Solid State Transformer Market Size, Share & COVID-19 Impact Analysis, By Voltage Level (MV/LV and HV/MV), By Application (Renewable Power Generation, Electric Vehicle Charging Stations, Power Grids, Traction Locomotives, and Others), and Regional Forecast, 2021-2028

The global solid state transformer market size was valued at USD 91.6 million in 2020 and is projected to reach USD 213.5 million by 2028 from USD 100.7 million in 2021, growing at a CAGR of 11.3% during the forecast period. Based on our analysis, the global market exhibited a negative growth of -10.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The global impact of COVID-19 has been unprecedented and staggering, with solid state transformer witnessing a negative impact on demand across all regions amid the pandemic. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Solid state transformer (SST), also known as a smart transformer, is a modern network device that integrates different power electronic converter stages with low or high-frequency transformers. SST delivers several benefits, such as they are efficient in utilization, highly reliable and robust, and is inexpensive as compared to traditional transformers. Furthermore, they reduce supply reliability and grid losses and safeguard the load from power disruptions. SST allows voltage transformation from Direct Current (DC) to Alternate Current (AC), AC to DC, and also DC to DC on various voltage levels. They are widely used in applications that enable a smooth conversion between AC and DC and help in voltage conversion. An SST is a prime enabler of uni-directional or bi-directional power flow with autonomous distributed and control intelligence by communications.

Delays in Renewable Energy Projects Due to COVID-19 Harmed the Solid State Transformer Market Growth

Every industry has suffered as a result of the global pandemic induced by the spread of the novel coronavirus. Industries have experienced enormous losses as a result of the implementation of rigorous rules, such as lockdowns, to prevent the spread of COVID-19.

The COVID-19 pandemic has heavily impacted the global smart transformer industry; most of the companies/industries have become non-operational. The lockdown imposed in different regions hit the operations of several power distribution companies, which led to the decline in the demand for transformers across sectors. Renewable energy generation is the largest smart transformer application, which is severely affected during the pandemic. The negative effect of the pandemic on renewable energy generation has led to the delay in solid-state transformer project construction. Thus, this has a severe impact on various renewable project commissioning.

LATEST TRENDS

Rise in Number of Electric Vehicles to Enhance Market Growth

An increase in the production of electric vehicles offers growth opportunity for the market players as several countries, including India, China, Germany and the U.S., and others, are already deploying and encouraging the production of electric vehicles. Thus, the increase in demand for electric vehicles further boosts the development of electric charging stations, creating ample opportunities for the SST market. Furthermore, several electric vehicle initiatives across the globe are expected to enhance the industry outlook. For instance, in July 2021, the U.S. utility public service electric and gas company (PSE&G) partnered with Landis+Gyr for electric vehicles initiatives. PSE&G will be investing USD 1 billion to help customers improve their energy efficiency, USD 700 million in smart meters, and electric vehicles initiatives.

Major Organic and Inorganic Expansions from Key Players to Shape Industry

Continuous efforts by various major players to boost their output efficiency across the globe are set to unveil new opportunities for a robust industry outlook. For instance, in March 2021, Eaton, a power management company, declared the acquisition of Tripp Lite, one of the prime suppliers of power quality products. Tripp Lite has headquarter in Chicago, Illinois, and has connectivity solutions, including rack power distribution units, surge protectors, enclosures for industries, and single-phase uninterruptible power supply systems in the Americas. In addition, the company will bolster the competitiveness of new businesses while searching for new business opportunities.

DRIVING FACTORS

Modernization of Aging Power Distribution Infrastructure to Boost Market Size

The upgrade of aging power distribution systems is expected to drive the market growth of SST. The growing demand for intelligent and modernized power distribution infrastructure is likely to create ample opportunities for the market. In addition, government mandates to augment grid efficiency are propelling the adoption of smart transformers across various utility and energy sectors. Also, the market is expected to grow, owing to the advantages provided by SST. SST provides several benefits such as efficient power transmission, AC to DC conversion, and bidirectional power flow.

