The India power transformer market is expected to rise at a CAGR of more than 3% during 2020 - 2025. Factors such as increasing power generation capacity to meet energy demand and expansion of transmission and distribution systems are likely to drive the India power transformer market. However, delay in the implementation of the projects due to lengthy government procedures is expected to restrain the India power transformer market.
- Small capacity transformer, due to the increasing number of renewable energy installations across the region, is expected to be the fastest-growing segment for the India power transformer market during the forecast period.
- A smart grid is seen as a highly efficient and economical technology that can reduce carbon emissions. Such up-gradation for now exiting networks in the region can create several opportunities for the India power transformer market in the future.
- Several favorable government policies in India made in accordance with the increasing energy demand, are likely to drive the India power transformer market.
Key Market Trends
Small Capacity Segment Expected to be the Fastest Growing Market
- The power transformer is used to transfer electrical energy in any electrical or electronic circuit between the generator and the primary distribution circuits. These transformers are used in distribution systems to interface step-up and step-down voltages.
- India, 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, which is likely going to drive the market.
- Moreover, a rapid increase in renewable energy installations at different sites that require transformers of step-up and step-down of the electrical voltage that is being transferred through it, which is likely going to drive the market. Most of the solar and wind energy use small capacity transformers to transfer electricity into the country's grid. In 2019, the total renewable energy installation in the country was 128.23 gigawatts (GW), which higher than its installation in 2018, 118.07 gigawatts (GW).
- In June 2020, Adani Green Energy Limited, subsidiary of Adani Group won a solar agreement from the Solar Energy Corporation of India (SECI) to develop 8 gigawatts(GW) of solar projects along with a commitment to establish 2 gigawatts (GW) of new solar cell and module manufacturing capacity. The agreement is the largest of its type in the world and is likely going to entail a single investment of USD 6 billion. It is expected to be complete by 2025.
- Hence, owing to the above points, the small capacity transformer is likely to be the fastest-growing segment in the India power transformer market during the forecast period.
Government Policies Expected to Drive the Market
- India's power sector is undergoing a wide-scale transformation, owing to the country facing steep electricity demand growth rates. Several parts of India witness high power cuts due to the growing demand for electricity and the supply gap. To address the issue of electricity reliability, the government has implemented policies to increase electricity generation and encourage consumers to reduce their consumption during peak hours.
- In 2019, the ministry of new and renewable energy (MNRE) launched the Pradhan Mantri Kisan Urja Suraksha evem Utthan Mahabhiyan (PM KUSUM) scheme for farmers for installation of solar pumps and grid-connected solar and other renewable power plants in the country. The program aims to add solar and different renewable capacities of 25,750 MW by 2022, with the total central financial support of Rs. 34,422 crore, including service charges to the implementing agencies. The scheme's purpose is to increase the electric access in the rural parts of India and is likely going to expand transmission and distribution system, which is expected to drive the country's power transformer market.
- In recent years, the government has launched several schemes, such as the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), and National Electricity Fund (NEF), to improve the distribution sector in the rural and urban areas, which is expected to drive the demand for power transformers in India.
- Moreover, transformers produced in the country have been brought under mandatoryBureau of Indian Standards (BIS) certification that has resulted in the standardization of the product, which has led to quality improvement and reduction of failure in transformers. These transformers have been brought under a mandatory BEE star labeling scheme, which has resulted in the use of modern technology in manufacturing energy-efficient transformers.
- In 2018, the electricity generation for India was about 1561.1 Terawatt-Hour (TWh), which was higher than what the country produced in 2017, 1470.3 TWh. The increase in electricity generation exhibits an increase in the number of power generation capacity, which is likely to use new power transformers for transmission of electricity to the grids.
- Hence, owing to the above points, government policies are expected to drive the India power transformer market during the forecast period.
The India power transformer market is fragmented. Some of the key players in this market include Siemens AG, ABB Ltd., General Electric Company, Mitsubishi Electric Corporation, and CG Power and Industrial Solutions Ltd.
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