transformer report ed 6 2018 - statplan energy research · chapter contains a separate report on...

Transformer Report Ed 6 2018

Power and Distribution Transformer

Market Report

Chapter Summaries

Table of Contents

Sample Tables

Sample Pages

Edition 6

January 2018

StatPlan Energy Research

Transformer Report Chapter Summaries

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EXECUTIVE SUMMARY

Chapter 1 - THE POWER AND DISTRIBUTION TRANSFORMER MARKET

Total demand for power and distribution transformers in 2016 is summarised with cagr in $ totals, and

GVA for generator transformers, power network transformers and distribution network transformers.

Chapter 2 - THE GROWTH OF THE WORLD’S TRANSFORMER FLEEET, COMPARISON OF SIX STATPLAN

SURVEYS, EDITIONS 1 - 6

A comparison of data of the growth of the transformer stock as measured in the last six StatPlan

Transformer Surveys.

Chapter 3 – NORTH AMERICAN TRANSFORMER MARKET

Analysis of demand and transformer stock by category; GSU, power transformers and distribution

transformers. Detailed shipment data for distribution transformers in the US is only available for the years

2009 by transformer type. Market drivers and utility investment are outlined. The manufacturing industry

is analysed in detail by transformer category; LPT, power, medium power transformers, liquid and dry type

MV transformers, LV dry type. Purchase influences and delivery channels are analysed. Efficiency are

outlined.

Chapter 4 - EUROPEAN TRANSFORMER MARKETS

The European market for power and distribution transformers in estimated at ex-factory cost, for

generator transformers, transmission power transformers and distribution transformers for every country.

Regional overview of the European utility system is provided, with details of utilizes and network structure,

including voltage analysis. Efficiency measures are outlined. The changing network landscape of

Distributed Power and Smart Transformers are outlined. Over the last five years, the EU power sector has

been hit by a “perfect storm” of macroeconomic and industry-specific factors that have led to overcapacity

and low prices. MPS and market drivers are analysed. As a result, the region’s large publicly traded utilities

have, on average, lost half of their market capitalisation since 2008, destroying around EUR 500 billion of

shareholder value. Tis is outlined and analysed in detail focusing on the major utilizes affected. The

chapter contains detailed marketing sections for the major countries in Europe; France, Germany, Italy,

Spain, United Kingdom and Turkey, analysis of manufacturing facilities, especially the global leaders - ABB,

Siemens, Alstom, Schneider, Legrand.

Chapter 5 - CIS TRANSFORMER MARKET

The CIS market for power and distribution transformers in estimated at ex-factory cost, for generator

transformers, transmission power transformers and distribution transformers for every country. The

chapter contains a separate report on the major CIS country, Russia.


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Chapter 6 - MIDDLE EAST AND AFRICA TRANSFORMER MARKETS

The Middle Eastern and African markets for power and distribution transformers in estimated at ex-factory

cost, for generator transformers, transmission power transformers and distribution transformers for every

country. Individual sections on Iran, Saudi Arabia and UAE.

Chapter 7 - ASIA PACIFIC TRANSFORMER MARKETS

The Asia Pacific markets for power and distribution transformers in estimated at ex-factory cost, for

generator transformers, transmission power transformers and distribution transformers for every country.

Separate detailed sections are included for China, India, Japan, Korea, Indonesia, Taiwan and Thailand. An

interesting analysis is provided of investment as a % of GDP, which shows clearly the dominance of the

Asian countries and MENA with implications for markets.

Chapter 8 - LAC TRANSFORMER MARKETS

The LAC markets for power and distribution transformers in estimated at ex-factory cost, for generator

transformers, transmission power transformers and distribution transformers for every country. The two

largest market, Brazil and Mexico are analysed individually.

Chapter 9 – THE VALUE CHAIN – FROM MATERIALS TO CAPEX

The cost of any product such as transformers or switchgear can be measured in a number of ways, from

being a piece of unworked metal, to its final installation in working order and finally as a constituent of

capital expenditure. Different price levels are important in this supply chain. These are defined and

analysed with % ratios for each step in the sequence. The value chain differs for different routes to market

and is a fundamental issue for channel strategy.

Chapter 10 – TRANSFORMERS AT RETAIL PRICE AND INSTALLED COST

Demand by region is summarised at retail price and installed coast.

Chapter 11 - UTILITY, GSU & INDUSTRIAL POWER AND DISTRIBUTION TRANSFORMER INSTALLED

CAPACITY, NUMBERS AND AVERAGE DISTRIBUTION TRANSFORMER KVA PER UNIT

A detail set of tables of Generator, Utility and Industrial Power and Distribution transformer capacity

(MVA), numbers of units and kVA/unit for distribution transformers, by country and ownership, for 2017.

Chapter 12 - NETWORK TRANSFORMER LAYOUT

In the T&D industry, GSU, power network and distribution network transformers are one of the major

components of equipment, in addition to switchgear, cables and other items of equipment. Transformers

are needed at all stages in an electrical supply system when the voltage level changes, either up or down

and the transport of power goes through several stages between generation and final delivery to the

consumer. These stages vary according to the design of the system. The chapter outlines the various

stages of the power networks in detail and identifies where the different types of transformers are

positioned, flagging regional differences in practice, with regional summaries.


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Chapter 13 - THE LONG-TERM DEMAND CYCLE 1900-2050

Global installed transformer capacity has risen every year throughout the last and current centuries, from

22 GVA in 1900 to 45,188 GVA in 2016. The growth has been linear and it will continue as such until 2050.

At face value the steady rise in installed capacity suggests that annual demand for power and distribution

transformers will rise steadily every year on a linear path, but this is not the case. It was such an assumption

as this which led to unsustainable surpluses of production capacity in the electro-technical industry in the

1990s and the demise of many hitherto respected and successful companies. Over 200 transformer

factories were closed between 1970 and 2000. Figures plot installed transformer capacity and annual

demand based on replacement cycles of 40 years for power transformers and 30 years for distribution

transformers. The long-term demand cycle of new and renewal does not equate to short term

expenditure. At present, if replacement had been carried out as needed demand would be going down.

However, replacement has been delayed for years, especially in the transmission sector and short-term

market is increasing. The long- term demand cycle is a tool for long-term planning, while the short-term

expenditure projections are for immediate sales and marketing purposes.

Chapter 14 - TRANSFORMER:GENERATOR RATIOS - MVA:MW

The ratio of transformer capacity to generating capacity is a useful statistic because generating capacity is

comprehensively recorded whereas transformer capacity is less well documented. This enables us not only

to confirm snapshots of transformation capacity at any point in time but also to plot long term trends and

demand cycles for transformers based on the historical data for generating capacity. Power transformers

have along service lives, often 40 years or more, with some still in service aged 60-80 years and even a few

100 years old. It is therefore essential to plot long term installed capacity. There are variations between

countries, which are the result of different network designs and voltage classes. The ratios are given for

every country at four stages; GSU, power network, distribution network and total generator transformer

capacity.

