Solid State Transformer Market Size, Competitive Landscape and Market Forecast - 2029

SKU: DMEP1217 | Last Updated On: Jun 21 2022 | Available Formats

> Global Solid State Transformer Market Expected to reach a high CAGR of 16.6% By 2029: DataM Intelligence

Global Solid State Transformer Market is segmented By Components (Converters, Switches, Others), By Product Type (Distribution Transformer, Traction Transformer, Power Transformer), By Application (Distribution Networks, Traction Systems, Others(Heatings, Lightings, and Smart Homes)), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2022-2029


Market Overview

The Global "Solid State Transformer Market" is expected to grow at a CAGR of 21.7% during the forecasting period (2022-2029).

A solid-state transformer is an electric power converter that replaces a traditional transformer in A.C. power distribution. It is more complicated than a standard transformer running at utility frequency, but it can be smaller and more efficient because it runs at high frequency. AC-to-AC converters with no D.C. stages and AC-to-DC-to-DC-to-AC converters are the two most common variants (in which an active rectifier supplies power to a DC-to-DC converter, which supplies power to a power inverter). A solid-state transformer normally incorporates a transformer that provides electrical isolation and carries the full power inside the AC-to-AC converter or DC-to-DC converter.

The solid-state transformer is smaller because the DC-DC inverting stages between the transformer coils are smaller, requiring fewer transformer coils to step up or down voltages. Voltage and current are dynamically regulated via a solid-state transformer. Some can switch from single-phase to three-phase electricity and back. Variations can input or output D.C. power to reduce the number of conversions and improve end-to-end efficiency. A Modular Solid-state Transformer is similar to a Multi-level Converter in that it is made up of numerous high-frequency transformers. It must be constructed to survive lightning and other surges as a complicated electronic circuit. A solid-state transformer is a new type of transformer.

Market Dynamics

The demand for solid-state transformers is mainly driven by the increasing global investment in renewable energy. The high installation and maintenance costs involved in the solid-state transformer are a key challenge in limiting the growth of this market.

Increasing global investment in renewable energy

Man-made climate change has severely impacted the environment and has led to the degradation of natural ecosystems. The second-order effects of climate change have been shifting weather patterns, rising extreme weather events and global temperatures. Urgent action is needed to combat these effects.

At the COP26 climate conference in Glasgow, Scotland, held in November 2021, governments worldwide pledged a landmark agreement to achieve carbon neutrality by 2050 to mitigate the worst effects of climate change. The increased adoption of renewable energy is a key strategy in combating climate change and achieving net carbon neutrality.

The Build Back Better (BBB) plan is a broad-based stimulus package for the U.S. economy. The plan includes US$180 billion in funding for renewable energy research, development and deployment, as well as climate impact studies. By 2030, India wants to generate 175 GW of renewable energy. The renewable energy sector in India is expected to get up to $15 billion in funding by 2022. Financing is expected to grow dramatically in the next years. The European Commission (E.C.), the E.U.'s main governing body, has set a goal to invest more than $100 billion per year in renewable energy until 2030 to achieve a 32 percent renewable energy share. The increased global investment in renewable energy is slated to benefit the solid-state transformer market since renewable energy is one of the largest applications for solid-state transformers. It will be a key driver for the growth of the market.

High installation and maintenance costs

The first step of a solid-state transformer installation is extremely capital demanding, requiring various modern testing devices, components and equipment. Costs have risen as the need for solid-state transformers to be integrated into the electrical grid has grown. To ensure excellent quality throughout the service life of solid-state transformers, substantial collaboration beyond traditional organizational boundaries, major process transformation and stringent governance are required.

Large investments in solid-state transformers could exacerbate a government's financial burden. After deployment, high operations and maintenance costs are also an issue for utility suppliers. Given the significant costs involved, a decline in revenue can significantly impact utility providers' ability to maintain energy infrastructure. The high maintenance and installation costs involved in solid-state transformers limit their wider adoption and are a key challenge for the market's growth.

COVID-19 impact analysis

The global solid state transformer market experienced severe impacts on revenue streams in 2020 due to the COVID-19 pandemic. The manufacturing of solid-state transformer components such as intelligent electronic devices (IEDs) was disrupted due to government-imposed lockdowns and movement restrictions. The pandemic delayed the deployment and field testing of new products and technologies. The solid-state transformer is an engineering market where growth results from innovating new products. The pandemic, thus, affected the revenues of various companies involved in the market due to reduced manufacturing and delayed product launches.

The COVID-19 pandemic lockdowns also led to a massive depression in electricity demand, as many transportation and industrial enterprises closed or scaled back to comply with government restrictions. The reduced electricity demand impacted the revenues of utility companies. Utility companies, therefore, cut back on capital expenditure and canceled new investments, thereby reducing demand for solid-state transformers. The adoption of solid-state transformers slowed drastically, except for routine maintenance replacement. The global demand for solid-state transformers is not expected to recover until late 2021 fully.

