Technology changes, growing electricity demand, emission concerns, and supportive policies are spurring grid development projects globally. After all, electricity consumption and economic growth are strongly connected, with secure and sustained electricity supply highlighting strong business performance at the nation-state level.
Worldwide, government entities are working to achieve favorable market conditions for improving electrification rates and grid expansion while supporting the power sector transition.
Several smart grid initiatives aim to support global distribution transformer market growth. According to a recent report released by GlobalData, the market for national electricity grids is expected to grow globally at a compound annual growth rate of 1.6 percent by 2022, reaching $14.33 billion. Renewable energy sources are playing an important role in the final energy mix worldwide, leading to the incorporation of grid assets that provide flexibility without compromising reliability.
With its robust economy, increasing population, and the drive to become a global manufacturing hub and leader, China is a rising power in the global distribution transformer market. Reviving its industrial sector, ramping up electrification, and large-scale deployment of generating capacity contribute to China becoming the largest power market in the world. However, large generation capacities development far outpaced power transmission and distribution capacity development, which resulted in severe economic losses due to curtailment and grid congestion. In recent development plans, the Chinese government proposed significant investments toward addressing the deficit in grid capacities. The strong industrial base and rural electrification objective would drive the market from 2019-2022, reaching $3.83 billion in 2022.
The United States is the second largest market for distribution transformers, expected to hold 18.3 percent of the market value in 2022. Although an early pioneer of the electric grid, the U.S. grid is showing signs of aging and, in some instances, is in need of replacement. Policy development and a strong research base have contributed to the propagation of renewable and other distributed generation technologies across the grid. The market is expected to grow at a compound annual growth rate of 2 percent to reach a market value of $2.6 billion in 2022.
Steadily progressing in developing one of the largest smart grid infrastructure and smart cities markets in both Latin America and among emerging market countries, Mexico is driven by regulatory incentives, as well as business case benefits. Recent reforms have expanded the number of small-scale generators in the electricity market, meaning that Mexico will need a more flexible and resilient grid. Fortunately, although Mexico’s new president, Andres Manuel Lopez Obrador, has been critical of many recent energy reforms that have been crucial in driving smart grid development, the overall goals of the country’s smart grid infrastructure align with the new administration’s interests and no changes are expected. In fact, increased appetite for infrastructure investment could lead to financing for more ambitious smart city projects, which are only just getting started in Mexico. While details of a national rollout have failed to emerge, investment plans have been increased in recent years, setting the stage for large-scale investment in the 2020s.
The Future Starts with the Smart Grid
The development and implementation of smart grid technology will drive electrical engineering into the future. Modernizing the Smart Grid is a four-course program coming soon from IEEE, designed to get you and your team up-to-date quickly on the latest smart grid technologies. Course titles in this program include Strong Grid Before Smart Grid, Smart Distribution Systems, the Digitized Grid, and Engaging Consumers in the Smart Grid marketplace.
Contact an IEEE Content Specialist today to learn more.
(25 Jan 2019). Expect electricity grid development to grow globally at 1.6% by 2022. Power-technology.com.
(31 Jan 2019). Mexico Smart Grid and Smart Cities Market Forecast Report 2018-2027 – ResearchAndMarkets.com. AP News.
Global Distribution Transformer Market Forecast 2018-2026. Inkwood Research.