Transformer monitoring market sees uptick despite smart grid slowdown

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GTM Research calls the smart grid transformer market "a cocktail of monitors, sensors, software, diagnostics and analytics solutions that promises to guard against outages and better protect utility grid assets" and expects strong U.S. growth in transformer monitoring hardware.

A greater need for reliability, efficiency and predictability, as well as an aging workforce, aging assets, and increasing volume of data created by smarter devices on the grid will drive the transformer monitoring market from $112 million annually to $755 million by 2020, according to GTM.

"Utilities must invest in monitors, sensors and software for their new and aging transformers," said Ben Kellison, the report's author and a smart grid analyst at GTM Research. "They are the backbone of the U.S. alternating current grid, and they range from one of the most expensive utility assets to low-cost street corner devices manipulating power to ensure our toasters work properly."

Transformer technologies are not typically rolled out in waves at utilities, instead monitoring is added at the most critical or expensive assets or added into specifications during the acquisition of new transformers. There are a few notable exceptions, according to GTM, including San Diego Gas and Electric's 2020 Reliability Plan, Arizona Public Service's TOAN program, American Electric Power's adoption of ABB's Asset Health Center Solution, and Toronto Hydro's pilot secondary transformer monitoring program.

"We have seen the overall smart grid market slow down, but we see transformer monitoring and software markets as a high-growth area driven by the strength of the secondary transformer market," said Kellison. "Grid giants like ABB, Alstom, GE, Schneider and S&C Electric have already caught on to the opportunity the transformer technology offers and are well-positioned to lead the market."

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