Chapter 15 - SMART TRANSFORMERS

Challenges such as the aging power grid, increasing energy demands, spiraling cost of generating electricity and its cost on the environment all point toward the need for a grid that can produce and distribute energy more efficiently and reliably. The smart grid is being developed to deal with these problems. Transformers serve as a hub for collection and distribution of energy and are a key component of a successful transition to a smart grid. The smart grid concept ties together all aspects of the power system, from the plug in the wall at a house or office to a factory, to the distribution system, to power plants of all kinds. For the smart grid to work efficiently, there will be a need for smart transformers. As part of the distribution network, there are millions of transformers in the world; unfortunately, very few have any intelligence or communication capabilities that meet advanced metering infrastructure (AMI) standards or are parts of an advanced sensor infrastructure (ASI) network.

Chapter 16 - N-1 STANDARD, N-2 AND 2N, REDUNDANCY AND REPLACEMENT

Redundancy is a crucial consideration in infrastructure design and has major implications for market size

calculations. The following factors are reviewed; the impact of network failure, transformer failure,


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industrial reliability, network reliability, N-1 and the networks, contingency planning for network failure

and electricity distribution.

Chapter 17 - PRICE TRENDS AND FACTORS DRIVING TRANSFORMER PRICES

In recent years, the prices of electrotechnical products have been volatile due to variations in many factors

which affect them. Price trends are reviewed with commentary on PPI - Producer Price Index, industry

trends, production capacity, and the manufacturing input cost composition. A review of electrical steel

production and capacity is included.

Chapter 18 - THE POINT OF CONNECTION, CENTRAL AND DISTRIBUTED GENERATION AND VOLTAGE

The generating mixture is changing, and two aspects will impact on the transformer stock; increases in

distributed power and in renewables. The non-hydro renewable capacity consists mainly of wind power and

solar PV, which have grown rapidly in the last two decades. They will affect transformers because the power

generated enters the grid at different points and at different voltages.

Chapter 19 - MEPS - MINIMUM ENERGY PERFORMANCE STANDARDS

Losses in transmission and distribution networks constitute the single biggest loss in any electricity system.

Approximately 70% of the losses in electricity networks occur in the distribution network with conductor

accounting for 42% of these losses and transformers about 30%. Transformers operate 24 hours/day, 365

days per year and have very long lifetimes, typically 40-50 years for power transformers and around 30

years for distribution transformers. Energy consumption during its service life is the dominant factor in

their life-cycle assessment environmental impact. The increased use of electronic equipment can lead to

increased harmonic currents and higher losses in transformers. Transformers are already efficient pieces

of equipment, with efficiency in the range of 95 to 99 The issue is discussed and details of mandatory

efficiency standards around the world supplied. MEPS Aer outlined for each major country.

Chapter 20 - ENERGY EFFICIENCY AND HIGH EFFICIENCY TRANSFORMERS

Development of a new technology - amorphous core transformers. Amorphous core transformers

(AMTs) significantly reduce no-load losses by using an amorphous alloy for the iron core, on which the

transformer windings that carry the electricity are coiled. The technology and market penetration is

outlined by region and major country.

Chapter 21 - TRANSFORMER PRODUCTION CAPACITY

Manufacturers of larger power transformers are easier to identify and their production capacity is either

published or can be estimated. Most countries have numbers of small local producers of distribution

transformers which are sold to local distribution utilities and are poorly documented. Some large countries

have a lot of these companies, notably China, India, Europe and the United States. China, Europe and the

United States have large numbers of distribution utilities, India fewer. The chapter surveys the global

situation with detailed reports for the major countries.

Chapter 22 - GLOBAL MARKET SHARE POWER AND DISTRIBUTION TRANSFORMERS, VALUE, 2017


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Global market shares for the major transformer manufacturers.

Chapter 23 - LOGISTICS

Power transformers, especially GSU and quad boosters, are among the largest and heaviest pieces of

equipment that must be transported, sometimes over long distances. Because of their size and the small

numbers in service there are only a few manufacturers of the largest units in the world, thereby

necessitating long and complex logistics. This is increasingly mentioned by vendors as a major cost and a

consideration in locating manufacturing sites. It is not our purpose to provide a detailed survey of logistics

in this report but to give a flavour of what is an increasingly important issue of the complexities of delivery

of large, heavy equipment. The chapter contains some graphic illustrations of logistical problems and

mishaps, which demonstrate the difficulties that planners face more effectively than any descriptions.

Chapter 24 - ELECTRIFICATION

The impact of increased electrification on future markets is described with its advantages in terms of

electrical goods and aspirations, which vary according to the sophistication of the electrical market in a

country. Factors driving the increase in numbers of electrical connections are assessed with tables of

electrification levels for every country, from 1950 to 2050.

Chapter 25 - METHODOLOGY

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Table of Contents EXECUTIVE SUMMARY ....................................................................................................................................................19

The power transformer market ..............................................................................................................................19

United States ...........................................................................................................................................................20

Europe .....................................................................................................................................................................22

CIS ...........................................................................................................................................................................23

Middle East and Africa ............................................................................................................................................24

Asia Pacific ..............................................................................................................................................................24

China .......................................................................................................................................................................24

Japan .......................................................................................................................................................................26

India ........................................................................................................................................................................26

Korea .......................................................................................................................................................................27

Indonesia .................................................................................................................................................................28

LAC ..........................................................................................................................................................................28

Long term demand cycle .........................................................................................................................................28

Transformer: generator capacity ratios - MVA - MW .............................................................................................29

Channels to market .................................................................................................................................................30

Transformer types ...................................................................................................................................................30

Efficiency transformers ...........................................................................................................................................31

Smart transformers .................................................................................................................................................31

Trends in the generation mix ..................................................................................................................................32

Manufacturing capacity, global and by region .......................................................................................................32

Price trend ...............................................................................................................................................................33

Redundancy ............................................................................................................................................................33

Logistics ...................................................................................................................................................................34

Electrification ..........................................................................................................................................................34

1.THE POWER AND DISTRIBUTION TRANSFORMER MARKET .........................................................................................35

2.THE GROWTH OF THE WORLD’S TRANSFORMER FLEEET SIX STATPLAN SURVEYS, EDITIONS 1 - 6 ............................37

3.NORTH AMERICAN TRANSFORMER MARKET ..............................................................................................................39

MARKET REVIEW .....................................................................................................................................................39

Transformer stock ...................................................................................................................................................40

Composition of demand .........................................................................................................................................41

The utility market in the United States ...................................................................................................................42

Transformer market drivers ....................................................................................................................................44

Utility investment....................................................................................................................................................45

Manufacturing industry review - facilities ..............................................................................................................45

Power transformers ................................................................................................................................................46

USA plant ................................................................................................................................................................46

NAFTA suppliers in Canada and Mexico .................................................................................................................46

