Rejuvenating a Mature Industry – A Snapshot of the European Transformer and Switchgear Market

Rejuvenating a Mature Industry – A Snapshot of the European Transformer and Switchgear Market

Vikas Ravindran, Team LeadVikas Ravindran, Team Lead

Energy & Power

19th April 2011

Today’s Presenter: Vikas Ravindran

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Focus Points

• Scope of the study

• Technology and component overview

• Market Overview

• Industry Challenges

• Force Field Analysis of Drivers and Restraints

• Revenue Forecast – Transformers & Switchgears

3

• Porter’s Five Forces

• Tier and Market Share Analysis

• Regional Hot Stops and Emerging Geographies

• Summary of Key findings

• The scope of the study includes Western Europe, as detailed in the

map below. The total market forecast is developed for all European

countries included in the scope.

• Detailed analysis is conducted on the following eight

countries/regions: Germany, France, United Kingdom, Italy,

Benelux, Scandinavia, Rest of Europe (Austria, Greece, the

Republic of Ireland, Portugal and Switzerland).

• The above countries are selected based on the size of the market

and upcoming opportunities.

Geographical Scope Technology Scope

Power transformers

Distribution transformers

Industrial Transformers

Isolation Transformers

Instrument Transformers

Scope and Definitions

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Countries within the scope of

the study and analysed in detail

Countries within the scope of

the study, not analysed in detail

Countries not within the scope

of the study

High Voltage Switchgear

Medium Voltage Switchgear

Low Voltage Switchgear

Not included into the study scope

Included into the study scope

Other Metrics

• The base year for the study is 2009

• The forecast period is 2010-2016

• The study period is 2006-2016

• All prices quoted in the study are in US Dollars ($) unless otherwise

specified

Technology and Component Overview

• Technologies

• Laminated Core

• Torodial

• Autotransformer

• Stray Field transformer

• Polyphase transformer

• Resonant transformer

• Ferrite Core

• Oil cooled transformer

• Cast resin transformer

• Isolating transformer

Types of Transformers TechnologiesTypes of Transformers Technologies

• Oil circuit breakers

• SF6 circuit breakers

• Vacuum circuit breakers

• Air circuit breakers

Types of SwitchgearTypes of Switchgear

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• Isolating transformer

ApplicationsApplications

• Substation

• Industries

• Commercial

• Switchgear market is in its mature phase with slow growth

• Increased focus on renewable energy sources, especially off-shore wind farms, act as a major driver. With the advent of smart grid, switchgear manufacturers are presented with new market opportunities.

• Recent economic downturn as well as price based competition is slowing down the growth of switchgear.

Market Overview

Transformers

• Power & Distribution transformers constitute close to 70 percent of the total transformers sales in Europe.

• Increased focus on interconnection of grids is driving the need for efficient transmission technologies

• Distribution transformers market has suffered a setback owing to a slowdown in the construction market.

• Power & Distribution transformers constitute close to 70 percent of the total transformers sales in Europe.

• Increased focus on interconnection of grids is driving the need for efficient transmission technologies

• Distribution transformers market has suffered a setback owing to a slowdown in the construction market.

Switchgears

6M5B8-14

• Recent economic downturn as well as price based competition is slowing down the growth of switchgear.

Slowdown in constructionmarkets

Entry by Asian manufacturers

Slowdown in demand

Factors of Influence New Market Trends

Unutilized capacities and piling up of inventory

Increased pricing pressure

Slowdown in market uptakePrice volatility of raw materials

Source: Frost & Sullivan

Industry Challenges

Non Uniformity in

Regulation Impeding New

Technology Development

European Transformer

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Price Volatility of Raw

Materials

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Transformer and Switchgear

Markets

3Entry by Asian

Companies

1

Impact of Global

Economic Downturn

4

Force Field Analysis of Drivers and Restraints

Driv

ers

Driv

ers

Harmonisation of gridsIncreasing focus on total grid

automation across Europe

Increased focus on renewable energy sources, particularly offshore wind energy

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Re

stra

ints

Re

stra

ints

Denotes Long term Impact

Denotes Current Impact

Increase in price based competition

Unfavourable economic conditions influencing

investments


Revenue Forecast – Transformers & Switchgears

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

1,800.00

2,000.00

Reven

ues (

$ M

illi

on

)

Distribution Transformer Power Transformer

Power and Distribution Transformer : Revenue Forecasts (Europe), 2006-2016

Power and Distribution Transformer : Revenue Projection by Transformer Type (Europe), 2009 and 2016

1,650.0

1,947.8

1,560.2

1,250.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

Distribution

Transformer

Power

Transformer

Re

ven

ue

s (

$ M

illio

n)

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0.002006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Year

