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Is it time for transformer production to return to the UK?

RJW Intelligent Engineering Solutions > Articles > Is it time for transformer production to return to the UK?
11transformer production

With rising costs and supply chain challenges impacting on businesses and consumers, could the once-booming UK transformer production industry experience a resurgence?

For years, the bulk of transformers and much of the raw materials needed to construct them have been manufactured abroad by a select group of companies. 

But rising costs of materials and energy, challenges around Brexit and geopolitical uncertainty, the time could be right for a return to domestic manufacture of such a vital component. 

Michael Windsor at RJW thinks that change might be coming. “I have found it really sad to see electrical steel manufacture leaving the country during the time I’ve been in the industry. We still manage to produce a range of transformers in-house, but lots of competitors have gone out of business or moved overseas, and the industry has definitely changed. I think the transformer industry in this country has probably shrunk as far as it can, and maybe things will start to turn around – that can only be good for lots of other sectors who rely on transformers in their systems.” 

Global demand 

The global requirement for transformers shows no signs of letting up despite the impact of the pandemic. While Covid resulted in a fall in demand for power which in turn had a knock-on impact on transformer production, the sector has bounced back dramatically.  

A report into the global market revealed it was due to increase in value from $27.7 billion before the pandemic began in 2019, to $50.8 billion by 2027. 

What is driving demand?

The rise in energy price around the world has largely been due to pent-up demand. With economies shuttered due to lockdowns, countries simply needed less energy – but that requirement has bounced back with a vengeance right around the globe.

But that same requirement for energy has driven a similar demand for the physical power systems which facilitate them, with transformers a vital part of those systems. This has naturally led to an increasing need for them as a component.

Green energy

But post-pandemic demand is not the only driver, so too is the need for greener, cleaner energy. The race is on around the world to harness new energy systems, driven not only by the need to protect the planet, but also being seen to be doing so. 

Many companies and consumers no longer want to do business with firms which are perceived to not be doing their part to drive forward the green agenda. A report by Deloitte found 28% of consumers had stopped buying certain products due to ethical or environmental concerns. A global report from The Economist Intelligence Unit, commissioned by WWF, also revealed a 71% rise in online searches for sustainable goods globally over the past five years.

With this in mind, the adoption of tech such as smart power grids is expected to grow. Smart power grids are essentially networks of smart transformers and digital substations that can regulate their own voltage. By utilising this kind of real-time adaptability, there are fewer outages and grids can respond to fluctuating power demand instantly. Transformers are vital for carrying out that function.

An increased need for other renewable energy sources and increased adoption of high voltage transmission technologies such as HVAC, HVDC and UHV will continue to help drive demand too. 

As legislation and consumer opinion continues to move business towards more carbon friendly methods of operating, this is likely to continue to have an impact on the demand for transformers. 

Governments too are increasing spending on green projects, with Joe Biden’s $1tn infrastructure bill having renewable energy technology as a central component. 

The UK Picture

The rebound in demand for transformers globally will be replicated in the UK.

The UK dry type transformer market – driven by the rise in the adoption of dry-type transformers for industrial, utility, and commercial applications – is projected to grow by 1.06% to grow from £154 million in 2019 to £166 million by 2026.

But while that demand is returning, manufacture could face challenges going forward and that could have an impact on the domestic market when it comes to imports and other associated charges. 

Manufacturing of electrical steel now takes place almost exclusively outside the UK, with the transformer industry having moved largely overseas to counties such as  Sweden, Germany, Turkey and Russia – with sanctions on the latter likely to have an impact on supply following its invasion of Ukraine. 

Transformer manufacture can take time and requires a large initial investment, with electrical grade steel only manufactured by a few companies globally. 

Another challenge is that building some of the supporting infrastructure for transformers can be costly, adding to the overheads for their manufacture and supply. 

Global supplies 

The electrical steel market is expected to grow from $33.8 billion last year to $45.8 billion by 2026, but there is a strong competition for it from industries outside of transformer production.  

The automotive sector for example, which uses electrical steel to provide high erosion protection from exhaust systems in the vehicles, is likely to account for a significant percentage of electrical steel being produced, with markets such as China and the United States likely to continue fuelling demand.

Geopolitical concerns 

The cost of materials from Europe will be directly impacted by the Russia/Ukraine crisis according to European Construction Industry Federation director-general Domenico Campogrande. He said the conflict would ‘certainly further exacerbate’ material price inflation across the continent. Fears surrounding China and Taiwan could also further exacerbate concerns over supplies of materials in the coming months and years. 

Brexit and supply chain issues

The impact of Brexit continued to pose challenges for manufacturers in the UK and the EU. 

A recent report to Parliament’s Public Accounts Committee found there had been a clear increase in costs, paperwork and border delays’ for UK business since Brexit not helped by repeated delays to new import regime. 

This has had an impact on where companies source their supplies, with annual UK goods imports from outside the EU surpassing the value of those from inside the EU for the first time since ONS records began in 1997. Imports from the EU totalled £22.2bn compared to £25.4bn from all other countries in 2021.

Looking to the future 

Two things are clear. The first is that demand for transformers is only going to increase, the second is that challenges – be they geopolitical, logistical or financial – will put pressure on supplies in the coming month and years. With that in mind, enhancing the country’s manufacturing capacity could provide a solution. 

Bernard Darlington, RJW’s Managing Director, is excited about the possibilities:

“Transformers are an important part of the systems we manufacture and repair, and as part of our drive to being a ‘one-stop-shop’ for our customers we’re pushing the range of transformers that we can manufacture inhouse. It means we can be more responsive to any problems, and also usually keep costs down, so the more of it we can do the better!”

To find out more about our inhouse transformer manufacturing capabilities, contact one of our account managers on 0151 207 2074 or email

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