Large power transformers (LPT) .............................................................................................................................47

Medium power transformers .................................................................................................................................50

Distribution transformers .......................................................................................................................................50

MV distribution transformer ...................................................................................................................................50

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Liquid-immersed .....................................................................................................................................................50

Dry type ...................................................................................................................................................................51

LV distribution transformers ...................................................................................................................................51

Dry type ...................................................................................................................................................................51

Amorphous core transformer manufacturers ........................................................................................................51

Canadian manufacturers .........................................................................................................................................51

Purchase considerations and delivery channels .....................................................................................................52

National Electrical Manufacturers Association (NEMA) .........................................................................................52

CEE- Consortium for Energy Efficiency ....................................................................................................................53

MEPS standards ......................................................................................................................................................53

Canadian standards.................................................................................................................................................53

4.EUROPEAN TRANSFORMER MARKETS .........................................................................................................................54

REGIONAL MARKET .................................................................................................................................................54

Regional overview of the European utility system .................................................................................................57

Transformer voltages in the utility network and industry ......................................................................................58

High efficiency transformers ...................................................................................................................................58

A changing network landscape - distributed power - smart transformers.............................................................59

European utility crisis ..............................................................................................................................................59

Transformer market Drivers ...................................................................................................................................61

MEPS Standards ......................................................................................................................................................62

European transformer manufacturing industry review ..........................................................................................62

FRANCE ...................................................................................................................................................................65

Annual demand power and distribution transformers ...........................................................................................65


Market drivers .........................................................................................................................................................65

Market leaders – Alstom, Schneider, development in France ................................................................................65

Transformer manufacturers....................................................................................................................................66

GERMANY ................................................................................................................................................................68



Market drivers .........................................................................................................................................................68

Market leader - Siemens .........................................................................................................................................68

German utility crisis ................................................................................................................................................69


ITALY ........................................................................................................................................................................71



Market drivers .........................................................................................................................................................71


SPAIN .......................................................................................................................................................................72



Market drivers .........................................................................................................................................................72

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UNITED KINGDOM ..................................................................................................................................................73



Market drivers .........................................................................................................................................................73


TURKEY ....................................................................................................................................................................75



Market drivers .........................................................................................................................................................75


5.CIS TRANSFORMER MARKET ........................................................................................................................................77

RUSSIA .....................................................................................................................................................................78



The Russian power system ......................................................................................................................................78

Market drivers .........................................................................................................................................................79

Russian transformer manufacturers .......................................................................................................................79

Ukrainian transformer manufacturer .....................................................................................................................80

6.MIDDLE EAST AND AFRICA TRANSFORMER MARKETS ................................................................................................81

IRAN ........................................................................................................................................................................84



SAUDI ARABIA .........................................................................................................................................................86



UAE ..........................................................................................................................................................................88



7.ASIA PACIFIC TRANSFORMER MARKETS ......................................................................................................................89

REGIONAL OVERVIEW .............................................................................................................................................89

Investment as a % of GDP .......................................................................................................................................92

CHINA ......................................................................................................................................................................94



UHV AC and HVDC transformer markets in China ..................................................................................................94

Chinese suppliers and foreign suppliers .................................................................................................................96

UHV market participants.........................................................................................................................................97

International firms in China’s UHV Market .............................................................................................................98

Power and distribution transformers ≥ 220 kV ≤ UHV ...........................................................................................99

Power and distribution transformers ≤ 220 kV.......................................................................................................99

Distribution transformers for MV and LV distribution............................................................................................100

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Market drivers .........................................................................................................................................................100

MEPS Standards ......................................................................................................................................................101

The structure of the Chinese power sector ............................................................................................................101

Manufacturing industry review ..............................................................................................................................103

JAPAN ......................................................................................................................................................................106



Market drivers .........................................................................................................................................................106

MEPS Standards ......................................................................................................................................................107


Overseas production ...............................................................................................................................................108

INDIA .......................................................................................................................................................................110



Electrification ..........................................................................................................................................................111

Market drivers .........................................................................................................................................................111

MEPS Standards ......................................................................................................................................................112

Manufacturing industry review ..............................................................................................................................112

Capacity and utilisation ...........................................................................................................................................112

INDONESIA ..............................................................................................................................................................116



Market drivers .........................................................................................................................................................116


KOREA .....................................................................................................................................................................118



Market drivers .........................................................................................................................................................118


TAIWAN ...................................................................................................................................................................120



Market drivers .........................................................................................................................................................120


THAILAND ................................................................................................................................................................122



Market drivers .........................................................................................................................................................122


8.LAC TRANSFORMER MARKETS .....................................................................................................................................124

BRAZIL .....................................................................................................................................................................127


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Transformer stock .................................................................................................................................................. 127

Market drivers ........................................................................................................................................................ 127

Manufacturing industry review .............................................................................................................................. 128

MEXICO ................................................................................................................................................................... 129

Annual demand power and distribution transformers .......................................................................................... 129

Transformer stock .................................................................................................................................................. 129

Market drivers ........................................................................................................................................................ 129

MEPS Standards ..................................................................................................................................................... 129

Transformer manufacturers ................................................................................................................................... 130

9.THE VALUE CHAIN - FROM MATERIALS TO CAPEX ...................................................................................................... 131

The value chain at 6 levels ..................................................................................................................................... 131

Raw material inputs ............................................................................................................................................... 133

10.TRANSFORMER SALES AT RETAIL PRICE AND INSTALLED COST ................................................................................ 134

11.UTILITY, GSU & INDUSTRIAL POWER AND DISTRIBUTION TRANSFORMER INSTALLED CAPACITY, NUMBERS AND AVERAGE

DISTRIBUTION TRANSFORMER KVA PER UNIT ............................................................................................................... 135

12.NETWORK TRANSFORMER LAYOUT .......................................................................................................................... 147

THE TRANSFORMATION PROCESS .......................................................................................................................... 147

Stage 1 .................................................................................................................................................................... 147

Stage 2 .................................................................................................................................................................... 147

Stage 3 .................................................................................................................................................................... 147

Stage 4 .................................................................................................................................................................... 147

Network configurations for distribution - Radial, Loop and Network systems ...................................................... 148

Industry .................................................................................................................................................................. 149

Review of regional utility network practices - The link from medium voltage to low voltage .............................. 149

North America ........................................................................................................................................................ 150

Japan ...................................................................................................................................................................... 151

Europe .................................................................................................................................................................... 151

Types of transformer .............................................................................................................................................. 152

Liquid dielectric transformers ................................................................................................................................ 153

Dry-type transformers ............................................................................................................................................ 154

Gas filled transformers ........................................................................................................................................... 154

Evolution of power transformers by size and capacity .......................................................................................... 154

Ownership of power and distribution transformers .............................................................................................. 155

Ownership of GSU transformers ............................................................................................................................ 155

13.THE LONG-TERM DEMAND CYCLE 1900-2050 .......................................................................................................... 157

