1. Top-level Policy Support Strengthens, Anchoring Energy Conservation, Carbon Reduction and High-quality Development
Since 2026, a number of national industrial policies have been intensively introduced, clarifying the development path of energy efficiency improvement, technological upgrading and scenario expansion for the power transformer industry.
The Implementation Plan for High-quality Development of Energy-saving Equipment (2026–2028), jointly issued by the Ministry of Industry and Information Technology (MIIT) and three other departments, sets quantitative development targets for the transformer industry: by 2028, new high-efficiency energy-saving transformers will account for more than 75%, and energy-saving transformers in service will reach 15%. The plan focuses on tackling core components such as high-permeability ultra-low-loss silicon steel sheets, amorphous alloy strips and high-end insulating materials, promotes new products including high-efficiency silicon steel three-dimensional wound core transformers, large-capacity solid-state transformers and flexible DC transformers, and requires improved transformer adaptability for new energy scenarios such as wind power, photovoltaics, energy storage and hydrogen energy, driving the industry to shift from "scale expansion" to "quality and efficiency improvement".
In terms of grid investment, the scale of national grid fixed asset investment will continue to expand during the 15th Five-Year Plan period. Total investment in the UHV sector is expected to exceed RMB 800 billion, with 15 new UHV DC green power corridors put into operation, and the scale of west-to-east power transmission exceeding 420 million kilowatts. Distribution network investment will grow at a CAGR of 5.8%, with an annual scale of about RMB 380 billion, directly driving demand for all categories including converter transformers, distribution transformers and smart grid equipment. State Grid Corporation of China and China Southern Power Grid have taken the lead in fully implementing energy efficiency standards in procurement, achieving 100% energy-saving level for newly added transformers and leading the industry's energy efficiency upgrading.
In terms of the standard system, China has established a transformer standard system covering all scenarios including UHV, power distribution and new energy. The Class 1 energy efficiency index has reached the international leading level, and a number of technical standards have become important references for international standards, providing technical support for domestic equipment to participate in global competition.
2. Three Major Demands Released Intensively, Market Expands Steadily
Currently, China's power transformer industry is witnessing the intensive release of three major demands: domestic grid construction, overseas market renovation, and AI computing infrastructure, maintaining high industry prosperity.
In the domestic market, China's total transformer output reached about 3 billion kVA in 2025, with the overall industry expanding steadily. Structural upgrading is prominent: as the most technically barrier-rich segment, UHV transformers see strong demand for high-end products such as ±800kV converter transformers and 1000kV AC transformers, driven by key projects like the Ningxia–Hunan Power Transmission Project and Gansu–Zhejiang DC Project. In the distribution transformer sector, rural grid consolidation and urban distribution grid intelligent transformation continue to advance, with the share of Class 1 energy-efficient amorphous alloy transformers and three-dimensional wound core transformers rising continuously. Transformers for new energy and energy storage grow rapidly, as the acceleration of wind power, PV grid integration and electrochemical energy storage projects drives fast growth in orders for box-type transformers and energy storage-specific transformers.
AI computing infrastructure has become a new growth engine. High-power, high-stability and low-loss transformers are core equipment in the power distribution system of data centers. With the acceleration of national AIDC construction, demand for data center-specific transformers has grown explosively, and orders for some enterprises have been scheduled into 2027. New products such as solid-state transformers are rolled out faster, enabling flexible grid interconnection and multi-port flexible access, adapting to emerging scenarios such as high-power supercharging and PV-storage-charging integration, and becoming a key node for the synergy between computing and power.
Overseas markets serve as the core growth engine of the industry. According to data from the General Administration of Customs (GAC), China's total transformer exports reached RMB 64.6 billion in 2025, up nearly 36% year on year, with the average export unit price rising to RMB 205,000, up about one third year on year, showing a trend of growth in both volume and price. In the first four months of 2026, exports reached RMB 21.77 billion, up 27% year on year, among which exports of large-capacity transformers above 10 MVA grew by nearly 100%. Regionally, demand for old grid renovation in Europe and America and new energy construction in Southeast Asia and the Middle East is released intensively. Chinese transformers have been exported to more than 100 countries and regions worldwide, with the share of high-end markets such as North America and the EU rising continuously. From January to July 2026, exports to the US reached nearly RMB 4 billion, up more than 50% year on year.
3. Multiple Technological Breakthroughs, High-end Equipment Achieves Full Independent Control
After years of technological accumulation through UHV projects, China's transformer industry has evolved from following to leading, achieving core breakthroughs in large capacity, high voltage, energy efficiency and scenario adaptation.
In the field of UHV high-end equipment, domestic core equipment has achieved full independent control. The ±800kV high-end converter transformer independently developed by TBEA, weighing 570 tons per unit with fully independent intellectual property rights, has been successfully applied to key national projects such as the Ningxia–Hunan Power Transmission Project. As of June 2026, the company's UHV AC and DC transformers have passed 100 consecutive first-pass tests, reaching the top manufacturing level in the industry.
