China's power demand is growing rapidly and power supply is tight. The high-speed construction of the national power grid and the government's investment in fixed assets drive the market demand for power transmission and transformation equipment, giving companies engaged in power transmission and transformation equipment such as transformers a great room for development. The great development has brought great prosperity. The huge power construction funds have brought opportunities and challenges to the transformer industry, and the industry has achieved great development in history. Transformer is an important equipment for power distribution in the power grid. It mainly includes two parts: a transmission transformer running on the main grid and a distribution transformer running on the terminal.
Since the early 1990s, foreign companies have noticed that China has such a huge transformer market, as well as preferential tax policies and cheap and skilled employees, have come to China to establish joint ventures, and most of them have obtained controlling rights. They have gained a lot of share in the Chinese market and made a good profit. Driven by the strong promotion of electric power construction, the economic operation of the national transformer industry has maintained a good development trend, and the industry growth may continue until 2018.
Transformer market demand mainly comes from two aspects: on the one hand, the rapid growth of installed power generation capacity; on the other hand, the capacity ratio of transformer equipment and power generation equipment is gradually rising. According to the general rule, the capacity of transformer equipment should be 12: 1, that is, each additional 10MW of installed capacity requires 120MVA transformers, of which 500kV transformers are 12MVA. In 2004, China produced approximately 440 million kVA of transformers. The new installed capacity from 2005 to 2007 is forecasted to be 68 million kilowatts, 70 million kilowatts, and 60 million kilowatts, respectively. The corresponding transformer capacity requirements are 810 million kVA, 840 million kVA, 720 million kVA, a growth rate of more than 30% in the next three years compared to 2004.