Powering the Growing Energy Transition
As a major type of winding wire, the enameled wire has its primary downstream application in power equipment, accounting for about 30% of its usage. In recent years, with the global energy transition, the demand for power equipment in the market has continued to rise. As the core equipment in the power system, its demand has been increasing, drives a steady increase in demand for enameled wire.
Aging Grids and Development of New Energy
Looking at the global power equipment market, it can be found that the aging problem of power grids in Europe and the United States has become increasingly prominent. According to the IEA, about 50% of power grid facilities in developed countries have been in use for over 20 years, with Japan, Europe and the United States being particularly prominent. For example, 70% of large transformers in the United States have been in service for more than 25 years, and in recent years, due to frequent natural disasters, a large amount of inventory has been consumed, making replacement need urgent.
In order to cope with the aging problem and promote the new energy transition, European and American countries are increasing investment in power grids. The EU is investing around €23 billion annually to expand its distribution network and further integrate offshore renewables. The UK plans to increase capital investment by £2 billion by 2026 for onshore and offshore transmission projects. The United States has proposed expanding the transmission system by 60% by 2030 and tripling the transmission capacity by 2050 to meet the challenges of new energy growth and extreme weather. These plans have greatly increased the market demand for power transformers, which provides excellent opportunities for the production and sales of enameled wires.
Image from: Catherine Clifford, Why America’s outdated energy grid is a climate problem, CNBC. cnbc.com/2023/02/17/why-americas-outdated-energy-grid-is-a-climate-problem.html
Power Transformers in the Era of Green Energy
In addition, the rapid development of new energy and the growth of power demand for electricity are also reasons for the rapid increase in the demand for power transformers. New energy power transmission requires efficient power conversion equipment, and the power generation needs to be regulated by adjusting voltage through transformers. At the same time, the demand for power transformers for large-scale grid connection is constantly increasing. Due to the acceleration of China’s UHV construction, the upstream and downstream of the industrial chain have benefited greatly, and the demand for its supporting UHV transformers in the midstream has surged significantly.
In the context of carbon neutrality, energy conservation, emission reduction and green development have become an important strategic choice for the economic development of various countries. The new power system is the general direction of the future development of China’s power system. As the key equipment of energy conversion and transmission, power transformers play a crucial role in the power system, and their energy efficiency directly affects the energy utilization efficiency and carbon emission intensity. Therefore, the demand for high-quality and reliable power transformers is expected to grow steadily in the future.
Jingda: Delivering Excellence
As a company focused on the production of high-quality enameled wire, Jingda will continue to provide reliable enameled wire products, based on customer needs, and contribute to the enameled wire and transformer market with products that always exceed expectations.
Reference
Rui Yang, Weijia Li, Han Wang. (n.d.). Depth | transformer industry: domestic demand + export, resonance development of domestic and foreign markets【 China West Power XinYangrui Team 】Weixin Official Accounts Platform. https://mp.weixin.qq.com/s/5Itf9lxYVdhqW7Kt1xKpvw
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