A new report issued by Frost & Sullivan forecasts the global smart transformers market will reach $35.45 billion by 2022.
In Europe alone, the market is expected to record 600 billion euros investment by 2020.
The global smart transformers market is expected to be driven by massive rollout of distributed energy resources and two-way power flow systems.
Sales are expected to intensify in North America, Germany, China and India with interests rising in the UAE, Saudi Arabia and Brazil.
Farah Saeed, digital grids research director at Frost & Sullivan, said: "Grid modernisation, smart grids, and new rapid transit rail networks with high-speed trains and electric vehicle (EV) charging stations are expected to fuel demand for smart/solid-state transformers.
"To make the most of this burgeoning demand, original equipment manufacturers (OEMs) should invest heavily in setting up manufacturing plants in the frontier nations. Partnering with local resellers and OEMs will give them a huge advantage when trying to penetrate the Asia-Pacific market, especially Southeast Asia."
OEMs are recommended to partner with local firms, governments and organisations to make sure that the design of their transformer meets the stipulations set by the regulatory bodies in particular countries or regions.
"The global market faces stiff competition from Chinese and South Korean manufacturers due to their higher-volume sales and lower-priced transformers. The top five market leaders have to innovate business models or risk losing market share to creative and emerging companies," reiterated Saeed.
The report predicts OEMs from low-cost European countries such as Slovakia and Romania will continue flooding the market.
Key report findings include:
- Middle East: The high growth in electricity consumption is a key driver. The UAE will experience 4.5% to 5% growth between 2015 and 2022, while Qatar is expected to grow at 8% to 10%.
- North America: Substantial investments through upgrades, replacements and expansion of the present and future transmission & distribution (T&D) infrastructure will drive the transformer market.
- Asia-Pacific: The T&D investments in Asia-Pacific are anticipated to reach $3.1 billion between 2014 and 2035.