INSTALLED CAPACITY .............................................................................................................................................. 157

INSTALLED CAPACITY VERSUS DEMAND ................................................................................................................ 157

The China Factor..................................................................................................................................................... 160

14.TRANSFORMER: GENERATOR RATIOS - MVA: MW ................................................................................................... 163

15.SMART TRANSFORMERS ........................................................................................................................................... 171

What are smart transformers? ............................................................................................................................... 171

Smart transformers and the smart grid ................................................................................................................. 171

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16.N-1 STANDARD, N-2 AND 2N, REDUNDANCY AND REPLACEMENT ...........................................................................174

Network failure .......................................................................................................................................................174

Transformer failure .................................................................................................................................................174

Industrial reliability .................................................................................................................................................174

Levels of redundancy ..............................................................................................................................................175

Network reliability ..................................................................................................................................................176

N-1 and the networks .............................................................................................................................................176

Reliability standards SAIFI and SAIDI ......................................................................................................................177

Electricity transmission ...........................................................................................................................................178

Large power transformers (LPTs) ............................................................................................................................178

Transformer/generator ratios and redundancy .....................................................................................................179

Generation ..............................................................................................................................................................179

Transmission ...........................................................................................................................................................179

Distribution .............................................................................................................................................................179

17.PRICE TRENDS AND FACTORS DRIVING TRANSFORMER PRICES ...............................................................................181

PPI - Producer Price Index .......................................................................................................................................181

USA ..........................................................................................................................................................................181

EU ............................................................................................................................................................................182

China .......................................................................................................................................................................183

Japan .......................................................................................................................................................................183

Korea .......................................................................................................................................................................184

Demand for transformers - market and industry trends ........................................................................................184

Production capacity ................................................................................................................................................184

Production capacity of raw materials .....................................................................................................................184

Production capacity of manufactured equipment ..................................................................................................185

Manufacturing input cost composition ..................................................................................................................185

Composition of manufacturing inputs ....................................................................................................................185

Input costs - raw materials......................................................................................................................................186

Metal consumption .................................................................................................................................................186

Steel ........................................................................................................................................................................186

Electrical Steel .........................................................................................................................................................186

The electrical steel market ......................................................................................................................................188

Electrical steel producers ........................................................................................................................................189

AK Steel ...................................................................................................................................................................189

Allegheny Ludlum....................................................................................................................................................189

Angang Steel ...........................................................................................................................................................190

ArcelorMittal ...........................................................................................................................................................190

China Steel Corporation ..........................................................................................................................................190

JFE Steel Corporation ..............................................................................................................................................190

Nippon Steel Corporation .......................................................................................................................................190

(NLMK) Metallurgic al Plant ....................................................................................................................................190

Pohang Iron and Steel (POSCO) ..............................................................................................................................191

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Shanghai Baosteel ................................................................................................................................................... 191

Stalprodukt S.A. ...................................................................................................................................................... 191

Tata Steel (Cogent Power Ltd.) ............................................................................................................................... 191

Thyssen Krupp Steel ................................................................................................................................................ 191

WCI Steel ................................................................................................................................................................. 192

Wuhan Iron and Steel (WISCO) ............................................................................................................................... 192

Copper and Aluminium ........................................................................................................................................... 192

Copper ..................................................................................................................................................................... 192

Aluminium ............................................................................................................................................................... 194

Transformer oil ....................................................................................................................................................... 194

Input costs – labour ................................................................................................................................................ 195

Input costs – energy ................................................................................................................................................ 197

18.THE POINT OF CONNECTION, CENTRAL AND DISTRIBUTED GENERATION AND VOLTAGE ....................................... 198

Trends in the generation mix .................................................................................................................................. 198

The impact of generation developments on transformation technology .............................................................. 198

Decentralised power ............................................................................................................................................... 201

Czech Republic ........................................................................................................................................................ 202

Germany ................................................................................................................................................................. 203

Italy ......................................................................................................................................................................... 205

Spain........................................................................................................................................................................ 206

19.MEPS - Minimum Energy Performance Standards .................................................................................................... 208

MEPS (Minimum Energy Performance Standards) ................................................................................................. 209

United States........................................................................................................................................................... 209

Canada .................................................................................................................................................................... 210

Brazil ....................................................................................................................................................................... 211

Mexico..................................................................................................................................................................... 211

European Union ...................................................................................................................................................... 211

Australia .................................................................................................................................................................. 212

Japan ....................................................................................................................................................................... 212

China ....................................................................................................................................................................... 213

Korea ....................................................................................................................................................................... 214

India ........................................................................................................................................................................ 214

20.ENERGY EFFICIENCY AND HIGH EFFICIENCY TRANSFORMERS - MEPS ...................................................................... 216

Development of a new technology - amorphous core transformers ..................................................................... 216

The market for AMTs .............................................................................................................................................. 217

Amorphous metal ribbon manufacturers ............................................................................................................... 217

Amorphous metal transformers - AMTs ................................................................................................................. 218

Japan ....................................................................................................................................................................... 218

China ....................................................................................................................................................................... 218

United States........................................................................................................................................................... 218

India ........................................................................................................................................................................ 219

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Taiwan .....................................................................................................................................................................219

Other .......................................................................................................................................................................220

HTS –high temperature superconductor transformers ..........................................................................................220

21.TRANSFORMER PRODUCTION CAPACITY ...................................................................................................................221

MANUFACTURING CAPACITY, GLOBAL AND BY REGION ........................................................................................221

Capacity utilisation ..................................................................................................................................................222

North America (United States, Canada) ..................................................................................................................222

Mexico .....................................................................................................................................................................223

Latin America (excluding Mexico) ...........................................................................................................................224

China .......................................................................................................................................................................224

India ........................................................................................................................................................................226

Korea .......................................................................................................................................................................227

Europe .....................................................................................................................................................................227

CIS ...........................................................................................................................................................................227

Africa .......................................................................................................................................................................227

Global balance of production capacity and demand ..............................................................................................228

22.GLOBAL MARKET SHARE POWER AND DISTRIBUTION TRANSFORMERS, VALUE, 2017 ............................................229

23.LOGISTICS ...................................................................................................................................................................230

Rail transport ..........................................................................................................................................................230

Road transport ........................................................................................................................................................232

Rear wheel drive .....................................................................................................................................................233

Clearance ................................................................................................................................................................235

Alternative solutions ...............................................................................................................................................236

24.ELECTRIFICATION .......................................................................................................................................................238

Sub-Saharan Africa ..................................................................................................................................................243

Asia ..........................................................................................................................................................................243

MENA ......................................................................................................................................................................243

Latin America ..........................................................................................................................................................243

Europe .....................................................................................................................................................................244

CIS ...........................................................................................................................................................................244

North America .........................................................................................................................................................244

The impact of electrification on the electrical supply industry ..............................................................................244

25.METHODOLOGY .........................................................................................................................................................246

Short term demand forecast...................................................................................................................................246

