens AG, Schneider Electric SE and General Electric Company are the major companies operating in the Europe Smart Transformers Market.
What years does this Europe Smart Transformers Market cover, and what was the market size in 2023?
In 2023, the Europe Smart Transformers Market size was estimated at USD 1.20 billion. The report covers the Europe Smart Transformers Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Europe Smart Transformers Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Europe Smart Transformers Industry Report
Statistics for the 2024 Europe Smart Transformers market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Europe Smart Transformers analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
