Gas-Insulated Transformer Market Size, Share & Trends Analysis Report By Voltage (Low Voltage (Up To 72.5 kV), Medium voltage (72.5 kV - 220 kV), High Voltage (Above 220 kV)), By Installation (Indoor, Outdoor), By End-User (Industrial, Commercial, Utility) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global gas-insulated transformer market size was valued at USD 2,421.54 million in 2022. It is expected to reach USD 3,756.6 million by 2031, growing at a CAGR of 5% during the forecast period (2023–2031).

Gas-insulated transformers are highly sophisticated devices typically used in hydropower and underground electrical distribution networks. Densely inhabited urban areas, vital infrastructure substations, and offshore substations are typical locations for this. Gas-insulated transformers are superior to dangerous conventional transformers in several ways, including not requiring regular oil checks or replacement, never leaking oil, and being non-combustible and non-explosive. Due to these benefits, there has been a rise in the demand for gas-insulated transformers. When non-flammable, non-polluting transformers are required, gas-insulated transformers (GIS) are used. For instance, they are used where a conventional transformer's oil leak would be hazardous to the environment, such as in buildings, areas close to lakes and rivers, and densely populated areas. Gas-insulated transformers are made to cause less environmental damage and have fewer fire risks.

Market Dynamics

Global gas-insulated transformer market drivers:

Investments in transmission and distribution infrastructure

In recent years, power consumption has significantly increased in developing economies. Governments and power companies established reforms to reduce power losses in the transmission and distribution infrastructure and use environmentally friendly and efficient equipment to build T&D networks and related infrastructure. Many nations use gas-insulated transformers (GITs), especially for gas-insulated substations. GITs and gas-insulated switchgear (GIS) can be connected directly, eliminating the need for a separate transformer room. A gas-insulated substation (GIS), a typical configuration for inner-city applications and structures, is created by this arrangement. According to the European Network of Transmission System Operators, until 2030, there will be a need for annual transmission spending of about USD 10 billion. As variable renewables and electrification increased significantly in the region, investments in Europe stayed stable at close to USD 50 billion, with increases in spending on upgrading and refurbishing the existing grid.

Global gas-insulated transformer market restraints:

Concerns and strict environmental regulations

Sulfur hexafluoride (SF6) gas is frequently used in gas-insulated transformers as insulation. The dielectric property of SF6 gas makes it suitable for insulated transformers as opposed to conventionally hazardous oil, which runs the risk of fire, explosions, and contamination leaks. SF6 gas is chemically stable, non-flammable, and highly electronegative. On the other hand, SF6 is a strong greenhouse gas with a potential for global warming that is roughly 23,500 times greater than that of CO2. The Intergovernmental Panel regards SF6 on Climate Change as one of the most potent greenhouse gases (IPCC). As a result, manufacturers and consumers must take all necessary precautions to limit the design and handling of leaks.

Additionally, the Environmental Protection Agency filed charges against Electricity Supply Board (ESB), a state-owned electricity provider in Ireland, in September 2020 due to SF6 leaks. Six charges were brought against the company due to gas leaks at its power plant in Moneypoint, County Clare. According to the Environmental Protection Agency's (EPA) final report on Moneypoint, ESB released 55,000 tons of CO2 equivalent into the atmosphere during the preceding six years. During the forecast period, similar scenarios are likely to restrain the growth of gas-insulated transformers.

Global gas-insulated transformer market opportunities: 

Growing interest in offshore wind power in emerging economies

Many significant economies use gas-insulated transformers (GITs) to reduce the need for a large transformer room and safety concerns. In offshore substations for wind farms, the GITs can be used as an alternative to conventional transformers to solve the problem of limited space. Vietnam is home to more than 1.5 GW of offshore wind projects, according to the Global Wind Energy Council (GWEC). Due to the government's ambitious plans, the offshore wind market in the nation will likely experience significant developments in the coming years. As a result, significant changes were opened to using gas-insulated transformers (GITs) in offshore wind substations. The government is also considering centralizing planning for offshore wind projects to ensure effective, fair, and transparent auctions and support the development of the necessary electricity network and industry-specific skills. The government's long-term goal, the upcoming offshore wind projects, and the growing interest in offshore wind power in emerging nations are all expected to create significant opportunities for gas-insulated transformers (GITs) soon.