The project Key Technologies for Independent Design and Manufacturing of UHV Converter Transformers led by Baobian Electric broke foreign technology blockades in electrical steel strips and formed leads. The achievements have been applied to multiple UHV lines including Changji–Guanquan ±1100kV and Baihetan–Jiangsu ±800kV, winning the First Prize of Science and Technology Progress Award of Hebei Province.
XD Changbian Transformer successfully developed a 750 MVA flexible DC converter transformer, setting the record for the largest capacity of a single converter transformer in the field of flexible DC transmission, and supporting the construction of the Gansu–Zhejiang ±800kV UHV flexible DC project.
In the field of energy-saving and material technology, China has achieved independent mass production of core materials such as high-grade grain-oriented silicon steel and amorphous alloy strips. The world's first 10kV energy-saving amorphous alloy three-dimensional wound core oil-immersed power transformer has been successfully developed, with energy efficiency significantly better than the Class 1 energy efficiency standard. The no-load loss of ultra-Class 1 energy-efficient transformers is more than 40% lower than that of traditional products, and the whole-life carbon footprint is greatly reduced. Technologies such as three-dimensional wound cores, dry-type designs and eco-friendly insulating oil continue to spread, enabling products to adapt to various complex environments such as urban centers, offshore platforms, deserts and frigid zones.
In terms of intelligence and new scenario adaptation, smart transformers have realized functions such as real-time operation status monitoring, online fault diagnosis and remote control, and can deeply coordinate with smart grids, virtual power plants and energy storage systems. In response to the volatility and high harmonic characteristics of new energy power generation, domestic enterprises have developed special transformers for new energy grid integration with fast response capability. For data center scenarios, domestic solid-state transformers have achieved overseas commercial breakthroughs, successfully supplying large AI computing centers in North America, marking that China has reached the international advanced level in the field of new power electronic transformers.
4. Full Industrial Chain Advantages Highlighted, Chinese Equipment Accelerates Global Layout
The rapid rise of China's transformer industry in the global market is rooted in a complete full industrial chain system, with multiple competitive advantages in technology, cost, delivery and service.
From the industrial chain perspective, China has built the world's most complete transformer production system, with production capacity accounting for about 60% of the global total, making it the world's largest transformer manufacturer. Core raw materials and components upstream such as silicon steel, copper materials, insulating parts and bushings are all independently supplied domestically. The midstream has formed a complete industrial cluster covering R&D, design, manufacturing and testing. Downstream capabilities in installation, commissioning, operation & maintenance and EPC turnkey contracting continue to improve. The independent and controllable full industrial chain not only ensures supply chain stability, but also makes unit product costs 30%–40% lower than European and American manufacturers, with significant cost-performance advantages.
In terms of delivery capability, domestic enterprises have significantly shorter delivery cycles than overseas manufacturers, relying on large-scale production capacity and a mature supply chain system. In response to the urgent needs of overseas projects, Chinese enterprises can compress the delivery cycle to within 6 months, while European and American manufacturers usually take 12 to 18 months. This advantage is particularly prominent in fast-growing markets such as the Middle East and Southeast Asia. Currently, the global supply gap of power transformers reaches 30%, and China's production capacity has become the core force to fill the global supply-demand gap.
In terms of overseas expansion mode, domestic transformers are upgrading from single product export to an integrated model of "equipment + service + solutions". Leading enterprises have laid out overseas production bases and service networks one after another. Jinpan Technology has production bases in North America, Malaysia and Poland, realizing localized delivery and service. Enterprises such as TBEA and China XD Electric have overseas EPC turnkey capabilities, providing full-process solutions from survey and design, equipment supply to installation and operation, greatly enhancing overseas market competitiveness.
5. Industry Outlook: Long Prosperity Cycle Established, Broad Space for Global Cooperation
Overall, driven by global energy transition, grid renovation and computing infrastructure, the power transformer industry is at the starting point of a long prosperity cycle. In the short term, with the continuous implementation of the 15th Five-Year Plan grid investment in China and the intensive release of overseas market demand, the industry will maintain steady growth. In the medium and long term, with the deepening of new power system construction, new scenarios such as offshore wind power, large-scale energy storage, smart microgrids and hydrogen energy will continue to drive technological iteration and demand expansion of transformers.
For the global market, China's mature transformer manufacturing capacity, complete product system, rich engineering experience and cost-effective solutions can provide strong support for grid upgrading and energy transition in various countries. In the future, there will be expanding space for Sino-foreign industrial cooperation in fields such as UHV equipment export, promotion of green energy-saving transformers, smart grid construction and new energy supporting facilities. China's power transformer industry will also play a more important role in the global energy transformation.