The article authored by Hassan Zaheer, COO at PTR, explains the evolving dynamics of power transformers, highlighting their crucial role in modern electricity grids amid increasing demand and constrained supply. Power transformers are essential for the energy transition and grid modernization, yet they are challenging to procure, with lead times extending beyond 30 months. The anticipated addition of 4 terawatts of new generation capacity globally in the next three years underscores the demand, expected to grow at an annual rate of 6.3%. On the flip side of the coin, the situation of power transformers manufacturing and supply is a bit different. PTR’s research indicates that the current global production capacity of power transformers OEMs is around 3.25 million MVAs. This is further expected to increase annually by 2.5% in the next three years between 2024-2027, considering several capacity expansion announcements by power transformers manufacturers around the world.Despite this apparent surplus, actual production lags behind demand by around 2% due to vendor approval processes, logistical challenges, and material shortages.

Regional dynamics reveal that North America and the Middle East are significant demand hubs, with cumulative demands of 1,044,500 MVA and 895,000 MVA, respectively, over the next three years. Investments in production capacity expansions in these regions are notable but will still result in net imports. Conversely, Asia Pacific remains the largest global production hub, with 5.5 million MVA in anticipated demand, yet it exports excess capacity. The article concludes that sustainable demand coupled with regional investment opportunities indicates a dynamic market, necessitating strategic planning for OEM capacity expansions while considering workforce and material constraints.

Follow this link to learn more: Power Transformers Supply-Demand Dynamics – Should you still invest in new production capacity expansions? 

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