Long term demand cycle .........................................................................................................................................246

Demand cycles and the market ..............................................................................................................................247

StatPlan Energy Databases .....................................................................................................................................247

Transformation capacity .........................................................................................................................................248

Review of the transformer databases.....................................................................................................................250

1.Utility/industry ownership ...................................................................................................................................250

2.The proportion of GSU/transmission PTs ............................................................................................................251

3.Redundancy. ........................................................................................................................................................251

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Figures Figure 1: Annual growth of the transformer market in volume and value, 2017-2022 ...................... 35

Figure 2: The global transformer fleet 2012-2017, generator and transformer capacity ................... 37

Figure 3: The global transformer fleet by transformer type, 2012-2017 ............................................. 37

Figure 4: Ratio of distribution transformers to generating capacity, installed base 1960-2016 ....... 40

Figure 5: Utility investment in transmission and distribution, 1977 to 2015, nominal $ ................... 45

Figure 6: Imports of power transformers (Oil filled ≥ 10 MVA), into the United States from

Canada, Mexico and Korea 2000-2015, $ value ................................................................... 49

Figure 7: Market capitalisation of seleced European utilities ............................................................... 61

Figure 8: Investment as a % of GDP, selected countries and economic groupings, 1980-2020 ....... 93

Figure 9: Market shares for UHV AC and HVDC transformers in China ................................................ 98

Figure 10: Market shares of leading transformer manufacturers for SGCC’s HV, MV and LV tenders 99

Figure 11: Production, consumption and exports of distribution transformers in China, 2006-2017 100

Figure 12: Structure of the Chinese electric power industry ................................................................. 102

Figure 13: The UK Electrical Power Transmission and Distribution System......................................... 148

Figure 14: Evolution of transformers in voltage kV and capacity MVA ................................................. 155

Figure 15: Proportion of capacity (MVA) generator, utility and private industry ownership of power

and distribution transformers by region, 2016 .................................................................... 155

Figure 16: Installed capacity of power and distribution transformers, GVA, 1900-2050 ................... 157

Figure 17: Global installed transformation capacity and demand, GVA, 1900-2050 ......................... 158

Figure 18: The cycle of demand, new and replacement capacity, GVA, 1900-2050 .......................... 159

Figure 19: Global utility transformation capacity installed base by region, GVA, 1900-2050 ............ 160

Figure 20: Demand for power and distribution transformers, China and the World, GVA, 1900-2050 161

Figure 21: Regional variation in long term demand, 1900-2050 ......................................................... 162

Figure 22: Conventional grid with unidirectional power flow ................................................................ 172

Figure 23: Active distribution grid with intelligent transformer substations ......................................... 172

Figure 24: Power, distribution and specialty transformers Producer Price Index, USA, 1967-2017 .. 182

Figure 25: Europe Producer Price Index for industrial manufactures 2012 to Q2 - 2016 .................. 182

Figure 26: China Producer Price Index for industrial goods 2005-2015 ............................................. 183

Figure 27: Japan Producer Price Index for electrical machinery and equipment 1996-2016 ............ 183

Figure 28: Korea Producer Price Index for industrial goods 2012-2016 ............................................. 184

Figure 29: Costs of manufacturing an oil filled- transformer ................................................................ 185

Figure 30: Copper prices 2007-2017 ..................................................................................................... 193

Figure 31: Copper prices forecast to 2030, constant US$ .................................................................... 193

Figure 32: Aluminium prices forecast to 2030, constant US$ .............................................................. 194

Figure 33: Labour compensation cost, including direct pay, social insurance expenditures,

and labour-related taxes (US = 100). .................................................................................... 195

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Figure 34: Labour costs including wages and salaries, social insurance and labour-related taxes ... 195

Figure 35: Minimum wages in China in yuan per month 1995-2012 .................................................. 196

Figure 36: Wage inflation in China versus the US, India and Mexico, 2005-2012 .............................. 196

Figure 37: Global energy cost index (2010 = 100) ................................................................................ 197

Figure 38: Global generating capacity mix, 1990-2050 ........................................................................ 198

Figure 39: Global generating capacity mix by energy source, 1990-2050........................................... 199

Figure 40: Capacity and generation by each energy source as percent of total, 1990-2013 ............ 200

Figure 41: Capacity and generation by each energy source as percent of total, 1990-2013 ............ 201

Figure 42: Global market share power and distribution transformers, $ value, 2017 ........................ 229

Figure 43: Two Schnabel cars unloaded ................................................................................................ 231

Figure 44: Schnabel car with load........................................................................................................... 231

Figure 45: The largest load ever transported by road in the United Kingdom ..................................... 232

Figure 46: The trailer approaches a narrow turning in Scotland ........................................................... 234

Figure 47: The trailer’s rear wheels begin the turn in Scotland ............................................................ 234

Figure 48: The trailer is has turned the corner in Scotland ................................................................... 235

Figure 49: Overhead obstructions ........................................................................................................... 236

Figure 50: Transformer off the road ........................................................................................................ 237

Figure 51: Share of people without electricity access for developing countries, 2016 ....................... 238

Figure 52: World electrification - % of households with electricity, 1900-2050 .................................. 239

Figure 53: World electrification - number and % of households with electricity, 1900-2050 ............. 240

Figure 54: Selected major countries - % of households with electricity, 1900-2050 .......................... 241

Figure 55: Selected major countries - Number of households with electricity, 1900-2050 ............... 241

Figure 56: Regional totals of electrified households 2010-2050 ......................................................... 242

Figure 57: Additions of electrified households in each decade by region, 2010-2050 ...................... 243

Figure 58: Diagram of new plus total replacement capacity ................................................................. 247

17

Transformer Report

Table of Contents

Tables

Table 1: Power and distribution transformer demand, MVA and $ in real and nominal values .......... 35

Table 2: World transformer demand forecast, 2017-2022, MVA ......................................................... 36

Table 3: World transformer demand forecast at ex-factory cost, 2017-2022, $ nominal million ...... 36

Table 4: World transformer demand forecast, ....................................................................................... 36

Table 5: World transformer demand forecast at ex-factory cost, .......................................................... 36

Table 6: The global transformer fleet by transformer type, 2012-2017, ............................................. 38

Table 7: North America, total transformer sales forecast at ex-factory cost, 2017-2022, $ million .. 39

Table 8: North America, power and distribution transformer sales forecast, 2017-2022, MVA ........ 39

Table 9: North America, power transformer sales forecast, 2017-2022, MVA .................................... 39

Table 10: North America, distribution transformer sales forecast, 2017-2022, MVA ......................... 39

Table 11: US power and distribution transformer stock, 2017 ............................................................. 40

Table 12: Detailed shipment data for power and distribution transformers in the US, 2009 ............ 41

Table 13: Market shares of Power Transformer Producers in the United States, 2015 ..................... 46

Table 14: Europe, total transformer sales forecast at ex-factory cost, 2017-2022, $ million ........... 54

