Saudi Arabia is focusing on the power generation industry to meet the growing population's electricity demand as well as the industrial sector's requirements. The upgrades and expansion of Saudi Arabia's underdeveloped electricity sector – both to reduce a large amount of power lost during transmission and to improve access to electricity in rural areas are providing strong opportunities for distribution and transmission network sector growth in the country. The Saudi Arabian government has implemented the Saudi Vision 2030, which is a strategic framework for reducing Saudi Arabia's reliance on oil, diversifying its economy, and growing the public sector. Furthermore, Saudi Vision 2030 prioritizes power-generating development, with a particular emphasis on renewable energy. Government initiatives like this are also aiding the growth of the Saudi Arabia transformer oils market. Saudi Arabia Transformer Oils Market size is forecast to reach US$37.4 million by 2027 after growing at a CAGR of 2.3% during 2022-2027
Transformer oils are widely utilized in transformers because when compared with other types of oils, these oils have higher cooling and insulating properties. Transformer oil is used in distribution transformers as a chemical stabilizer to extend the life of the transformers. Moreover, transformer oil is a significant component in transformer maintenance because transformer oil is essential in the transformer cooling process, due to this feature transformer oils are often utilized in distribution transformers. Thus, the distribution transformer line-up-gradation projects through redesigning and remanufacturing the existing distribution transformers in Saudi Arabia to save the costs associated with the new projects are expected to drive the market growth in Saudi Arabia. For instance, in September 2021, Saudi Electricity Company completed the up-gradation of distribution transformers with primary voltages of 33 and 13.8 kV, ranging from 231/133 V to 400/230 V. The future distribution transformer projects and up-gradation projects in Saudi Arabia will further accelerate the market growth.
The COVID-19 outbreak led to major economic problems and challenges for the power transmission, distribution, and generation industry. According to the International Monetary Fund (IMF), the GDP growth declined in Saudi Arabia more as a result of the economic impact of COVID-19. The government announced strict measures to slow the spread of the coronavirus, owing to which the construction output of power transmission, distribution and generation network slowed down and GDP declined, causing widespread concern and economic hardship for the transformer industry. According to EIA, Saudi Arabia, the Middle East's largest oil consumer, used 2.9 million barrels per day (b/d) of petroleum products and crude oil in 2020, down from 3.1 million b/d in 2019, owing to the global COVID-19 pandemic and related economic and industrial downturns. This was attributed to low demand from raw material processing industries due to the pandemic. During the lockdowns, transmission and distribution projects across the country were temporarily shut down. Since the start of the nationwide lockdown, which has been fuelled primarily by the closure of factories and offices in the commercial and industrial sectors. The aggregate technical and commercial (AT&C) losses suffered by power transformer companies were higher than the T&D losses. Utilities may defer some of their generation and T&D investments, affecting transformer manufacturing activities, depending on capital availability and financial conditions. As a result, the COVID-19 pandemic had a negative impact on the transformer oil market in Saudi Arabia. However, government relief packages for the power sector are leading to a quick recovery of the Saudi Arabia transformer oil market in the near future.
The power generation industry deploys transformer oils in components such as transformers, generators, reactors, and more to maintain the cooling capacity and reduce the high heat, as these components generate high heat which may result in a frequent breakdown. The growing interest of the Saudi Arabian government towards the development of renewable energy plants in Saudi Arabia is expected to prosper the demand for transformers, generators, reactors, and more transformer oils. This is anticipated to boost the demand for transformer oils, as these components utilize transformer oils for cooling purposes, thus this will result in market growth. For instance, the Saudi Ministry of Energy, Industry, and Mineral Resources (MEIM) established the Renewable Energy Development Office in 2017 intending to tender out 9.5 GW of primarily PV solar and wind energy by 2023, under this new facility development related to the wind and solar power generation will be developed. Moreover, the increasing wind power projects in Saudi Arabia are further anticipated to boost the demand for transformer oils as transformer oils are used as a cooling agent in generators, switches, and more. For instance, as of 2021, the Middle East’s largest wind power project in Saudi Arabia 400 MW Dumat Al Jandal utility-scale wind farm project has half been completed this project will be completed by 2022. Thus, with the rising power generation projects in Saudi Arabia, the market growth for Saudi Arabia's transformer oils is also rising during the forecast period.