Regional Analysis

Asia-pacific dominates the global market

By region, the global gas-insulated transformer market is segmented into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

The Asia-Pacific region is the most significant contributor and one of the most densely populated in the world. Over the past few years, electricity demand has significantly increased due to the region's rapid industrialization and urbanization. As a result, investments in transmission and distribution (T&D) infrastructure have increased dramatically over the same period. Gas-insulated transformers are also gaining popularity as long-distance T&D projects strive to be more environmentally friendly by minimizing their adverse environmental effects and enhancing safety by building underground networks and smaller substations. The Asia-Pacific region also has the fastest growth rate in renewable energy use, with giants like China and India driving the expansion. Grid stability has emerged as a significant concern in nations with high levels of renewable energy integration in their grids, which also necessitates the modernization of aging T&D infrastructure. Standard transmission and distribution systems must be upgraded or retrofitted with smart grid technologies because renewable energy produced from sources like solar and wind provides variable power output.

North America is the second-largest electricity market in the world. The processes for producing, transmitting, distributing, and using electricity in the area are changing drastically. The electricity markets have undergone significant restructuring, particularly in the transmission and distribution networks, which paved the way for the rising demand for cutting-edge technologies like gas-insulated transformers. The main drivers for development in the transmission and distribution segment are anticipated to be rising electricity demand and aging power infrastructure, which will support the expansion of gas-insulated transformers in the area.

In Europe, several nations are investing in renewable technologies like solar photovoltaic and wind power to have a lower dependence on fossil fuels as a result of the energy diversification in the region. Additionally, governments have introduced several policies regarding the advancement of renewable energy in response to the growing concerns about carbon emissions. The market for gas-insulated transformers is anticipated to grow due to the policies' significant contribution to the market's renewable energy expansion and integration into national grids. In addition, there has been a constant need for gas-insulated transformers, particularly as grid infrastructures are upgraded. With increased investments in energy-efficient infrastructure, the area has made significant progress by replacing outdated transmission lines with more modern ones. Therefore, it is anticipated that during the forecast period, the growing grid infrastructure developments, the rising demand for reliable electricity, and the accelerating investment in renewable energy across all of Europe's major economies will positively impact the market for gas-insulated transformers. The region's demand for gas-insulated transformers is also anticipated to increase due to growing smart grids and grid automation trends.

The majority of the Middle East and African nations are investing in the modernization of their electrical grids due to the region's relatively underdeveloped T&D infrastructure. Several grid connection projects are also in the planning and construction stages. The need for expanding T&D networks and related infrastructure has increased among regional operators in response to the rising demand for electricity. Public and private investors have made significant investments. This is anticipated to fuel demand for gas-insulated transformers throughout the forecast period. Renewable energy production in the Middle East and Africa is another factor boosting the market. Increasing the penetration of renewable sources is anticipated to increase demand for T&D infrastructure and equipment, such as gas-insulated transformers, during the forecast period because renewable energy generation has mandated upgrading transmission grids to guarantee grid stability.

South America has been one of the last continents to enter the market for gas-insulated transformers, which has impacted the market's size. The region has a significant potential for gas-insulated transformers despite already facing the usual obstacles in developing the power infrastructure, which impede the development of the region's power scenario. South America has a vast and rapidly expanding electricity demand. Although a sizable portion of the world's electricity is produced in Brazil, nations like Argentina and Chile are working on increasing their power markets in the years to come significantly. The International Energy Agency estimates that the region's electricity demand will almost double by 2040, meaning that significant changes in the transmission and distribution sector may be necessary for the area to function under the anticipated electric load. Further, South America can anticipate a rise in demand for gas-insulated transformers as the region's renewable energy scenario develops. Although hydropower currently dominates the region, solar and wind energy are expected to overtake hydropower as the region's primary renewable energy source soon.

Segmental Analysis

The global gas-insulated transformer market is segmented by voltage, installation, and end-user.

Based on voltage, the global gas-insulated transformer market is bifurcated into low voltage (up to 72.5 kV), medium voltage (72.5 kV - 220 kV), and high voltage (above 220 kV).