Table 15: Europe, total transformer sales, 2017-2022, MVA ............................................................... 55

Table 16: Europe, power transformer sales, 2017-2022, MVA ............................................................ 56

Table 17: Europe, distribution transformer sales, 2017-2022, MVA ................................................... 57

Table 18: French power and distribution transformer stock, 2017 ...................................................... 65

Table 19: German power and distribution transformer stock, 2017 .................................................... 68

Table 20: Italian power and distribution transformer stock, 2017 ....................................................... 71

Table 21: Spanish power and distribution transformer stock, 2017 .................................................... 72

Table 22: UK power and distribution transformer stock, 2017 ............................................................ 73

Table 23: Turkish power and distribution transformer stock, 2017 ..................................................... 75

Table 24: CIS, total transformer sales forecast at ex-factory cost, 2017-2022, $ nominal million .... 77

Table 25: CIS, total transformer sales, 2017-2022, MVA ..................................................................... 77

Table 26: CIS, power transformer sales, 2017-2022, MVA .................................................................. 77

Table 27: CIS distribution transformer sales, 2017-2022, MVA ........................................................... 77

Table 28: Russian power and distribution transformer stock, 2017 .................................................... 78

Table 29: MENA, total transformer sales forecast at ex-factory cost, 2017-2022, $ million .............. 81

Table 30: MENA, total transformer sales, 2017-2022, MVA ................................................................. 82

Table 31: MENA, power transformer sales, 2017-2022, MVA .............................................................. 83

Table 32: MENA, distribution transformer sales, 2017-2022, MVA ..................................................... 83

Table 33: Iranian power and distribution transformer stock, 2017...................................................... 84

Table 34: Saudi Arabian power and distribution transformer stock, 2017 .......................................... 86

Table 35: UAE power and distribution transformer stock, 2017........................................................... 88

Table 36: Asia Pacific, total transformer sales forecast at ex-factory cost, 2017-2022, $ million ..... 89

18

Transformer Report

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Table 37: Asia Pacific, total transformer sales, 2017-2022, MVA ........................................................ 90

Table 38: Asia Pacific, power transformer sales, 2017-2022, MVA ..................................................... 91

Table 39: Asia Pacific, distribution total transformer sales, 2017-2022, MVA .................................... 92

Table 40: Chinese power and distribution transformer stock, 2017 .................................................... 94

Table 41: The operational UHV circuits in China in 2017...................................................................... 95

Table 42: UHV circuits under construction in China in 2017 ................................................................ 96

Table 43: Key Technologies for UHV AC systems ................................................................................... 98

Table 44: Key technologies for UVH DC systems ................................................................................... 99

Table 45: Japanese power and distribution transformer stock, 2017 ................................................. 106

Table 46: Transformer manufacturers in Japan ..................................................................................... 108

Table 47: Indian power and distribution transformer stock, 2017 ....................................................... 110

Table 48: Indian transformer production capacity GVA ......................................................................... 113

Table 49: Transformer manufacturers in India ...................................................................................... 115

Table 50: Indonesian power and distribution transformer stock, 2017 ............................................... 116

Table 51: Korean power and distribution transformer stock, 2017 ..................................................... 118

Table 52: Taiwanese power and distribution transformer stock, 2017 ............................................... 120

Table 53: Korean power and distribution transformer stock, 2017 ..................................................... 122

Table 54: LAC, total transformer sales forecast at ex-factory cost, 2017-2022, $ nominal million ... 124

Table 55: LAC, total transformer sales, 2017-2022, MVA .................................................................... 125

Table 56: LAC, power transformer sales, 2017-2022, MVA .................................................................. 125

Table 57: LAC, distribution transformer sales, 2017-2022, MVA ......................................................... 126

Table 58: Brazilian power and distribution transformer stock, 2017 ................................................... 127

Table 59: Mexican power and distribution transformer stock, 2017 ................................................... 129

Table 60: Costs and mark-up from Bill of Materials to Capex ............................................................... 132

Table 61: Transformer demand at ex-factory and installed cost by region, 2017-2022, $ million .... 134

Table 62: Generator, Utility and Industrial Power and Distribution transformer capacity (MVA)

by country and ownership, World, 2017 ................................................................................ 135

Table 63: Number and average capacity in kVA of Distribution transformers by country and

ownership, World, 2017 ......................................................................................................... 135


by country and ownership, North America, 2017 .................................................................. 135

Table 65: Number and average capacity in kVA of Distribution transformers by

country and ownership North America, 2017 ....................................................................... 135


by country and ownership, Europe, 2017 .............................................................................. 136

Table 67: Number and average capacity in kVA of distribution transformers by country and

ownership, Europe, 2017 ....................................................................................................... 137

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Transformer Report

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by country and ownership, CIS, 2017 ...................................................................................... 138

Table 69: Number and average capacity in kVA of distribution transformers by country

and ownership, CIS, 2017 ....................................................................................................... 138

Table 70: Generator, Utility and Industrial Power and Distribution transformer capacity (MVA) by

country and ownership, Middle East and North Africa, 2017 ............................................... 139


ownership, Middle East and North Africa, 2017 .................................................................... 140

Table 72: Generator, Utility and Industrial Power and Distribution transformer capacity

(MVA) by country and ownership, Asia Pacific, 2017 ............................................................ 141


ownership, Asia Pacific, 2017................................................................................................. 142


by country and ownership, Sub-Saharan Africa, 2017 .......................................................... 143


and ownership Africa, 2017 .................................................................................................... 144


by country and ownership, LAC, 2017 .................................................................................... 145


ownership, LAC, 2017 ............................................................................................................. 146

Table 78: Average numbers of household consumers per DT ............................................................... 149

Table 79: Number of LV consumers, number of distribution transformers and

average LV customers per transformer in selected countries, 2014 ................................... 152

Table 80: Ratios of transformation capacity (MVA) to generating capacity (MW), World, 2017 ......... 163

Table 81: Ratios of transformation capacity (MVA) to generating capacity (MW), Europe, 2017 ....... 164

Table 82: Ratios of transformation capacity (MVA) to generating capacity (MW), CIS, 2017 ............. 165

Table 83: Ratios of transformation capacity (MVA) to generating capacity (MW), Middle East

and North Africa, 2017 ............................................................................................................ 166

Table 84: Ratios of transformation capacity (MVA) to generating capacity (MW), S-S Africa, 2017 ... 167

Table 85: Ratios of transformation capacity (MVA) to generating capacity (MW),

Asia Pacific, 2017 .................................................................................................................... 169


North America, 2017 ............................................................................................................... 170


Latin America, 2017 ................................................................................................................ 170

Table 88: Electrical steel producers by country and production ........................................................... 189

Table 89: Voltage level of for connection to the grid, German rules ..................................................... 202

Table 90: Grid voltage connection by installation size for solar PV in Czech Republic, 2012 ............. 203

