Industrial Control Transformer Market

Industrial Control Transformer: An Overview

Industrial control transformers are a type of electrical transformer that is specifically designed to provide power to control circuits in industrial settings. These transformers are typically smaller and less powerful than other types of transformers, such as power transformers, and they are often used in conjunction with other electrical components to create complex control systems.

In this essay, we will take a closer look at industrial control transformers, including their purpose, design, and applications.

Purpose of Industrial Control Transformers

• The main purpose of an industrial control transformer is to provide power to control circuits in industrial machinery and equipment. Control circuits are the electrical systems that are used to manage the operation of various components in machinery, such as motors, sensors, switches, and relays.
• Control circuits require a lower voltage than the primary power supply that is used to run the machinery itself. This is because the components in control circuits are often more sensitive and delicate than the larger motors and other equipment that they control.
• Industrial control transformers are designed to step down the voltage from the primary power supply to the lower voltage required by the control circuit. They also provide isolation between the primary power supply and the control circuit, which helps to protect the delicate components in the control circuit from voltage surges and other electrical disturbances.

Design of Industrial Control Transformers

• Industrial control transformers are typically designed to be small and compact, with a low power output. They are often housed in a protective enclosure, such as a metal or plastic case, which helps to prevent damage from dust, moisture, and other environmental factors.
• The primary winding of an industrial control transformer is connected to the primary power supply, which may be a single-phase or three-phase AC voltage source. The secondary winding of the transformer is connected to the control circuit, which typically operates at a lower voltage than the primary power supply.
• The transformer is designed to step down the voltage from the primary power supply to the lower voltage required by the control circuit. The ratio of the number of turns in the primary winding to the number of turns in the secondary winding determines the amount of voltage step-down that the transformer can provide.

Applications of Industrial Control Transformers

• Industrial control transformers are used in a wide variety of industrial applications, including manufacturing, process control, and automation. They are often used in conjunction with other electrical components, such as relays, switches, and sensors, to create complex control systems that can manage the operation of machinery and equipment.
• One common application of industrial control transformers is in motor control circuits. In these circuits, the transformer provides power to the control circuit that manages the operation of a motor. The control circuit may include relays, switches, and other components that can turn the motor on and off, change its speed or direction of rotation, and protect it from damage due to overloads or other electrical disturbances.
• Another common application of industrial control transformers is in process control systems. In these systems, the transformer provides power to the control circuit that manages the operation of various sensors and actuators that are used to monitor and control industrial processes, such as temperature, pressure, and flow rate.

Industrial control transformers are a vital component of many industrial control systems. They provide a safe and reliable way to step down the voltage from the primary power supply to the lower voltage required by control circuits. With their compact size and reliable performance, industrial control transformers are an essential tool for managing the complex machinery and equipment that are used in modern industrial settings.

The pandemic has caused major disruptions and challenges for the industrial control transformer sector, but it has also presented new opportunities. COVID-19 has shed light on the importance of risk management, preparedness, and resilience. Leading manufacturers in this sector, like Siemens and ABB, have experienced significant supply chain constraints in critical areas such as base metals (e.g. copper, aluminum, and steel), plastics, semiconductors, and transportation services.

ABB faced several challenges during the pandemic, including disruptions to workforce and operations due to quarantine measures, government orders, facility closures, illness, travel restrictions, and the implementation of precautionary measures. As a result, ABB experienced a decline in orders and revenues in 2020, with orders down by 7% to USD 26.5 billion and revenues also down by 7%. The emergence of new COVID-19 variants and the associated uncertainties could pose future challenges to manufacturers in meeting their manufacturing needs and may negatively impact production and shipment of products.

Despite these challenges, the global industrial sector has gradually recovered thanks to progress in COVID-19 vaccination programs and the lifting of travel restrictions. This has led to an accelerated demand for industrial control transformers and their associated products. It is essential that companies continue to prioritize risk management, preparedness, and resilience to effectively respond to the ongoing challenges presented by the pandemic.

Industrial Control Transformer Market Dynamics

Drivers in Industrial Control Transformer Market

The industrial control transformer market is being driven by the rising global demand for energy consumption across various industries. According to the International Energy Agency (IEA), worldwide total electricity final consumption reached 22,848 TWh in 2019, indicating a 1.7% increase from the previous year. While the total electricity final consumption in OECD countries decreased by 1.1% in 2019 compared to the previous year, the final electricity consumption in non-OECD countries increased by 3.8%.

This growing demand for electricity has led to increased electricity trade between countries, particularly in OECD Europe where electricity imports have grown at an average annual growth rate of 3.9% since 1974. As a result, the total annual energy investment is projected to reach USD 5 trillion by 2030, which will contribute an extra 0.4% per year to the global GDP growth.