The short-term impact of the COVID-19 pandemic has been relatively severe for the solid-state transformer market. Governments are making a significant investment in renewable energy infrastructure as part of a wide-ranging economic stimulus to kickstart growth and recover from the economic downturn caused by the pandemic and achieve carbon neutrality. As the investment in energy infrastructure increases, demand for solid-state transformers will increase and the market is expected to grow gradually in the coming years.

Segment Analysis

The solid-state transformer market is segmented into product, application and region. The solid-state transformer market is segmented into utilities, electric vehicle charging stations, power distribution and traction locomotives. Utilities are leading in this segmentation, primarily due to the increase in renewable energy.

The early adoption of solid-state transformers happened for power generation from wind, solar and tidal energy. Wind, sun and tides are alternate energy sources for power generation; they can meet the world's growing energy demand while lowering carbon emissions. Wind energy is a significant contributor to the power generated from renewable energy sources and APAC is a leader in this industry. An induction generator is used with a wind turbine to convert mechanical energy to electrical energy in a conventional wind energy farm.

The energy generated is then transferred to STATCOMs via a step-up transformer. After that, it's fed into a grid. STATCOM improves the power factor of the generated electricity, while the step-up transformer raises the voltage level. Although traditional systems (step-up transformers and STATCOMs) are cost-effective, solid-state transformers can replace step-up transformers and STATCOMs while providing better reactive power adjustment. As a result, solid-state transformers are projected to be used more frequently in wind energy production.

Geographical Analysis

Asia-Pacific dominates the global solid-state transformer market. It is mainly due to the ever-increasing demand for electricity in a region undergoing rapid industrialization and adoption of renewable energy. India and China are two countries that have adopted renewable energy such as wind energy and solar energy on a large scale.

China is the world's largest electricity transmission and distribution (T & T&D). Thanks to its carbon-reduction policies and dedication to sustainable growth, it is also positioned to become a major user of smart grid technologies. China's main utility, State Grid, plans to invest roughly US$ 65 billion by 2020, with ultra-high voltage projects accounting for 40%. However, transmission investment in China fell by about USD 10 billion in 2019 compared to the previous year, as the country's focus shifted to upgrading rural electricity grids and building distribution networks. Companies are now focusing on developing smart grids due to increased investment in distribution networks, which is expected to fuel demand for SST throughout the projection period.

India's total thermal installed capacity was 233.17 GW as of February 2021. The installed capacity of hydro, renewable and nuclear energy was 46.20 GW, 91.15 GW and 6.78 GW. By 2030, the Indian government wants renewable energy to account for 40% of installed electricity-producing capacity. India has also increased its objective for solar power generation capacity by five times to 114 GW by 2022. The government is working on a "rent a roof" scheme to help it meet its goal of 40 G.W. of solar rooftop power generation by 2022. In FY20, the country's peak power demand was 170.83 GW.

In addition, India's government has set a goal of installing 227 GW of renewable energy capacity by FY22. The government has let tenders for transmission lines for USD 5 billion as of June 2019. During the projected period, investments in low and medium-voltage transmission lines are likely to create opportunities for SST implementation. Asia-Pacific is expected to retain the largest share in the global solid-state transformer market in the coming years.

Competitive Landscape

The global solid-state transformer market is competitive due to the availability of a wide variety of solid-state transformer services that cater to different client requirements. Some of the major players contributing to the growth in the segment are Hitachi Energy Ltd., Siemens Energy, Schneider Electric, Mitsubishi Electric Corporation, General Electric, Eaton, Alstom, ABB, Waukesha, Inc. and Hyundai Heavy Industries Co., Ltd. The major players in the global solid-state transformer market adopt several growth strategies such as launching new innovative products, joint ventures and collaborations, contributing to global growth in the industry.

Hitachi Energy Ltd.

Overview: Hitachi Energy Ltd. is a multinational engineering and technology services company specializing in designing and manufacturing energy equipment and services. The company’s business is segmented into product systems, design services, engineering and energy consulting. The company supplies its products and services to many global companies in the utility, energy, transportation and engineering sectors. The company’s facilities are located in more than 140 countries globally. Hitachi Energy Ltd. was founded through a joint venture between Hitachi and ABB and is headquartered in Geneva, Switzerland.

Product Portfolio

  • EconiQ is Hitachi Energy Ltd.’s main range of solid-state transformers intended for renewable energy applications. The transformers are certified free from sulfur hexafluoride (SF6) to reduce the total carbon footprint during the product lifecycle. The transformer comes in various options and can be customized to specific client requirements.

Key Developments:

  • In March 2021, Hitachi Energy Ltd and Nanyang Technological University, Singapore (NTU Singapore), a prominent research-intensive university, collaborated on solid-state transformer (SST) technology development. The Energy Research Institute leads the project funded by the National Research Foundation of Singapore (NRF). It is part of Singapore's flagship Energy Grid 2.0 initiative, which aims to shape the next-generation grid system and transform how energy is managed by combining multiple energy sources into a more efficient, sustainable, and resilient single, smart network.

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