In June 2021, Snohomish County PUD announced to make electric system improvements in their existing substations. The PUD has work scheduled on many substations, including automation upgrades, equipment replacement, and standard maintenance. In addition, the PUD plans to replace their existing aging poles, assess and treat thousands of poles, and replace miles of aging underground cable.

Growing Adoption of Non-Conventional and Renewable Energy to Propel Industry Growth

Major economic countries are promoting several initiatives to enhance the part of renewable energy in their energy equity. Renewable energy benefits human well-being and general welfare in ways that go beyond GDP. Increasing the amount of renewables in the global energy mix by doubling raises global GDP by 2030 by up to 1.1%, or USD 1.3 trillion services as well as fossil fuels. Several countries are expanding the adoption of renewable energy generating in their total electricity output to reduce their reliance on coal-based electricity generation. Traditional transformers are replaced by these transformers in the renewable energy zone owing to the smart transformer design and safety aspects. Several government policies across the globe are helping initiate the usage of renewable energy in their industrial sectors. For instance, the government of the U.S. has targets to lower the greenhouse gas emission to 50-52% by 2030 and try to end the GHG emission by 2035 due to the usage of fossil fuels for power generation. Furthermore, various advantages delivered by SST, such as smart transformer efficiency, bidirectional power flow, and AC to DC conversion, are estimated to boost the market outlook.

RESTRAINING FACTORS

High Cost of Product to Restrain Market Growth

One of the key market restraints is the high cost associated with these transformers. Hence, acceptance of smart transformers is low in underdeveloped and developing regions across the world. In addition, SSTs have performance limitations associated with their reliability and are not much commercialized. These factors are estimated to hinder the global market growth during the forecast period.

SEGMENTATION

By Voltage Level Analysis

HV/MV Segment Witnesses Significant Growth Due to its Highest Adoption Rate

Based on voltage level, the market is primarily bifurcated into MV/LV and HV/MV. The HV/MV segment dominates the market and is projected to hold a significant share in the market. A major application of SSTs adopted in HV/MV level is in offshore wind turbines for HVDC/MVAC configuration. In this application, the lower weight or volume ratio of SSTs as compared to other passive transformers is a major feature that makes these transformers economically attractive.

The MV/LV segment is expected to grow at a significant rate during the forecast period. The growth is attributed to the rising demand for electric vehicles across the globe. The increasing demand for electric vehicles is primarily supported by growing government investments in electric vehicle charging infrastructures. Hence, growth in EVs further boosts the development of electric charging stations and thus surges the demand for MV/LV solid-state transformer.

By Application Analysis

Renewable Power Generation Will Dominate Market Owing to Large Fleet Size

Based on application, the global solid state transformer market is segmented into renewable power generation, electric vehicle charging stations, power grids, traction locomotives, and others. The renewable power generation segment dominates the market and is estimated to hold a major market share. The renewable power generation segment can be further divided into wind, tidal, and solar power. The growth is majorly attributed to the acceptance of these transformers for alternative power generation by non-conventional energy sources such as solar, wind, and tidal energy.

The electric vehicle charging stations segment holds a substantial share over the forecast period. This is attributed to the rising demand for electric vehicles across the globe, which contributes to the growth of EV charging infrastructure. Electric vehicles (EVs) are largely adopted to reduce greenhouse gas emissions from vehicles and minimize the dependency on oil. EV charging is primarily based on direct current sources and has resulted in the increased demand for active power control, thus boosting the demand for smart transformers. Traction locomotives are expected to grow due to the establishment of transport infrastructure majorly in developing regions such as Asia Pacific.