With investments in clean energy and energy infrastructure expected to triple by 2030, this increase in spending has created millions of jobs in the clean energy, engineering, manufacturing, and construction industries. These trends are expected to drive the global GDP up by 4% in 2030, which will increase the demand for energy management systems, clean energy, and energy-efficient technologies. As a result, the demand for industrial control transformers is expected to increase significantly to meet the growing demand for energy consumption across various industries.

Restraints in Industrial Control Transformer Market

The adoption of Direct Current (DC) electric power is on the rise, due to its potential to drive economic growth, innovation, research and development opportunities, and environmental sustainability. DC technology and applications offer superior energy efficiency, better power quality and reliability, and are inherently aligned with renewable and clean energy development. DC motors and appliances offer better efficiency and power-to-size ratio than AC motors, leading to significant energy savings.

To meet the COP 26 goal of reducing 3x more CO2 emissions by 2030, industries must shift towards renewable and low-carbon energy sources. DC power is compatible with renewable energy sources like solar and wind power, which produce irregular electricity and require energy storage (batteries) to ensure a steady supply. Batteries and solar PV are fundamentally DC energy sources, making DC a more mechanically suitable interface. Additionally, most energy storage technologies are DC-based, leading to increased efficiencies and decreased operational losses.

As electronic devices need DC power, eliminating AC to DC conversion losses is crucial to encourage the shift to DC power. The need for DC power is increasing due to the growing reliance on electronic devices, and businesses at the "apex of the pyramid," such as server farms and data centers, are the biggest new consumers of electricity. To guarantee 24/7 electricity availability with no downtime and to increase supply efficiency, new advances in DC applications are spurring investment in local DC power generation.

Despite being a crucial technology in many industries, the demand for industrial control transformers is lower in the oil and gas sector. The declining market trend in the oil and gas industry due to lower oil prices is causing a tangential demand for industrial control transformers. The oil and gas industry is a significant market for industrial control transformer technology, and disruptions in demand from this industry can impact the market in several ways.

Opportunities in Industrial Control Transformer Market

The chemical and petrochemical industry is rapidly growing and creating numerous opportunities for various technologies, including industrial control transformers. These transformers are highly durable, efficient, and require minimal maintenance, making them ideal for use in a wide range of industrial applications such as relays, timers, solenoids, and motor starter buttons.

Due to the energy-intensive nature of the chemical industry, a constant and high power supply is critical for the production of various chemicals, which creates a high demand for industrial control transformers. According to a recent report by BASF, global chemical production (excluding pharmaceuticals) is expected to grow by 3.5% in 2022, with a significantly stronger production forecast in the US at 4.5%.

The automotive and electronics sectors in Japan are also expected to offer strong growth opportunities, with a growth rate of 2.5% in 2022. Similarly, South America's chemical production is expected to grow at a rate of 1.5% due to the recovery of the automotive industry and moderate growth in demand from agriculture and the raw materials sector.

However, despite the significant demand for industrial control transformers, the oil and gas industry has a lower demand for this technology, which is causing a decline in the production rate of industrial control transformers. This declining trend is due to the decreasing oil prices, which is impacting the overall market for industrial control transformers. As the oil and gas industry holds a major share in the industrial control transformer market, any disruptions in demand from this sector can significantly affect the market.

Challenges in Industrial Control Transformer Market

Industrial control transformers play a crucial role in mining operations worldwide, specifically in metals and mining applications, such as rolling mills, hoists, blowers, and processing lines. However, the coal mining industry faces several challenges due to increasing emission regulations and global decarbonization goals. Coal is a highly polluting source of energy, leading advanced economies worldwide to reduce their consumption of coal to comply with environmental regulations. According to the International Energy Agency, coal production in the United States is predicted to decrease by 77 MT, and in the European Union, by 102 MT by 2024. In addition, the power sector in these regions is expanding rapidly, with a surge in demand for renewable energy sources such as wind and solar PV. As countries switch to using gas instead of coal for power generation due to its lower carbon intensity, the demand for coal is expected to decline rapidly. Consequently, this may lead to a decrease in coal mining activity, negatively impacting the demand for industrial control transformers in the coal mining industry.

Market Ecosystem

The industrial control transformer market is being driven by various factors, including the need for safe and smooth operations in industries such as power generation, manufacturing, and food & beverage. The market size of the 120 V industrial control transformer is relatively large due to its common installation in control panels in small workspaces where low voltages are required.

In terms of frequency, the 50 Hz industrial power control transformer market is being driven by government regulations and standards pertaining to power supply frequency. These transformers are widely used in motor starters, contactors, solenoids, timer circuits, relays, and control panels in various industrial equipment. The growth of major economies in the Asia Pacific region, such as China, India, South Korea, Japan, Indonesia, and Australia, is also driving the market.

According to the International Monetary Fund (IMF), the Asia Pacific region's economy grew by 6.5% in FY2021, with expectations of further growth of 5.7% in FY2022. Although the COVID-19 pandemic caused an economic decline of about 1.5% in 2020, the demand for electricity in the region is expected to have grown by 8% in 2021, from a low of 2% in 2020.

