Ⅰ. Status of the U.S. Power Grid System
According to relevant studies, the U.S. power system faces increasing demand for both newer iterations and new additions. The United States proposed the Grid2030 plan in 2003. The plan’s goal is to achieve a comprehensive modernization and upgrading of the U.S. power delivery system by 2030. The U.S. power system faces serious problems, including aging equipment, infrastructure issues, and institutional deficiencies. The main reasons for this are technological uncertainty, regulatory uncertainty, and financial uncertainty. Difficulties in attracting investment have made it difficult for the electricity system to meet growing demand. This has led to serious consequences: the number of blocked transmission corridors has increased dramatically, the likelihood of power outages has increased significantly, and annual losses due to power outages and power quality events range from $25 billion to $180 billion.
While the Grid2030 program has made significant progress, the challenges facing the U.S. power grid are constantly evolving. As ChatGPT sparks a new wave of artificial intelligence (AI) buzz, the energy consumption behind it continues to raise concerns. John Ketchum, CEO of NextEraEnergy, the largest developer of wind and solar farms in the United States, said that under the influence of AI technology, the annual growth rate of U.S. electricity demand will accelerate from the current less than 1% to about 1.8%. Currently, ChatGPT needs to process more than 200 million requests per day, and its power consumption is as high as 500,000 kilowatt-hours per day, according to public data. Calculated in one year, ChatGPT’s electricity bill will be as high as $28.04 million. As AI continues to grow, the demand for electricity rises dramatically, potentially putting further pressure on the U.S. power grid.
Ⅱ. Future Demand Growth Factors
1、Data Center Expansion (AI): has already been mentioned, and will not be recounted here.
2、Population and economic growth: by 2050, the U.S. population is expected to increase to approximately 400 million, and the economy will continue to grow. With population and economic development, the demand for electricity will also increase significantly.
3、Popularization of electric vehicles: The rapid popularization of electric vehicles will significantly increase the demand for electricity. It is expected that by 2050, electric vehicles will account for a large share of the U.S. auto market, which will require a large number of new charging infrastructure and supporting transformers.
4、The development of renewable energy: the rapid development of renewable energy sources such as solar and wind power will bring more distributed power. Access to these distributed power sources, the need for the corresponding transformer to power conversion and distribution.
Ⅲ. Current U.S. Power Grid System Demand
1、Transformer upgrade and replacement
Most of the investment in the U.S. power infrastructure is in 1950-1980, so most of the current U.S. transformers have reached the average life expectancy, the average life expectancy of 38 years. The aging of the equipment increases its failure rate, which, combined with the impact of extreme weather, leads to increased instability of power supply to the grid. According to IEA statistics on grid-related outages by cause in selected countries, the negative impact of grid-related outages on the U.S. economy will be $54 billion in 2021, and the economic impact of technically/equipment-related outages in the U.S. as a percentage of total GDP is higher than that of China, Germany, and Australia. Therefore, transformer upgrading and replacement is an indispensable part of the grid system.
2、The number of new transformers
– New energy to promote new demand
According to the EIA, the United States in 2022, the total power generation capacity reached 4.09 billion megawatt hours, wind, solar, hydro and other renewable energy generation in 2021, 2022 successively more than nuclear power and coal power. Among them, the U.S. wind power and photovoltaic power generation is growing rapidly, with utility-scale photovoltaic capacity increasing from 61GW in 2021 to 71GW in 2022, and wind power installed capacity increasing from 133GW in 2021 to 141GW in 2022.EIA predicts that the U.S. share of renewable energy power generation will increase from 21% in 2021 to 44% in 2050, with incremental growth mainly from PV and wind power. The significant growth in new energy generation in the U.S. will require corresponding transmission and distribution network upgrades and expansions to enable grid interconnection of new power plants coming online, which in turn will drive market growth for power and distribution transformers.
– Transportation electrification to drive new demand
Electrification of the U.S. transportation sector is expected to drive growth in the U.S. transformer market. According to a McKinsey report, the U.S. federal government’s goal is that half of all new passenger cars and light trucks sold in the U.S. by 2030 should be Zero Emission Vehicles (ZEVs), which include pure electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs). With the nation meeting its ZEV sales targets, McKinsey expects the U.S. electric vehicle fleet to grow from less than 3 million vehicles in 2022 to more than 48 million in 2030, or about 15 percent of all vehicles on U.S. roads, with the number of passenger vehicles likely to exceed 44 million. As the number of EVs on the road increases, the annual demand for electricity to charge them will surge from 11 billion kilowatt-hours (kWh) today to 230 billion kWh in 2030.The 2030 demand is estimated to be about 5 percent of total current U.S. electricity demand. At the same time, if grid infrastructure doesn’t keep up with the growth of electric vehicles, i.e., chargers, drivers may experience charging difficulties, such as waiting in long lines or only being able to charge at certain times and places. An overstretched grid will also be more vulnerable to extreme weather events and prone to blackouts. The dramatic growth in EV charging infrastructure will directly impact the grid in terms of higher grid capacity needs and grid flexibility, driving transformer demand.
CONCLUSION: According to a study by the National Renewable Energy Laboratory (NREL), by 2050, the U.S. distribution grid will need to increase the capacity of distribution transformers to between 160% and 260% of 2021 levels.
Ⅳ.Transformer Selection
The global transformer market reached $37.3 billion in 2021, with power transformers accounting for $23.6 billion and distribution transformers accounting for $13.7 billion. Sub-regionally, the total U.S. transformer market size is $6.3 billion, of which the power transformer market revenue is $3.85 billion and the distribution transformer market revenue is $2.45 billion. U.S. transformer market players include local and multinational companies, with the latter dominating. Due to the slow expansion of transformer production capacity, in the face of growing demand, the U.S. local manufacturers have insufficient production capacity, and the gap between supply and demand is now mainly made up by imports.
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High efficiency: energy efficient winding core structure design, able to withstand high current.
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