Saudi Arabia Smart Transformer Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Saudi Arabia Smart Transformer Market Size

Saudi Arabia Smart Transformer Market Trends & Growth Drivers

Digitalization in Power Sector Is Significant Market Trend

• The power sector is moving toward digitalization. Modern technologies that contribute to the digitalization of the power sector include control systems, sensors, transmission software, transformers, and the industrial internet of things.
• To improve efficiency in regulating the voltage, power equipment, including transformers, should be digitalized as part of the smart grid.
• Saudi Arabia’s Vision 2030 highlights the nation’s aspirations for a future driven by innovation and technology. It majorly focuses on the growth of the digital economy, infrastructure investment, and regional development.
• The USD 500-billion NEOM project in Saudi Arabia's northwest reflects the kingdom's future objectives. The purpose of this futuristic metropolis is to be a hub for sustainability, innovation, and human welfare.
• NEOM aims to provide personalized services, connected infrastructure, and minimal environmental impact with cutting-edge technologies, such as AI, IoT, and renewable energy.

Growing Energy Consumption Is Driving the Market Growth

• Saudi Arabia’s energy sector is transitioning from fossil fuels, including coal, oil, and gas, to renewables, such as solar and wind.
• This energy transition aims to reduce carbon emissions from various industrial sectors and mitigate the greenhouse effect, which contributes to climate change.
• Additionally, the NEOM green hydrogen–solar PV project is a collaborative approach between ACWA Power, Air Products, and NEOM to develop the world’s largest green hydrogen facility in Saudi Arabia.
• This project has an impressive investment value of USD 8.4 billion.
• Its goal is to accelerate the use of green hydrogen by producing 600 tons of it per day by the end of 2026.
• Operating solely on renewable energy is a major step toward Saudi Arabia's aim of becoming carbon-free by 2025.

High Initial Investment and Competing Technologies Act as Restraints on Market Growth

• Large-scale projects demand substantial funding. Smart transformers are challenging to develop and place in large-scale projects due to their high cost.
• Furthermore, in comparison to traditional transformers, smart transformers come up with advanced technology which involves high upfront costs. Smaller and medium enterprises with limited financial resources find it difficult to acquire these high initial investment requirements.

Saudi Arabia Smart Transformer Market Analysis

Product Insights

• Distribution transformers will hold the largest share of the market 45%, in 2024. They are widely used to reduce voltage levels before electricity delivery to residential, commercial, and industrial customers.
• Distribution transformers are suitable for substations and utility networks.
• Power transformer is expected to show the highest CAGR, of 14.5%, over the forecast period. The rapid increase in the use of power transformers is due to their ability to reduce power loss during power transmission in industrial sectors, such as petrochemicals, manufacturing, and construction, which require continuous load.

The products included in this report are:

• Power Transformer (Fastest-Growing Category)
• Distribution Transformer (Largest Category)
• Specialty Transformer
• Instrument Transformer

Phase Insights

• The three-phase category holds the larger share of the market 65%, in 2024.
• Three-phase smart transformers provide a steady and reliable power supply, which plays a crucial role in the construction of commercial and residential infrastructure.

The phases included in this report are:

• Single-Phase
• Three-Phase (Larger and Faster-Growing Category)

End User Insights

• The utilities category holds the largest share of the market, in 2024, and it is expected to show the highest CAGR, of 40%, over the forecast period.
• Utilities generate electricity and distribute it to residential, commercial, and industrial sectors. This is why they need a large number of transformers of varying voltage ratings for various purposes at various places along the power line network.

The end users included in this report are:

• Industrial
• Commercial
• Residential
• Utility (Largest and Fastest-Growing Category)

Geographical Analysis

Province Insights

• Geographically, Al-Riyadh will generate 35% of the countrywide revenue and will dominate the market in 2024. It is also expected to witness the highest CAGR, during the forecast period. This is due to ongoing renewable projects, including solar and wind energy. Riyadh is the financial center, the largest metropolitan hub, and the most populous city; therefore, energy consumption is higher than in other provinces, which is driving the growth of the smart transformer market in this region.

  The following provinces have been analyzed in this report:

• Al-Riyadh (Largest and Fastest-Growing Province)
• Makkah
• Al-Madinah
• Al-Qaseem
• Eastern-Region Province
• Aseer
• Tabouk
• Hayel
• Northern Border
• Jazan
• Najran
• Al-Baha
• Al-Jouf

Competitive Landscape

The Saudi Arabian smart transformer market is consolidated due to the presence of a few international players holding significant shares. The rising economic diversification prospects, such as those in industries, are bringing overseas smart transformer companies to the country.

Saudi Arabia Smart Transformer Industry News

• In October 2023, South Korea and Saudi Arabia signed a total of 50 business deals in Riyadh, strengthening the bilateral relationship between the two governments and their respective enterprises. The deals include 40 MOUs and six contracts in energy, infrastructure, manufacturing, robotics, and finance.
• In September 2023, Hyundai Electric received a USD 51-million (KRW 67.8 billion) deal to supply substation equipment for Saudi Arabia's smart and green city, NEOM.
• In May 2023, Hitachi Energy signed agreements with ENOWA and Saudi Electricity Company to design and implement the first phase of the futuristic NEOM region transmission system.