REGIONAL INSIGHTS

The market has been analyzed across major regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Asia Pacific held the largest market share in the world, accounting for USD 33.3 million in 2020 and also witnesses the highest growth rate during the forecast period. China holds the maximum share in the market and dominates the regional market. China accounts for the fastest growing solid state transformer market due to the region's huge demand for smart grids and energy, including traction locomotives. For example, in September 2021, the Government of China announced the power supply project for the Laos Railway. The project includes the construction of 20 circuits of 115 kV transmission lines having a length of 257 km with 11 bays in 10 substations to supply power from the state-run Electricite du Laos grid to around 10 railway traction substations.

North America is anticipated to witness promising growth in the market. The primary factor driving the growth in the region is continuous developments in renewable energy potential to the power grid systems. Furthermore, technological advancements and growing investments in smart grids and energy systems are estimated to augment the markets demand. In addition, several contracts led by the players to boost low carbon energy generation are expected to positively enhance the market outlook in the region. For instance, in October 2021, Ameresco, one of the leading cleantech integrators in renewable energy and energy efficiency, announced USD 43 million Energy Savings Performance Contract (ESPC) with the U.S. Coast Guard (USCG). Planned projects include the deployment of power distribution transformers, installation of electric vehicle (EV) charging stations, and air conditioning (HVAC) equipment upgrades.  

In Europe, the market for the solid state transformer is expected to witness growth during the forecast period owing to the presence of key players in the region. Major transformer manufacturers, such as Siemens, Scheider Electric, Eaton, and Amantys Limited are estimated to increase the demand for smart transformers in the region during the forecast period. Besides, the new technological advancements in the industrial sector coupled with the rise in the number of electric vehicles in the region are further expected to boost the market outlook. Also, several ongoing contracts by the prime players are estimated to enhance the market in the region. For example, in January 2021, Rosh Engineering, a British engineering company, secured a three-year transformer refurbishment framework. The firm is situated in the northeast of England secured an agreement for the refurbishment and repair of 33kv/11kV transformers for network distribution operator Electricity North West (ENW).

KEY INDUSTRY PLAYERS

General Electric, Eaton, Alstom, Hitachi ABB Among Leading Companies In Providing Solid State Transformers To Various End-Users

The competitive landscape of the global market has shown that it is highly fragmented with the presence of numerous competitive players. Exide Industries, Amara Raja, Banner Batteries, Novelis, and Hitachi Metals form a significant portion of the market for delivering smart transformers across the globe. These companies have invested in technological developments and are expected to remain the market leaders during the forecast period.

List of Key Companies Profiled:

• General Electric (U.S.)


• Alstom (France)


• Eaton (Ireland)


• Hitachi ABB (Japan)


• Power Systems & Control Inc. (Virginia)


• Schneider Electric (France)


• Siemens (Germany)


• Varentec Inc. (U.S.)


• Vollspark (Israel)


• Amantys Limited (U.K.)


• SPX Transformer Solutions (U.S.)


• Ermco (U.S.)


• Mitsubishi Electric (Japan)


• Synergy Transformers (India)


• GridBridge (U.S.)


• Kirloskar Electric (India)

KEY INDUSTRY DEVELOPMENTS:

• July 2021: GE Renewable Energy Grid Solutions business secured multiple orders to supply765 kV transformers, including solid-state transformers and reactors in India. The contracts have been granted by Power Grid Corporation of India, one of India's largest state-owned transmission companies. As part of the agreement, GE will deliver 13 units of 765 kV transformers and around 32 units of 765 kV reactors.


• August 2021: Statnett, a state-owned grid operator in Noway, selected Cognite for the development of various power systems and asset management platforms. Statnett will conduct orderly maintenance of transformers, gas-insulated substations, and power lines that form the power grid. Cognite secured three years contracts from Statnett to deliver and develop digital solutions within the areas of smart asset management and power system analysis.

REPORT COVERAGE

The global market research report provides a detailed solid state transformer market analysis and focuses on key aspects such as leading companies, product types, and leading solid state transformer applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

REPORT SCOPE & SEGMENTATION