Analysis of the Transformer Industry in Europe
In 2022, 2023, and 2024, the European transformer market size was USD 9.5 billion, USD 10.5 billion, and USD 11.5 billion, respectively. The expansion of the industrial sector, coupled with urbanization and rising electricity consumption, is expected to drive market growth over the coming decades.
In 2022, renewable energy accounted for approximately 43% of Europe’s total energy production. In 2024, the EU experienced a record growth in solar photovoltaic (PV) capacity, with newly installed solar PV capacity reaching 60 GW—surpassing any previous annual record. Currently, numerous renewable energy projects under construction are expected to significantly boost transformer demand. Cross-border interconnection projects are also playing a crucial role. Europe’s total grid capacity is 155 GW, with plans to add another 225–274 GW by 2030.
Shell-type and core-type transformers hold significant market shares due to their advantages in operational efficiency, performance, and versatility. Shell-type transformers position the windings inside the core, offering higher mechanical strength and lower leakage reactance. This design improves the short-circuit withstand capability, making them highly suitable for ultra-high voltage transformers in industrial and utility applications. The shell-type transformer market is projected to exceed USD 8.7 billion by 2034, achieving substantial growth. In 2024, core-type transformers accounted for approximately 39.8% of the market, and their importance is expected to increase as overall industry energy efficiency continues to improve.
Key Segments
In the European transformer market, the distribution transformer segment accounted for more than 56.5% of the market share in 2024, driven by rising global energy demand, rapid industrialization, and urbanization. This growth is primarily supported by grid upgrades, utility modernization, and the replacement of aging infrastructure. In 2021, the EU announced an allocation of EUR 5.84 billion from the Connecting Europe Facility (CEF) for energy infrastructure projects from 2021 to 2027, focusing on grid modernization. The power transformer market is expected to grow at a compound annual growth rate (CAGR) of over 3.5% through 2034. Power transformers effectively address voltage regulation and line loss issues in long-distance electricity transmission.
Additionally, instrument transformers—including current transformers and voltage transformers—are critical for safe measurement, control, and protection within power systems. They efficiently handle the variable output from renewable energy sources. With the expanding adoption of smart grid technologies and advanced metering infrastructure (AMI) in Europe, the instrument transformer market shows steady growth.
Regional Market Analysis
The German transformer market size reached USD 1.2 billion, USD 1.3 billion, and USD 1.4 billion in 2022, 2023, and 2024, respectively. In recent years, governments have introduced regulations and policies to manage electricity consumption, further highlighting the need for high-efficiency transformers. All these factors contribute to rising transformer demand across Europe.
France accounted for approximately 15.8% of the market in 2024, and this proportion is expected to increase further by 2034. In 2023, France invested around USD 55 billion in power infrastructure. As energy demand grows and power infrastructure undergoes modernization, these investments are expected to expand further.
The UK transformer market is projected to surpass USD 3.5 billion by 2034, driven by an increase in electrical infrastructure projects and accelerated industrialization. Industrial development, including factories and data centers, continues to drive demand for advanced power systems, promoting the growth of the transformer market in the region.
Overall, Germany plays a pivotal role in the European market. The country has invested heavily in sensors, controllers, and automation equipment, which are critical for transformer solutions. In 2023, Germany invested approximately USD 35 billion in renewable energy power plants, while leading companies such as Siemens and Schneider Electric are at the forefront of transformer technology development. German automation and energy systems have integrated smart grid, energy storage, and IoT solutions, which are now being deployed in commercial and industrial smart city applications.