The Future Development Trends of the Transformer Industry

A transformer is a device that utilizes electromagnetic mutual inductance to transform voltage, current, and impedance. The most basic form of a transformer consists of two sets of coils wound with wires, which are inductively combined with each other.

With the sustained, healthy and high-speed development of China's economy, the demand for electricity continues to grow rapidly. In 2011, the total electricity consumption in China was 4.69 trillion kilowatt hours, an increase of 11.7% compared to the previous year, and consumer demand remained strong. The per capita electricity consumption is 3483 kilowatt hours, an increase of 351 kilowatt hours compared to the previous year, exceeding the world average. Nowadays, the country has increased investment in power construction and activated the transformer market. However, at the same time, a large number of enterprises have entered the transformer industry, causing rapid expansion of production capacity in the industry, and some drawbacks are gradually becoming apparent.

Low level operation of transformers, industrial strength needs to be improved

The transformer industry in China has a large scale, with a majority of small and medium-sized enterprises. As of November 2008, there were a total of 1589 enterprises in China's transformer industry, with only over 130 having a total industrial output value exceeding 100 million and only 16 having employees exceeding 2000. The market power is too dispersed, and the industrial system of "leading small and medium-sized enterprises" has not yet been fully formed.

At the same time, most transformer enterprises have been operating in a low efficiency environment, and the phenomenon of overcapacity is particularly serious. The annual demand for transformers in China is around 1.5 billion kilovolt amperes, while the production capacity of the transformer industry is about 3 billion kilovolt amperes. Since 2009, the speed of national power construction has slowed down, and the demand for domestic transformers has decreased. Especially, power grid enterprises have adopted centralized bidding to purchase transformers, and low-priced bidding has led to unprecedented fierce competition among enterprises. There has even been a situation where transformer enterprises sacrifice product quality for malicious competition, resulting in chaotic market order.

Overcapacity, multiple quality hazards, and dispersed industries have become industry dilemmas that cannot be ignored in the entire transformer industry. How to break these dilemmas has always been a topic of common consideration among industry insiders, and national energy-saving and emission reduction policies may provide an export for the transformer industry in difficult times.

The Road to Breakthrough for Transformers in the Severe Industry Situation

On August 21, 2012, the State Council issued a detailed draft of the "Twelfth Five Year Plan for Energy Conservation and Emission Reduction", clarifying the specific goals and investment plans for energy conservation and emission reduction during the "Twelfth Five Year Plan" period. It is required to reduce power transformer losses during the "Twelfth Five Year Plan" period, with no load losses reduced by 10% to 13% and load losses reduced by 17% to 19%. This undoubtedly provides policy support for the promotion of energy-saving transformers.

According to data disclosure from State Grid of China, as of the end of 2011, the total number of distribution transformers operating on the grid was approximately 13.5 million, of which 2.94 million were energy-saving distribution transformers of S11 type and above, accounting for 21.8% of the total. It can be seen that in the next few years, 78.2% of the transformers of State Grid will need to be replaced with S11 or higher models. Moreover, "phasing out high energy consuming transformers" is no longer a recommended clause for "being seen but not used". According to Zhao Yuejin, China's energy efficiency standards are mandatory, and high-energy consuming products that need to be phased out will be listed as "high-energy consuming products phased out