Transformers Market Growth Fueled by Utility Sector & Rising Power Demand Across Asia-Pacific

Transformers Market to Reach $103 Billion by 2031, Driven by Smart Grids, Renewable Energy, and Utility Demand

WILMINGTON, DE, UNITED STATES, August 26, 2025 /EINPresswire.com/ --

The global transformers market is undergoing rapid expansion, fueled by the increasing demand for electricity, renewable energy integration, and smart grid projects. According to a new report published by Allied Market Research, the transformers market size was valued at $58.6 billion in 2021 and is projected to reach $103.0 billion by 2031, registering a CAGR of 6.1% from 2022 to 2031.

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The Role of Transformers in Modern Power Systems

A transformer is a static electrical device that transfers energy between circuits through electromagnetic induction. Originally developed in 1831 by Michael Faraday, the transformer has evolved into a critical component of the global energy infrastructure.

By adjusting voltage levels, transformers enable efficient power transmission from generating stations to end-users. Today, they are indispensable for industrial, commercial, utility, and residential power applications, ensuring stability and efficiency in modern electrical grids.

Transformers not only manage energy conversion but also support electric vehicle charging stations, renewable power projects, and smart grid initiatives—key drivers of future market growth.

Market Growth Drivers

Several factors are contributing to the expansion of the global transformers market:

Rising electricity demand from manufacturing industries and residential sectors.

Smart grid development in emerging economies to enhance power distribution efficiency.

Growth of renewable energy projects, particularly solar and wind, requiring transformer integration.

Electric vehicle (EV) adoption, increasing the need for charging infrastructure supported by advanced transformers.

However, the industry faces challenges, such as risks associated with high DC voltages, which can hamper market penetration.

Regional Analysis

Regionally, the Asia-Pacific market dominated in 2021 with over 35% of global revenue share. The region is expected to grow at a CAGR of 6.4% through 2031, propelled by major infrastructure development in China and India, along with significant investments in solar power and smart grid projects.

Meanwhile, the LAMEA region (Latin America, Middle East, and Africa) is projected to witness the highest CAGR of 6.6%. This surge is linked to increasing power demand in manufacturing industries and national transitions toward renewable energy.

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Segment Insights

The transformers market is segmented by type, power rating, cooling type, phase, insulation, application, and region.

By Type

Distribution transformers accounted for nearly half of the market share in 2021 and are expected to maintain dominance through 2031. Their widespread use in residential, commercial, and industrial sectors makes them a cornerstone of the global market.

By Power Rating

The small power rating segment represented over 40% of the market in 2021, driven by demand in rural power distribution. This segment is projected to expand steadily, offering reliable solutions for small-scale power needs.

By Cooling Type

Air-cooled transformers held more than 60% share in 2021 and are forecasted to grow at a CAGR of 6.3%. These transformers are widely used in renewable projects due to their cost-effectiveness, efficiency, and durability in diverse environments.

By Insulation

Dry-type transformers dominated in 2021, thanks to their eco-friendly design and lower energy losses. Their safety and sustainability make them attractive for both residential and commercial applications.

By Phase

Three-phase transformers held the highest share in 2021, as they are widely used in industrial and utility sectors for transmitting and storing high-voltage energy.

By Application

The utility segment was the largest in 2021, with a CAGR of 6.3% expected during the forecast period. Utility-scale demand is driven by the need to convert high-voltage transmission into medium-level voltages suitable for end-use applications.

Key Market Players

Prominent companies operating in the global transformers market include:

ABB Ltd.

Siemens AG

General Electric

Eaton

Toshiba Corporation

Schneider Electric

Mitsubishi Electric Corporation

CG Power & Industrial Solutions Ltd.

VTC/GT

SGB SMIT

These players are investing in advanced transformer technologies, focusing on efficiency, grid reliability, and sustainability.

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Future Outlook

The future of the transformers market looks promising, with innovations in smart grid integration, renewable energy support, and EV infrastructure driving adoption. Governments and private sector stakeholders are heavily investing in modernizing power distribution networks to meet rising global energy demands.

By 2031, the transformers market is expected to play a pivotal role in global energy transition—providing reliable, efficient, and eco-friendly solutions that power everything from urban centers to rural communities.

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About Us

Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.

Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.

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Allied Market Research
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