Low voltage, gas-insulated power, and distribution transformers can reach 72.5 kV. Low voltage gas insulated transformer components include SF6 gas, an SF6 gas sleeve, a transformer on-load voltage regulation switch, a pressure monitoring device, a gas density gauge, a gas temperature gauge, a sudden pressure relay, a plate radiator, an airflow indicator, a winding temperature gauge, a gas circulation pump, a cooling system intelligent control box, and a blowing device. The transformer body has a coil, iron core, lead, pressure monitor, gas density gauge, sudden pressure relay, winding temperature gauge, and gas temperature gauge for secondary protection. The transformer uses SF6 as a cooling medium and internal insulator. Due to harsh climatic conditions and space limitations, North America and Europe's manufacturing, automotive, and commercial sectors will use gas-insulated transformers. High T&D efficiency, lower emissions than oil-based transformers, high fire resistance, and increased safety monitoring and protection configuration are benefits of these units. These factors are expected to increase demand for low-voltage gas-insulated transformers over the forecast period.

A box, a transformer body, a cable box, SF6 gas, an SF6 gas sleeve, a transformer on-load voltage regulation switch, a pressure monitoring device, a gas density gauge, a gas temperature gauge, and a sudden pressure relay are all parts of a high voltage gas insulated transformer (above 220 kV). A 220 kV high-voltage cable is also sent out using a cable box, SF6 gas, and an SF6 gas sleeve. The airflow indicator, plate radiator, blower, intelligent control box for the cooling system, and gas circulation pump cool the transformer. The SF6 gas is a cooling medium and an internal insulator for the transformer. Some significant benefits of high-voltage gas-insulated transformers include explosion resistance, increased fire resistance, safety monitoring, and protection configuration, which will likely increase demand for these products in the foreseeable future.

Based on the installation, the global gas-insulated transformer market is bifurcated indoors and outdoors.

The installation of gas-insulated transformers is intended for both indoor and outdoor applications. Due to their small size, reduced noise level, and low electromagnetic radiation emission, gas-insulated transformers are frequently used for underground or indoor installations in urban areas. To save space, ensure safety, and provide a steady supply of electricity, indoor installation of gas-insulated transformers is typically carried out in underground spaces beneath public parks and commercial buildings. Additionally, indoor gas-insulated transformers are appropriate for use in places where fire safety is crucial, such as hotels, department stores, schools, factories, chemical plants, and hospitals. Therefore, the indoor installation of gas-insulated transformer systems is anticipated to experience an increase in demand during the forecast period as more developing countries are anticipated to upgrade their grid systems using underground and indoor facilities to create reliable, safe, and efficient networks.

Outdoor transformers are made for safe outdoor use and convert line voltage input to the low voltage output. To transmit and distribute electricity over a great distance, outdoor installations of gas-insulated transformers are typically carried out in enclosures. Gas-insulated transformer enclosures are used for outdoor applications to shield the transformer from the elements, including any potential electrical equipment contamination. Additionally, some oil and gas production facilities are situated in remote locations, which makes it challenging to meet their energy needs. This power demand may be met by outdoor installation, propelling the segment's growth over the forecast period.

Based on the end-user, the global gas-insulated transformer market is bifurcated into industrial, commercial, and utility.

Gas-Insulated Transformers are used by industries with severe space restrictions and low maintenance needs. Aerospace, agribusiness, auto manufacturing, biopharmaceuticals, consumer goods, energy, environmental technology, machinery, and equipment are a few examples of different industries. Several nations worldwide are concentrating on growing their domestic manufacturing industries to support economic growth—one of the industries in India that is expanding the fastest in manufacturing. The Indian government started the "Make in India" program to promote the Indian economy internationally and establish the nation as a manufacturing hub. 

The commercial segment of the gas-insulated transformer market is expected to proliferate in the coming years as commercial end-users demand more electricity worldwide. Commercial electricity consumption peaks during business hours and off-peak periods have low baseloads. Gas-insulated transformers offer additional benefits due to their smaller size because most retail establishments, including shopping malls, multiplexes, and other large building complexes, are in densely populated areas with limited land. These transformers are 10% the size of standard air-insulated transformers and are housed in the terrace or basements of commercial buildings. Gas-insulated transformers are leak-proof and do not use oil, so an oil leak or spill during maintenance would not pollute the water supply. The commercial segment is expected to grow due to the environmental benefits of gas-insulated transformers in urban areas.

Recent Developments

• September 2022- Meidensha Corporation (Meiden) entered into a contract for a sustainability-linked loan (SLL) with Sumitomo Mitsui Banking Corporation (SMBC).
• August 2022- Hitachi Energy releaseda new EconiQ 420kV circuit breaker.