Transformer Monitoring Market

[233 Pages Report] The Transformer Monitoring market is expected to grow from an estimated USD 2.4 billion in 2023 to USD 3.7 billion by 2028, at a CAGR of 9.1% during the forecast period. The transformer monitoring market is expanding as a result of rising need for dependable power supply, increased adoption of smart grid technologies, increased awareness of transformer aging, and developments in sensor technology. Transformer monitoring systems are critical for assuring power grid stability and dependability. They can aid in the detection and prevention of transformer failures, which can result in costly outages. As the need for power grows, so will the demand for transformer monitoring systems.

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Transformer Monitoring market Dynamics

Driver: Digitalization of utilities are promoting use of power transformers

Power utilities are investing in process automation along with digitalizing the monitoring and controlling of the processes. Power utilities require a huge number of sensors and data handling solutions to manage and use the acquired data intelligently. As power companies extend their electrical grids to satisfy the expanding energy demands of residential, commercial, and industrial users, they require more transformers to efficiently distribute electricity. Power utilities are also investing in grid modernization activities to improve reliability and resilience. This includes replacing obsolete transformers and improving aging infrastructure.

According to IEA’s article, several countries and regions have had recently put forward strategies and action plans to facilitate the digital transformation of their energy systems, while others are beginning to mandate the use of digital technologies to support clean energy transitions.

Transformer monitoring system/solutions play a key role in network monitoring for transmission and distribution utilities while at the generation end. Monitoring generation transformers becomes critical before feeding the electricity to the grid. Collaborations with third-party vendors and service providers are common in the digitalization of the power sector. Thus, digitalization of the utilities is likely to boost the demand for transformer monitoring systems.

Restraints: Cost barrier is hindering the growth of power transformers

The cost barrier is a multidimensional impediment to broad adoption of power transformer monitoring devices. The significant upfront expenditure necessary for hardware, software, and installation can initially deter utilities and organizations particularly those with limited budgets. The continuing maintenance and calibration costs associated with complicated monitoring systems compound this budgetary limitation, raising the total cost of ownership. Retrofitting older transformers with monitoring equipment adds another financial barrier, frequently needing costly upgrades or replacements that organizations may find difficult to pay. The cumulative cost of establishing monitoring systems across all units can become a considerable hurdle for large-scale utilities or enterprises controlling several transformers.

Further, raw material costs, such as copper and steel, have a direct impact on transformer prices. Price fluctuations in these important components can cause cost uncertainty for both manufacturers and purchasers. Furthermore, the development of environmentally friendly and energy-efficient transformers, driven by severe laws, frequently necessitates the use of new technologies and materials, which can raise production costs even further. To overcome these cost barriers, innovative financing solutions, government incentives, and industry collaboration are required to drive down costs and make power transformers more accessible, especially considering rising electricity demand and the need for a resilient and sustainable power grid.

Opportunity: Growth of big data analytic

Big data analytics is driving demand for power transformers, and its influence on the energy sector is significant. Foremost, big data analytics enable utilities to optimize their power systems by gathering and analysing massive amounts of real-time data on electricity demand and supply. This data-driven strategy enables more efficient grid operations and increases overall system efficiency. To fulfil the demands of this data-driven era, utilities frequently require contemporary power transformers that can adjust to varying loads and interact easily with data analytics systems.

Big data analytics can provide predictive maintenance for power transformers. Analytics can detect possible difficulties and failures in transformers before they become significant by scrutinizing previous data and performance trends. This preventive maintenance strategy not only minimizes downtime but also increases transformer lifespan, making them more cost-effective for utilities in the long term. For instance, in June 2020, HPE launched HPE Ezmeral, which is a new software portfolio and brand that will accelerate data-driven transformation across organizations. HPE Ezmeral provides a complete portfolio, including container orchestration and management, AI/ML and data analytics, cost control, IT automation and AI-driven operations, and security. Similarly in 2020 ABB’s fully functional Ability Power Transformer was launched that provides with integrated solution for digitally enabled power transformers, fundamentally changing the transformer paradigm.

In addition, the energy efficiency landscape is evolving with the help of data analytics. These tools can pinpoint opportunities for energy savings by optimizing transformer operations. This increased focus on energy efficiency is spurring the adoption of more advanced and efficient transformers that align with sustainability goals, ensuring that power distribution systems are both reliable and environmentally responsible. As renewable energy sources like wind and solar power continue to grow, utilities are challenged with managing variable and intermittent power generation. Big data analytics come to the rescue by forecasting renewable energy output and facilitating the necessary adjustments to grid infrastructure. This often requires the integration of new and innovative transformers capable of handling the dynamics of renewable energy integration. Moreover, the rise of big data analytics is altering the energy sector in a variety of ways, having a direct impact on demand for power transformers. These transformers are critical for assuring power grid adaptability, efficiency, and reliability as they change to meet the challenges and opportunities posed by data analytics-driven energy systems.