The major end users of industrial control transformers are industrial sectors such as power generation, oil & gas, chemical & petrochemical, and others. Despite the pandemic's impact on the global economy, electricity generation is considered an essential service and was hence less affected by the coronavirus pandemic in 2020.

The chemical industry is projected to be the fastest-growing segment from 2022 to 2027, according to market analysis. Industrial power control transformers are used in the chemical sector to regulate the movement of fluids and semi-fluids in a manufacturing plant, such as for transporting chemicals during production. A BASF report estimates that global chemical production (excluding pharmaceuticals) will grow by 3.5% in 2022, which is expected to increase sales of industrial control transformers. These transformers are utilized in a variety of chemical production applications, such as plastics and ammonia synthesis. The European chemical industry report shows that China had the highest sales of around USD 1,547 billion in 2022. Manufacturers of industrial control transformers are expected to benefit from these developments in the chemical industry by creating new revenue streams.

The Asia Pacific region is anticipated to lead the industrial control transformer market in terms of value and volume during the forecast period. The region is rapidly developing, driven by major economies such as China, India, South Korea, Japan, Indonesia, and Australia. According to the International Monetary Fund, the region's economy grew by 6.5% in FY2021 and is projected to increase by 5.7% in FY2022, though it experienced a 1.5% economic decline due to the COVID-19 pandemic in 2020. The power generation, oil and gas, chemical and petrochemical sectors are the primary end-users of industrial control transformers. In 2020, the demand for electricity was less affected by the pandemic because it is considered an essential service. The increased demand for electricity in the Asia Pacific region is largely driven by China and India, with demand projected to have grown by 8% in 2021, up from a low of 2% in 2020 according to the International Energy Agency.

Key Players in Industrial Control Transformer Market

• ABB
• SCHNEIDER ELECTRIC
• SIEMENS
• GENERAL ELECTRIC
• EATON
• ROCKWELL AUTOMATION, INC.
• HUBBELL
• BOARDMAN TRANSFORMERS
• MCI TRANSFORMER CORPORATION
• DONGAN ELECTRIC COMPANY
• SNC MANUFACTURING CO., INC.
• FOSTER TRANSFORMER COMPANY
• TEMCO INDUSTRIAL
• MICRON
• CONTROL MAGNETICS, INC.
• CUSTOM COILS
• TROYTRANS
• RECO TRANSFORMERS PVT. LTD.
• TRUTECH PRODUCTS
• GRANT TRANSFORMERS

Recent Developments in Industrial Control Transformer Market

The industrial control transformer market has seen some recent developments. In January 2022, Eaton acquired Royal Power Solutions, a manufacturer of high-precision electrical connectivity components used in electric vehicles, energy management, industrial, and mobility markets. This acquisition is expected to help Eaton expand its portfolio of products and services.

In June 2021, GE-Prolec Transformers, Inc. signed an agreement with SPX Corporation to acquire its SPX Transformer Solutions business for USD 645 million. This acquisition is expected to enhance GE-Prolec's position as a key distribution and power transformer supplier, providing customers with a wider range of products and an improved portfolio.

In February 2019, Siemens AG, a leading player in the market, introduced its on-demand mobile resilience transformer leasing offer. This offering allows utility suppliers and owners to lease its PRETACT Plug & Play GSU Resilience Transformer for emergency response. This innovation can provide asset owners with a more reliable and secure power supply by leasing the critical equipment locally for quick installation, as the GSU resilience transformer can be installed in a short time.

The industrial control transformer market has seen several recent developments, primarily driven by advancements in technology and increasing demand across various industries.

One significant development is the use of smart industrial control transformers, which offer remote monitoring, predictive maintenance, and advanced diagnostics capabilities. These transformers are equipped with sensors that provide real-time data, enabling proactive maintenance and preventing potential system failures. The growing adoption of smart industrial control transformers is expected to boost the market's growth in the coming years.

Another development is the increasing focus on energy-efficient transformers that help reduce energy consumption and lower operational costs. These transformers are designed to provide stable and efficient power supply, while minimizing energy losses during transmission. Several manufacturers are investing in research and development to develop more energy-efficient transformers that comply with industry regulations and environmental standards.

Moreover, the market is also witnessing significant demand from the renewable energy sector. Industrial control transformers are crucial components in wind and solar power generation systems, where they are used to convert and control electrical energy for transmission and distribution. The growing adoption of renewable energy sources is expected to drive the demand for industrial control transformers in the coming years.

Furthermore, manufacturers are focusing on expanding their product portfolios and developing customized solutions to meet specific end-user requirements. This strategy is aimed at enhancing their market presence and gaining a competitive edge in the industry. Several manufacturers are also investing in mergers and acquisitions to strengthen their market position and expand their customer base.

Overall, the industrial control transformer market is expected to witness significant growth in the coming years, driven by the increasing demand from various end-user industries and the development of advanced and energy-efficient transformer technologies.