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Transformer Report

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Table 91: Grid voltage connection by installation size for solar PV in Germany, 2012 ....................... 203

Table 92: Grid voltage connection by installation size for solar PV in Italy, 2012 ............................... 205

Table 93: Grid voltage connection by installation size for solar PV in Spain, 2012 ............................. 206

Table 94: Network losses by region ........................................................................................................ 208

Table 95: Manufacturers of energy efficient transformers in China, 2013 .......................................... 219

Table 96: World production capacity for transformers, GVA, 2017 ...................................................... 221

Table 97: Global production capacity power and distribution transformers, GVA, 2017 .................... 222

Table 98: China, domestic production capacity power and distribution transformers, GVA, 2017 .... 225

Table 99: India, production capacity power and distribution transformers, GVA, 2007-2016 ........... 226

Table 100: CIS, production capacity power and distribution transformers, GVA ................................. 227

Table 101: Population and electrical parameters of South Asia and Sub-Saharan Africa .................. 244

Transformer Report Sample Tables

21

Table 1: Power and distribution transformer demand, MVA and $ in real and nominal values

2017 2018 2019 2020 2021 2022 cagr

Value Nominal $ million

Value real $ million

Total MVA

$/MVA nominal

$/MVA real

Table 2: World transformer demand forecast, 2017-2022, MVA

All transformers 2017 2018 2019 2020 2021 2022 cagr

World

World exc. China

Table 3: World transformer demand forecast at ex-factory cost, 2017-2022, $ nominal million


World

World exc. China

Table 4: World transformer demand forecast,

GSU/PT transmission/DT distribution, 2017-2022, MVA

Generator transformers 2017 2018 2019 2020 2021 2022 % share

Generator transformers

Power network transformers

Distribution network transformers

Total

Table 5: World transformer demand forecast at ex-factory cost,

GSU/PT transmission/DT distribution, 2017-2022, $ nominal million

Generator transformers 2017 2018 2019 2020 2021 2022 % share

Generator transformers

Power network transformers

Distribution network transformers

Total


22

Table 6: The global transformer fleet by transformer type, 2012 to 2017,

generator and transformer capacity

Gen cap PT GSU PT Utility PT Industry

DT GSU DT Utility DT Industry

Total transformers

MW GVA GVA GVA GVA GVA GVA GVA

Ed 6 2017

Ed 5 2016

Ed 4 2015

Ed 3 2014

Ed 2 2013

Ed 1 2012

Table 7: North America, total transformer sales forecast at ex-factory cost, 2017-2022, $ nominal

million


USA

Canada

North America

Table 8: North America, power and distribution transformer sales forecast, 2017-2022, MVA capacity

All transformers 2017 2018 2019 2020 2021 2022

USA

Canada

North America

Table 9: North America, power transformer sales forecast, 2017-2022, MVA capacity


USA

Canada

North America

Table 10: North America, distribution transformer sales forecast, 2017-2022, MVA capacity


USA

Canada

North America

❖ Tables 7-10, similar tables are included for all countries


23

Table 11: US power and distribution transformer stock, 2017

MVA Number

PTs GSU

Utility

Industry

Total PTs

DTs GSU

Utility

Industry

Total DTs

PTs + DTs

❖ Table 11, similar tables are included for all countries

Table 12: Market shares of Power Transformer Producers in the United States

LPTs >345 kV Large power Medium power Low power

≥ 100 MVA 10-100 MVA 1-10 MVA

% % %

ABB

Siemens

GE Prolec

Hyundai

Efacec

PTTI

Indusrias IEM

WEG

HHI

Hyosung

Compton

Greaves/Pauwels

SPX (formerly Waukesha)

VTC

Kuhlman

Mitsubishi

PA Transformers

Alstom

Delta Star

Schneider (Sq D)

Howard

Niagara Trans.

Federal Pacific


24

Table 13: Europe, total transformer sales forecast at ex-factory cost, 2017-2022, $ nominal million


Albania

Austria

Belgium

Bulgaria

Croatia

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Luxembourg

Netherlands

Norway

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

UK

Rest of Europe

Europe


25

Table 14: Europe, total transformer sales, 2017-2022, MVA


Albania

Austria

Belgium

Bulgaria

Croatia

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Luxembourg

Netherlands

Norway

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

UK

Rest of Europe

Europe


26

Table 15: Europe, power transformer sales, 2017-2022, MVA


Albania

Austria

Belgium

Bulgaria

Croatia

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Luxembourg

Netherlands

Norway

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

UK

Rest of Europe

Europe


27

Table 16: Europe, distribution transformer sales, 2017-2022, MVA


Albania

Austria

Belgium

Bulgaria

Croatia

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Luxembourg

Netherlands

Norway

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

UK

Rest of Europe

Europe

❖ Tables 14 to 17, similar tables are included for all countries


28

Table 17: Indian transformer production capacity GVA

2007 2009 2016

ABB

Alstom T&D India

Crompton Greaves

Siemens

TBEA

BHEL

TRIL

Bharat Bijlee

Emco

Indo Tech Transformer

Voltamp

Schneider Electric

Vijay Electrical

Total organised

Unorganised

Total industry capacity


29

Table 18: Generator, Utility and Industrial Power and Distribution transformer capacity (MVA) by

country and ownership, Europe, 2017

Power transformer capacity Distribution transformer capacity All trf

capacity

GSU Utility Industry Total PTs GSU Utility Industry Total DTs PTs + DTs

MVA MVA MVA MVA MVA MVA MVA MVA MVA

Albania

Austria

Belgium

Bosnia Herze.

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Italy

Latvia

Lithuania

Luxembourg

Macedonia

Malta

Netherlands

Norway

Poland

Portugal

Romania

Serbia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

UK

Europe


30


and ownership, Europe, 2017

Distribution transformers Average capacity per transformers Utility Industry Total Utility Industry Total Number Number Number kVA/trf kVA/trf kVA/trf

Albania

Austria

Belgium

Bosnia Herze.

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Iceland

Ireland

Italy

Latvia

Lithuania

Luxembourg

Macedonia

Malta

Netherlands

Norway

Poland

Portugal

Romania

Serbia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

UK

Europe

❖ Tables 66 to 67, similar tables are included for all countries


31

Table 20: Ratios of transformation capacity (MVA) to generating capacity (MW), Asia

Pacific, 2017 Installed capacity Ratio of transformers to generation

capacity

Gen cap GSU Trfs PT DT All Trfs GSU Trf PT DT Total

MW MVA MVA MVA MVA MVA/

MW

MVA/

MW

MVA/

MW

MVA/

MW

Australia

Bangladesh

Bhutan

Brunei

Cambodia

China

Fiji

Hong Kong

Korea South

Japan

India

Indonesia

Laos

Macau

Malaysia

Mongolia

Myanmar

Nepal

New Zealand

Pakistan

Papua New Guinea

Philippines

Singapore

Sri Lanka

Taiwan

Thailand

Vietnam

Rest of Asia Pacific

Asia Pacific

❖ Tables 85, similar tables are included for all countries

Transformer Report Sample Pages

32

1. THE POWER AND DISTRIBUTION TRANSFORMER

MARKET

Total demand for power and distribution transformers in 2017 is estimated at XXX GVA, rising by a cagr of

XX% to XXX GVA in 2022. The value in 2017 is $XX billion at ex-factory cost, increasing in nominal values

by a cagr of XX% to $XX billion in 2022.

