The global distribution transformers market is set to rise from $13.74 billion in 2015 to $16.67 billion by 2020, at a compound annual growth rate (CAGR) of 5 per cent, according to research and consulting firm GlobalData.

The company’s latest report said that the need to expand and upgrade existing distribution infrastructure to serve the growing demand for electricity will lead to a positive growth of the distribution transformers market over the forecast period.

In the emerging economies of Asia-Pacific (APAC) and the Middle East, extensive power plant capacity additions, economic growth, and the need to improve access to electricity are driving grid expansion and the distribution transformers market, added the report.

Swati Gupta, analyst covering power at GlobalData, said: “There have been comparatively low new distribution transformers installations in North America, while most of the market growth is contributed by the replacement market wherein the older transformers – more than 25 years-old – are being replaced with new.”

Similarly, many developed European countries such as the UK and Germany have aging grid systems and need to upgrade the distribution infrastructure.

In developing regions, the distribution transformers market is expected to witness tremendous growth. The APAC region, for example, will reach $7.66 billion by 2020, as countries become increasingly industrialised and rural electrification and grid loads grow.

Currently, there is a trend of shifting focus from the Americas towards emerging economies, such as those in the APAC region (China and India) and Latin America.

Gupta said: “Companies are starting to relocate their activities to these emerging countries due to their low-cost advantage.”

“There is also high growth in domestic demand for electricity in these areas, creating good potential for transformers. In this way, the modernisation and replacement activity in the transmission and distribution infrastructure acts as a substantial market driver,” he added. – TradeArabia News Service