The global transformer oil market will grow at a compound annual rate of nearly 9 percent from 2016 to 2020, with mineral-based oils continuing to dominate, a market research firm projected. Silicone and biobased transformer oils are expected to grow at slightly faster rates while remaining smaller shares of the market.
The study estimates are based on the demand for transformer oil from power and distribution transformers worldwide.
United Kingdom-based Technavio Research said that 90 percent of the transformer oils consumed globally in 2015 were made with mineral base oil, and that they yielded $1.8 billion in sales revenue. The firm predicts the revenue will grow at an estimated compound annual rate of close to 9 percent to nearly $2.8 billion by 2020, constituting 91 percent of projected global demand.
Mineral-based transformer oil includes those blended with naphthenic and paraffinic base stocks. Technavio said the main factor driving this segment is the wide-scale use of mineral-based transformer oil in power and distribution transformers, switchgear and circuit breakers, especially in the Asia-Pacific region. This oil is priced reasonably compared to other forms and is therefore popular among the cost-sensitive customers in the region, Technavio said in a news release.
The company estimated the value of silicone-based transformer oils consumed in 2015 at $109.4 million and said they accounted for 5 percent of the global market. The research firm projected the segment would grow at a compound annual rate of almost 11 percent through 2020, reaching $180.2 million in revenue. That would account for 6 percent of the market. Silicone-based transformer oil is used in applications that prioritize fire safety and thermal stability, said Gaurav Mohindru, a Technavio lead unit operations research analyst.
The firm estimated the value of biobased transformer oils at $83.1 million in 2015, or 4 percent of the global market. Thats projected to increase by an estimated compound annual rate of more than 11 percent to $141.3 million by 2020, though it will still only constitute about 5 percent of the global transformer oil market.
Biobased transformer oil is produced from vegetable oil feedstock, Mohindru said. It does not have impurities, such as petroleum hydrocarbons, silicones or halogens. In the event of leakage or spillage, the oil biodegrades quickly, and its non-toxic nature and higher fire-resistant attributes may help this segment gain traction in the market. In addition, the rising demand for renewable energy sources from manufacturing companies is a major factor driving growth in this segment.
The report is titled, Global Transformer Oil Market 2016-2020.