According to Global Market Insights release, the transformer oil market has been gradually emerging as one of the most profitable niche verticals of the global energy industry owing to the massive grid infrastructure modernisation initiatives being undertaken by various nations in the recent times. Power grid networks in the developed and emerging nations alike have been struggling with an asset base nearing the end of its lifetime.
Moreover, decades of underinvestment, stringent regulatory compliance, and burgeoning electricity demand have strained the efficiency of these networks which necessitates revamp of components like transformers. Needless to mention, the major companies partaking in transformer oil industry have a vital role to play in strengthening the energy transmission networks across the world.
One of the major trends to have impacted the growth trajectory of transformer oil market is the rising global preference toward renewable energy sources. European nations are making swift progress in upgrading their power grid networks to accommodate the switch to an energy system based on renewables. Germany has intensified its efforts to construct new cross-country high-voltage direct current (HVDC) power lines to ensure smooth energy transition. The nation has recently proposed a new Power Grid Action Plan to accelerate the power grid expansion by fixing technical glitches, incorporating cutting-edge technology, and enhance the flexibility of grid network. Apparently, the action plan would update transmission grids to run more power through them to bridge the gap until new HVDC lines are up and running by 2025. Needless to mention, an increased investment in deploying power transformers would benefit the Germany transformer oil industry. As per estimates, power transformers held more than 57 per cent of the total transformer oil market share in the year 2017 and the segment is expected to grow in the immediate future as well.
Developing countries such as China and India are deemed to be the major terrains to lead the Asia transformer oil market. China for instance, has laid out ambitious plans in its 13th Five Year Plan to reboot the electricity sector by strengthening the power transmission infrastructure and lifting price controls in specific segments of the sector to encourage competition. Considering this plan, the firms operating in the transformer oil industry are set to observe an increased product demand in the future.
Apart from China, India has been proactive in diversifying and expanding its electricity distribution network over the recent years. For instance, the Power Grid Corporation of India Ltd has announced in 2016 to spend ` 1 trillion over a period of four years to connect and expand its network across areas affected by left-wing extremism. Moreover, this massive investment would enable utilities to enhance price realisation and ensure reliable power supply to customers. The state-owned power transmission company would further reshape the electricity sector by revamping the power grid infrastructure – a factor that would propel the transformer oil market share in the nation. As various countries speed up modernisation of power grids and transmission networks to achieve the aforementioned goal, the transformer oil industry players are bound to witness enormous business opportunities in the upcoming years. In fact, as per a research study collated by Global Market Insights, Inc., the remuneration scale of the transformer oil market is estimated to surpass USD 3 billion by 2024.