For More Queries About "Saudi Arabia Transformer Oils Market" @ https://www.industryarc.com/support.php?id=19857
Saudi Arabia Transformer Oils Glass Market Growth Drivers:
Power Generation through Renewable Energy Targets of Saudi Government
The last few years have seen very rapid development of renewable energy, especially, solar and wind power in Saudi Arabia. A step-up transformer is installed on each turbine in a wind farm to enhance (step-up) the turbine generator output voltage from a few hundred volts to the collector system's medium voltage distribution levels. In solar power applications, a solar power transformer is used. Solar energy is converted to direct current (d.c.) using photovoltaic (PV) cells. Inverters convert the DC generated to a.c., and a step-up transformer connects the a.c. to the power grid. IEEE C57.159 2016 "IEEE Guide on transformers for application in distributed photovoltaic (DPV) power generation systems" is the international standard that applies to transformers for DPV generation. As a result, transformers play a crucial role in the production and distribution of solar and wind energy. Saudi Arabia's clean-energy project ambitions were renewed in 2018, with the renewables target for 2023 increased from 9.5 GW to 27.3 GW (including 20 GW of PV and 7 GW of wind), and the 2030 aim shifted to 58.7 GW (40GW of PV, 16GW of wind and 2.7GW of concentrating solar power). Saudi Arabia intends to generate nearly half of its energy from renewable sources such as solar, wind, and geothermal energy by 2030. Saudi Arabia has also begun to establish large-scale renewable energy facilities through its National Renewable Energy Program (NREP). For instance, ACWA Power connected the 300-megawatt (MW) Sakaka solar power plant (to the electric grid in November 2019. The 400-MW Dumat Al Jandal wind farm, Saudi Arabia’s first commercial wind project, came online in August 2021. In April 2021, Saudi Arabia signed power purchase agreements for seven solar projects with a combined capacity of 3 gigawatts. Thus, to meet the country’s renewable target new wind and solar projects are being taken up in Saudi Arabia. And since transformers are often used in wind and solar projects, the growing renewable energy development in the region will unlatch various opportunities for the transformer oil market. Thus, the increasing investment in renewable energy projects in Saudi Arabia will act as a driver for the transformer oils market.
Increasing Development of Power stations and Substations in Saudi Arabia
The increasing development of power stations in Saudi Arabia to increase the power generation capacity in Saudi Arabia is accelerating the demand for transformer oils in Saudi Arabia. The power transformers are utilized for transferring power from one circuit to another and during the transfer process, excessive heat may be generated which may impact the transformers, as a result of this transformer oils such as mineral oil and synthetic-based ester are often utilized in power transformers. Moreover, the use of transformer oils in power transformers helps to prevent corona formation and subsequent electrical breakdown under load, which helps in reducing the high maintenance cost associated with the power transformers. The future investment of Saudi Arabia towards new power substations is projected to drive the growth of the market in Saudi Arabia because transformer oils are utilized in power transformers to reduce excessive heat. For instance, in January 2021, Hyundai was given a US$71 million contract for a 380/132kV substation in Rafha, Saudi Arabia. As part of this project, a new power transformer will be installed in the substation, and it is expected to be completed by the end of 2022. Also, the new and expanding construction of substations in Saudi Arabia to facilitate transmission, distribution systems, and electrical generation is anticipated to fuel the Saudi Arabia transformer oils market. For instance, according to the Saudi Electricity Company, in the first half of 2021, in Saudi Arabia 28 new substations were constructed and 6 more substations were extended or refinished. With the development of power stations and substations in Saudi Arabia, it is predicted that there will be an upsurge in the demand for transformer oils in Saudi Arabia, which will eventually drive the market growth in Saudi Arabia during the forecast period.
The Major Players in this Market Include
The major companies in the Saudi Arabia transformer oils market include Royal Dutch Shell PLC (Shell Saudi Arabia), Castrol Ltd, Nynas, Sinopec, Chevron Corporation, Exxonmobil, Ergon Inc., Farabi Petrochemicals Inc., Gulf Chemicals and Industrial Oils Co., and Chemaoil.
The key focus of the companies has shifted towards product launches. In June 2020, Ergon launched HyVolt C50A, an arctic-grade transformer oil designed to endure extremely cold weather conditions. It's made for clients that need oxidation resistance, strong dielectric strength, and outstanding cooling capabilities at temperatures below minus 25 degrees Celsius. The product is also available through its Saudi Arabia subsidiary, which is projected to fuel the growth of the Saudi Arabian transformer oil market. In March 2020, NYNAS launched NYTRO BIO 300X, a bio-based transformer oil that is also marketed through its Saudi Arabia division. Because of its ultra-low viscosity, it is recyclable and provides excellent cooling.
To request for a quote, provide your details in the below link:
Mr. Venkat Reddy
Email: [email protected]
Contact Sales: +1-970-236-3677
About IndustryARC: IndustryARC is a Research and Consulting Firm that publishes more than 500 reports annually, in various industries such as Agriculture, Automotive, Automation & Instrumentation, Chemicals and Materials, Energy and Power, Electronics, Food and Beverages, Information Technology, and Life sciences and Healthcare.