Top domestic transformer manufacturers have their hands full for the next two years as India doubles down on expanding its power generation base and the emerging opportunity in North America as it replaces ageing infrastructure.

“Generally, Indian market rises for 3-4 years and then declines for 2-3 years. However, this time it is stable and will stay the same for 12-15 years,” said Visweswara Reddy, Chairman & MD, Shirdi Sai Electricals (SSEL) Group.

Besides, India’s growing renewables base and expansion of thermal capacity is also fuelling demand, he told businessline. The SSEL Group, which has installed over 6 lakh transformers globally, is among India’s leading transformer manufacturers.

Reddy noted that there is a “solid” demand for inverter duty transformers (IDTs) — used in solar, wind, hybrid and battery energy storage systems (BESS) installations. He divided the transformer market into three segments — extra high voltage (EHV) transformers (220 KV and above), medium distribution transformers (IDTs) and normal distribution transformers.

“Shirdi Sai and Toshiba are the only two companies in India that manufacture all ranges of transformers with backward integration. In fact, we are also ramping up capacity,” he said.

Reddy said there is demand for all types of transformers in North America, where the electrical infrastructure is over 50 years old. “The requirement for extra capacity in North America is coming at about 3 per cent. For comparison, if they do 5 per cent, it will take 20 years to replace all transformers,” he added.

Domestic capacity utilisation is constrained by supply-chain limitations for critical items such as CRGO & amorphous steel, RIP bushing and insulations, Reddy rued. Both cold rolled grain oriented (CRGO) and amorphous steel are not produced in India whereas the industry requires 3.5-4 lakh tonnes per annum. India, one of the largest consumers of CRGO steel, faces a 30 per cent shortfall, per a Global Trade Research Initiative (GTRI) report. Demand is likely to grow by 10-12 per cent annually, boosted by the goal to integrate 500 GW of RE into the grid by 2030. The demand will also grow amid the Bureau of Energy Efficiency mandating a star-label upgrade for distribution transformers starting January 1, it added.

Arindam Ghosh, Partner for Power Advisory at Nangia & Co, said, “Around 20 per cent of installed transformers are either overloaded or have surpassed their operational lifespan, increasing the risk of failures and compromised grid reliability.” Besides, discoms are burdened with debts of around ₹6 lakh crore which, coupled with escalating costs of transformers and potential project delays, could further exacerbate the financial woes, he added.