Transformer Oil Market is Expected to Rise at a CAGR of 6.5% During 2022-2028
The global transformer oil market was estimated at USD 1.80 billion by 2020 and is expected to grow with a Compound Annual Growth Rate (CAGR) of 6.5% between 2022 and 2028. These products have excellent thermal and electrical protection properties, oxidative stability, and a tendency to low or negative gas control. Political instability and a slowdown in inflation have fueled industry growth in recent years, with consumers increasingly choosing to buy in bulk.
As an extension of power grids in the Asia Pacific region is observed, the investment in T&D programs by 2020 was estimated at USD 250 billion and is expected to grow at a CAGR of 4.15% to reach a target of USD 386 billion by 2028. Asia led T&D investment by 2020 by accounting for about 44.5% of global investment in the T&D program. These investments are accompanied by grid consolidation, replacement of old T&D infrastructure, and grid expansion. In addition, T&D investment in the Indian subcontinent is expected to grow at a CAGR of 6.72% during the period 2020-2028, which represents a significant increase in the regional power grid network.
Investment in expanding the T&D and grid network through economic development in the Asia Pacific region will be accompanied by the potential growth in electricity demand due to rapid industrial growth and urbanization in the region. An additional installation of a transformer and switchgear will be needed as the grid network expands. Although, the main obstacle to the growth of the transformer oil market is the fact that Naphthenic mineral oil has long been a popular transformer oil due to its high efficiency, ease of availability, its useful chemical properties as a good source for low temperatures and different cooling capacity. The adoption of paraffin minerals has gained momentum over the years, due to their excellent oxidation strength. Both paraffin and naphthenic variants of mineral oil are highly refined and digested petroleum products, thus less harmful. However, it is also characterized by deterioration of organic matter from 0–40% and is considered a non-renewable resource.
The transformer oil market is divided on the basis of the product, such as Naphthenic, Paraffinic, Silicone, Bio-based mineral oil. Based on applications, the market is segmented into the transformer, power transformer, distribution transformer, reactor, switchgear. While on the basis of end-user, the market is divided into transmission & distribution, railways & metros, power generation, etc.
The Asia Pacific was the largest transformer oil market by 2020, driven mainly by operations in China, India, Japan, South Korea, and Australia. The rapid increase in demand for electricity and the increase in power generation capacity in developing countries such as India and China, as well as the growth of industrial and commercial industries will lead to an increase in the number of small stations. Increasing the number of smaller stations will increase the demand for transformers, which in turn will increase the demand for transformer oil in the Asia Pacific.
Some of the major players operating in the transformer oil market include Nyanas AB (Switzerland), Ergon (Australia), PetroChina (China), Apar Industries (India), Calumet Specialty Products Partners (USA), Sinopec (USA), Cargill (USA), Engen Petroleum (South Africa), Valvoline (USA), San Joaquin Refinery (USA), Gandhar Oil Refinery (India).
Browse the full Report - Transformer Oil Market by Oil Type (Mineral, Silicone, Bio-based), by Application (Transformer, Switchgear, Reactor), by End User (Transmission & Distribution, Power Generation, Railways & Metros, Others), by Region (North America, Europe, Asia Pacific, Latin America and Middle East & Africa) - Global Industry Assessment (2016 - 2021) & Forecast (2022 - 2028)