Growth in nominal terms will be fastest in India at XX% and China at XX%, followed by the Middle East at

XX% and Africa at XX%, LAC XX%. The CIS will follow with XX%, North America with XX%, and Europe with

XX%. The high Indian growth is due to a combination of a spurt of investment and high predicted inflation.

Over the five-year period power transformers will achieve capacity growth of XX% a year and distribution

transformers XX%.

The value per MVA will increase by a cagr of XX% in real terms up to 2022 and $XX% in nominal terms.

Table 1: Power and distribution transformer demand, MVA and $ in real and nominal values

2016 2017 2018 2019 2020 2021 cagr

Value Nominal $ million

Value real $ million

Total MVA

$/MVA nominal

$/MVA real

With surplus production capacity and falling metal prices, transformer prices…………………………………….


33

NORTH AMERICAN TRANSFORMER MARKET

MARKET REVIEW

The United States market for power and distribution transformers is predicted to grow at a cagr of XX% in

nominal value from $XX billion in 2017 to $XX billion in 2022. Demand for power transformers will remain

strong because of the need for modernisation and replacement of aging assets. Distribution transformer

demand will be healthy with an increasing population and the construction market on a path of sustainable

growth.

Consumption of transformers in the United States has fluctuated over the last 30 years and has not risen

constantly. Notably, the figures for 2009 were depressed as was the case in most countries, due to the

financial crisis. In volume terms demand has risen since then but in value growth has been held back by

declining commodity prices and excess production capacity around the world.

Transformer stock

There are plentiful statistics about distribution transformers in the United States, including historical tables

which enable us to plot the development of the distribution transformer stock over time in numbers and

capacity and so to chart the development of transformers in size. There is a lack of information for power

transformers.

Table 2: US power and distribution transformer stock, 2017

MVA Number

PTs

DTs

Sources: DOE, various reports, StatPlan estimates

There are over XXXXX generators and XXXXXX power transformers in the United States.


34

THE VALUE CHAIN - FROM MATERIALS TO CAPEX

The cost of any product such as transformers or switchgear can be measured in a number of ways, from

being a piece of unworked metal, to its final installation in working order and finally as a constituent of

capital expenditure. Different price levels are important in this supply chain, and the point of interest in

the chain depends on the business to which the value is being applied. The value chain starts with the

input of raw materials, such as cold rolled steel, GOES, copper, aluminium etc. These inputs typically

constitute from 60-80% of the manufacturing cost of a finished product.

The value chain at 6 levels

1. BOM, bill of materials - Metal producers and refiners are concerned about the prices they can get for

their output in its basic form, ingots, rods, plates etc. For the equipment manufacturers this price

translates into the BOM (bill of materials) as a cost of production.

2. Manufactured cost - Adding the cost of fabricating the materials into finished products produces the

manufactured cost.

3. Factory gate price (MSP) - The addition of non-manufacturing costs such as sales and finance costs

brings it up to the factory gate price or manufacturer’s selling price. This does not include any transport

cost. (Note: factory gate price is sometimes quoted with manufacturer’s profit and sometimes not.)

4. Buyer’s price (equivalent to RSP) - Products such as electrical equipment is almost always sold with

a multi-channel strategy. Power and distribution transformers are a good example; there are usually

two sales channels. Power and large distribution transformers are bespoke items, each one

manufactured to a unique design for a unique purpose. They

……………………………………………………………………………………………...


35

CHINA

Annual demand power and distribution transformers

In 2017, sales of power transformers amounted to XXX GVA and distribution transformers XXX GVA.

Annual expenditure on power and distribution transformers in China is estimated at $XX billion in 2017,

rising at a nominal cagr of XX% to $XX billion in 2022.

Transformer stock

Table 3: Chinese power and distribution transformer stock, 2017

MVA Number

PTs GSU

Utility

Industry

Total PTs

DTs GSU

Utility

Industry

Total DTs

PTs + DTs

Sources: Electricity Council, SGCC, StatPlan estimates

XX% of transformers are purchased by utilities and generators and XX% by industry. China has

strengthened super-high and ultra-high voltage power grid construction in recent years, but ≥ 500 kV

power transformers only occupy a small share in the power transformer market, while ≤ 220 kV power

transformers are dominant. The transmission voltages start at 35 kV and over in China, although a small

amount of distribution is at 35 kV. The average capacity of distribution transformers in China is 200 kVA

and.

UHV AC and HVDC transformer markets in China

UHV AC and UHV DC transmission voltages in China are 1,000 kV AC and 800 kV DC, respectively. UHV AC

and DC has been pioneered and lines built in Russia and the CIS, Japan, USA, Italy, Canada, Brazil, China

and other countries. A comprehensive review in 2009 of UHV AC and DC development in China and other

countries, concluded that, although UHV transmission was technically feasible, there was no transmission

system at the voltages of 1,000 kV AC in operation. 800 kV DC and above were being operated.

At a time of rapid economic development there is an imbalance in the geographical distribution of

Chinese energy resources and loads. More than ⅔ of the coal resources are in the North and North West

of China and more than ¾ of the exploitable hydro capacity in the South West, including Sichuan, Yunnan

and Tibet. However, more than ⅔ of energy demand is in the relatively developed Central and Eastern

regions, and the important energy generating bases are all 800–3,000 km from the load centres. This

means that there ………………………….


36

4. THE LONG-TERM DEMAND CYCLE 1900-2050

INSTALLED CAPACITY

Global installed transformer capacity has risen every year throughout the last and current centuries,

from XXX GVA in 1900 to XXXX GVA in 2017. The growth has been linear and it will continue as such until

it……………………….

Growth of installed transformer capacity is linear, but demand for equipment is cyclical.

Figure 1: Global installed transformation capacity and demand 1900 - 2050, GVA


37

16. PRICE TRENDS AND FACTORS DRIVING

TRANSFORMER PRICES

The prices of electrical equipment have been volatile over the years and will continue to be so. Many

factors contribute to this. The principal factors influencing transformer prices are:

1. Demand for transformers, market and industry trends,

2. Production capacity,

3. Input prices of;

• raw materials

• energy

• labour

4. The economic and financial climate.

These factors interact on each other; e.g. demand drives up input costs, which drive up the prices of

finished goods, which can eventually depress demand. Each of these factors is reviewed in this chapter.

We predict that demand for transformers will

transformer report ed 6 2018 - statplan energy research · chapter contains a separate report on...

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