Transformer demand from 2019 to 2029 and beyond The impact of Covid-19 on future markets
The purpose of this analysis is to assess the future of the global market for transformers following the global pandemic that has swept the world since the start of 2020.
bySteve Aubertin
The purpose of this analysis is to assess the future of the global market for transformers following the global pandemic that has swept the world since the start of 2020. Our original estimates were produced during the last quarter of 2019 and therefore pre-dated the pandemic. The scale and ferocity of the spread of the virus became clear during the first and second quarters of 2020, and the disruption to life worldwide is becoming clear. This has prompted a re-examination and a re-calibration of the future scenarios that were being proposed at the start of 2020.
Much has changed in the period between December 2019 and the fall of 2020 and the ramifications of those changes in a few short months will be present – at least for the next 10 years – if not longer.
Pre-Covid-19 the future demand for GSU (generator step-up) transformers was estimated to grow at 3.48 % through to 2028; details are shown in Table 1:
Table 1. Forecast global capacity totals 2018 to 2028 by type GW
| Capacity type | 2018 | 2028 | Increase in capacity GW | 2028 % of total | CAGR % |
| Nuclear | 360.4 | 395.4 | 35.0 | 4.1 % | 0.93 % |
| Fossil | 4,258.9 | 5,323.0 | 1,064.1 | 54.9 % | 2.26 % |
| Hydro | 1,123.2 | 1,383.5 | 260.3 | 14.3 % | 2.11 % |
| Renewable | 1,147.3 | 2,593.9 | 1,446.7 | 26.8 % | 8.50 % |
| Of which: | |||||
| Wind | 505.3 | 1,064.5 | 559.2 | 11.0 % | 7.7 % |
| Solar | 466.2 | 1,294.2 | 828.0 | 13.3 % | 10.8 % |
| Biomass | 131.8 | 214.8 | 83.0 | 2.2 % | 5.0 % |
| Total additional capacity | 6,889.8 | 9,695.9 | 2,806.1 | 100.0 % | 3.48 % |
These estimates produced in Q4 2019 need to be reviewed in order to estimate demands following the disrupted period and its impact on future growth. The generator step-up transformer demand differs from other transformers’ utilities demand principally because it is capital expenditure-driven and closely linked with GDP growth, whereas the system and distribution transformer segments are disproportionately affected by operational expenditure in addition to capex. The change in the forecasts for these segments are discussed later in this article, but firstly it is logical to reset the GSU forecasts.
The original forecast CAGR for generating capacity from 2018 to 2028 was estimated to be 3.48 %. This took into account the relatively low growth rates in fossil and nuclear capacity and the high growth rates expected for renewable technologies. When computed to include the replacement of redundant plant during the forecast period and the power factor effect on generating MVA, we calculated that this would result in a total 10-year demand of 4,238 GVA of GSU capacity.
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