Challenges: Acceptance level among end users

Acceptance of power transformer monitoring systems faces several obstacles when it comes to end users. Traditional and well-established industries may exhibit resistance to change, as they are accustomed to their existing practices and may be hesitant to adopt new technologies. The perceived complexity of monitoring systems can be a deterrent, with concerns over specialized knowledge requirements and potential disruptions to current operations. Moreover, data privacy and security issues can cast a shadow of doubt, as end users worry about the risk of data breaches and unauthorized access to sensitive information. Additionally, the initial costs of hardware, software, and installation pose a financial barrier, especially for organizations operating with limited budgets. The necessity for additional training and education to effectively operate monitoring technology can contribute to hesitancy among end users, who may fear the resource investment required for workforce proficiency. Furthermore, a lack of awareness about the benefits of power transformer monitoring can hinder acceptance, as some end users may not fully grasp how these systems can enhance their operations.

Additionally, incentivizing the adoption of monitoring systems through subsidies or financial mechanisms can make it more attractive, particularly for those concerned about the initial costs. Overall, raising awareness and education about the benefits of power transformer monitoring is pivotal in encouraging acceptance among end users and driving the adoption of this transformative technology.

Transformer Monitoring Market Ecosystem

Notable players in this industry comprise long-standing, financially robust manufacturers of Market and related components. These companies have a significant track record in the market, offering a wide range of products, employing cutting-edge technologies, and maintaining robust global sales and marketing networks. Prominent companies in this market include GE (US), ABB (Switzerland), Siemens Energy AG (Germany), Schneider Electric (France), and Eaton (Ireland).

Cast-resin, is expected to be the second-largest market, based on type.

Cast resin transformers are the second largest section of the transformer monitoring system market for numerous reasons. For instance, cast resin transformers are more fire-resistant than liquid-filled transformers, making them a safer choice for usage in high-risk areas. Second, because they do not contain any harmful substances, cast resin transformers are more environmentally friendly. Third, compared to liquid-filled transformers, cast resin transformers are more compact and lighter, making them easier to install and carry. Finally, because cast resin transformers do not need to be replenished with oil on a regular basis, they require less maintenance than liquid-filled transformers.

Software solutions, by component, to hold the fastest market share during the forecast period.

The software solutions segment is the fastest growing segment of the transformer monitoring market because it offers various advantages over hardware solutions. Software solutions are more adaptable and scalable, and they can be tailored to each utility's unique requirements. Furthermore, software solutions are less expensive to deploy and maintain than hardware ones. Furthermore, software solutions offer more functionality than hardware solutions, such as real-time data visualization, analytics, and reporting. These characteristics assist utilities better understand the health and performance of their transformers, allowing them to identify and rectify problems before they create outages.

Asia Pacific is expected to be the fastest market during the forecast period.

The region's rapid urbanization and industrialization, coupled with massive technological advancements is making Asia Pacific the fastest growing region for transformer monitoring. China is Asia Pacific’s largest and fastest growing market, owing to the country’s massive renewable energy projects and vast manufacturing potential. Transformers become increasingly prone to failure as they age. Transformer monitoring system can aid in the detection and prevention of these problems, which can result in costly outages. In Asia Pacific, the growing reliance on renewable energy sources is also pushing the market for transformer monitoring systems, as renewable energy sources, are erratic and might cause price volatility.

Key Market Players

The market is dominated by a few major players that have a wide regional presence. The major players in the Transformer Monitoring market are GE (US), ABB (Switzerland), Siemens Energy AG (Germany), Schneider Electric (France), and Eaton (Ireland). Between 2019 and 2023, Strategies such as product launches, contracts, agreements, partnerships, collaborations, alliances, acquisitions, and expansions are followed by these companies to capture a larger share of the market.

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Scope of the Report

This research report categorizes the market by component, type, services, voltage, application, and region

On the basis of component, the Transformer Monitoring market has been segmented as follows:

• Hardware Solutions
• Software Solutions

On the basis of type, the Transformer Monitoring System market has been segmented as follows:

• Oil-immersed
• Cast-resin
• Others

On the basis of by services, the Transformer Monitoring market has been segmented as follows:

• Oil monitoring
• Bushing monitoring
• Partial discharge monitoring
• OLTC monitoring
• Others

On the basis of by voltage, the Transformer Monitoring System market has been segmented as follows:

• Low voltage
• Medium voltage
• High & Extra High voltage

On the basis of by application, the Transformer Monitoring market has been segmented as follows:

• Distribution transformers
• Power transformers
• Others

On the basis of region, the Transformer Monitoring market has been segmented as follows:

• Asia Pacific
• Europe
• North America
• Middle East & Africa
• South America

Recent Developments

• In October 2023, Eaton invested USD 85 million to increase the manufacturing of utility solutions to advance energy transitions and electrifications. These investments in regional manufacturing increases the supplies for transformers, regulators, switchgears, and their utility equipment. These investments would help the manufacturers to integrate condition monitoring in their transformers.
• In September 2023, Schneider Electric has invested USD 300 million to establish an electrical equipment manufacturing plant in El Paso, Texas, US. This expansion will help Schneider Electric to manufacture monitoring devices for transformers and other electrical appliances.
• In October 2022, Schneider Electric had offered a solution that extends transformer lifetime. By incorporating digital transformation through the implementation of IoT sensors and expert analysis, Schneider Electric monitor’s transformer insulation health. The EcoStruxture Transformer Expert is an affordable and accurate transformer monitoring, also has the ability to offer automated insights.

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