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

1,000.0

2009 2016


0

200

400

600

800

1000

1200

1400

1600

1800

Reven

ues (

$ M

illi

on

)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Year

High Voltage Medium Voltage

930.01,097.9

1,659.8

1,314.6

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

2009 2016

Medium

Voltage

High

Voltage

High and Medium Voltage Switchgear Market : Revenue Forecasts (Europe), 2006-2016

High and Medium Voltage Switchgear Market : Revenue Projection by Segment (Europe), 2009 and 2016

Porter’s Five Forces

-Product differentiation is low+Price is a major factor for new

entrants

- Too few companies concentrate onservice after sales

Threat of New Entrants

High

-Low levels of product differentiation-Number of companies that offer complete

and customized solution is minimal

Bargaining Power of Suppliers

Weak

Bargaining Power of Buyers

High

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- Transformers and Switchgears form anintegral part of the transmission anddistribution space

Threat of Substitute Products

Weak

- There are no product substitutes

Degree of CompetitionMedium

- Standardized equipmentavailable

+Price competitivenessbetween the suppliers putsthe buyers in the driver’sseat

Key: “+” denotes higher threat/bargaining levels; “-” denotes lower threat/bargaining levels

Tier and Market Share Analysis

Tier 1 : 65%

ABB, Siemens, Areva

T&D, Alstom, Schneider

Electric

Power and Distribution Transformers Market: Tier Analysis by Installed Capacity (Europe), 2009

Tier 1 : 60%

ABB, Siemens,

Schneider Electric,

Alstom Grid

High and Medium Voltage Switchgear Market : Tier Analysis by Installed Capacity (Europe), 2009

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Tier 3 : 15%

Imefy, Vonroll, Incoesa, Gedelsa and others.

Tier 2 : 20%

Crompton Greaves, Efacec, SGB

Tier 3: 10%

S&C Electric, Driescher Wegberg, Hawker Siddeley

and others.

Tier 2: 30%

Eaton, Lucy Switchgear, Efacec


Regional Hot Stops and Emerging Geographies

Country Renewables Infrastructure Smart Grid

Germany 1 1 3

France 5 5 5

United Kingdom 4 2 2

Italy 3 3 1

Benelux 6 4 4

Spain 2 7 6

Scandinavia 7 6 7

ROE 8 8 8

Transformer and Switchgear Market: Region-wise Ranking (Europe), 2009

Transformers and Switchgear Market : Regional Snapshot

(Europe), 2009

Opportunity indicator

Low

High

Opportunity indicator

Low

High

Low

High

The United Kingdom

Scandinavia

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Note: The countries are ranked on a scale of 1-8, 1 being the most favourable and 8

being the least favourable market opportunities.

Germany

17%

France

16%

United Kingdom

17%

Italy

12%

Scandinavia

14%

ROE

8%

Spain

8%

Benelux

8%

Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

Transformer and Switchgear Market : Country-wise Percentage Split (Europe), 2009

Germany

Italy

France

Note:

Size of the bubble indicates the market size.

Color of the bubble indicates the current growth.

LowLowLow Kingdom

Spain

Benelux


Summary of Key Findings

Transformer industry is highly localized, with imports meeting only 20 percent of demand globally. Transformer industry is highly localized, with imports meeting only 20 percent of demand globally.

Strong local participants dominate the transformer market.Strong local participants dominate the transformer market.

Power transformers market has witnessed continuous expansion, although on a smaller scale. Power transformers market has witnessed continuous expansion, although on a smaller scale.

The distribution transformers market has endured the brunt of the economic downturn with The distribution transformers market has endured the brunt of the economic downturn with

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Utilities, which are the primary customers of switchgear manufacturers, require further investment towards up-

grading of the electricity grid and this might slow down the growth of switchgear investments.

Utilities, which are the primary customers of switchgear manufacturers, require further investment towards up-

grading of the electricity grid and this might slow down the growth of switchgear investments.

The distribution transformers market has endured the brunt of the economic downturn with

almost zero development in certain pockets of Europe.

The distribution transformers market has endured the brunt of the economic downturn with

almost zero development in certain pockets of Europe.

Switchgear sales are highly project based and the market is expected to boom owing to the recent impetus from

renewable energy and smart grid implementation.

Switchgear sales are highly project based and the market is expected to boom owing to the recent impetus from

renewable energy and smart grid implementation.

The industry at the moment is seeing price wars due to the increase in price of raw materials. The industry at the moment is seeing price wars due to the increase in price of raw materials.

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For Additional Information

Chiara Carella

Corporate Communications Director

Europe

+44 (0) 207 343 8314

[email protected]

Juliet Shaw

Sales Director

+44 (0) 207 343 8363

[email protected]

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Vikas Ravindran

Team Lead

Energy & Power

+91 446 160 6666

[email protected]

Rejuvenating a Mature Industry – A Snapshot of the European Transformer and Switchgear Market

Technology

Transcript of Rejuvenating a Mature Industry – A Snapshot of the European Transformer and Switchgear Market