The world haven’t seen a dramatic rise in electricity and gas prices since the oil crisis of the 1970s, and recently this is one of the most pressing issues the international energy markets and the media is dealing with. To understand the price increase, its impact on the economy and our daily life, we need to see that the world’s yearly energy consumption is steadily on the rise for half a century, with only brief setbacks. And its steady increase of decades has only been halted by the restrictive measures introduced in early 2020 in order to contain the coronavirus epidemic. According to a survey by energy consultancy firm, Enerdata, COVID-19 restriction has led to a fall in energy consumption of 1.1% globally and 4.3% in the EU for the first time in 11 years since the 2008-2009 global economic crisis. Though this change did not last, with consumption returning to 2019 levels a year and a half later, by the end of 2021.[1]

Electricity accounts for a significant share of global energy consumption, it is 15.7 percent of the energy mix, according to Our World in Data[2], and this share is projected to double in the European Union over the next 30 years. New factories, industrial parks, service centers and housing estates are being built, generating energy demand concentrated in small areas. The electricity supply to these areas can be made more economical by installing transformer stations close to them. In addition, the number of appliances that use electricity in households is increasing as well, for example the number and consumption of air conditioners are on the rise due to hotter summers and comfort needs. Hybrid vehicles also appeared in Hungary further increasing electricity demand.

Fortunately, while the demand for electricity is growing, the role of renewable energy power plants on the generation side is also gradually increasing. Wind, solar and biomass are examples of our untapped resources. As the capacity of renewable power plants increases, there is a need to use them more intelligently and efficiently. Currently, photovoltaic power plants on an industrial and household scale account for nearly 20% of total installed capacity. In 2020, solar power plants were only 16.3% of installed capacity, compared to 22.5% for wind power. So there is plenty of room for development, expansion and more conscious use of electricity. In addition to the problem of climate change, the volatility of energy prices now also raises the question: how can we make the electricity supply more economical, more efficient and more flexible, and how can we ensure its sustainable long-term operation to meet growing demand? Transformer stations near power plants and consumers and the Smart Grid System, a major technological development in the conventional electricity system in recent decades, have a role to play in the answer.

Transformers are an essential part of the electrical networks we know today. These machines, which transform the voltage level of electricity, ensure the correct transmission of energy, the transmission of electrical signals, the isolation of different voltages from each other and the economical transmission of electricity over long distances. Their lifetime can be up to 30-40 years and, if properly maintained and extended, their long-term consumption of materials and energy, and thus their environmental impact, can be significantly reduced. This is because 90 percent of the materials in transformers can be recycled: the tires in the windings, the steel in the iron cores and structural parts can be reprocessed. In addition, rapidly biodegradable ester-filled transformers, which are replacing conventional transformer oils, have been gaining ground in recent decades and are less environmentally damaging in their use of materials.

Transformers are therefore an indispensable part of the electricity system and play a key role in the operation of these smart grids. Indeed, the steady increase in energy consumption over decades and the growing reliance on renewable sources have made it inevitable to rethink the way the conventional electricity system works.

The smart grid offers a solution to coordinate conventional electricity systems, distributed and weather-dependent power plants and time-varying consumption. It involves digitalization, using advanced condition monitoring, measurement and information technology tools and methods to monitor and assess processes in the electricity system and then take the necessary measures to ensure economic and reliable operation. An important difference compared to the operation of a conventional electricity system is that the distribution of electricity in the smart grid is not unidirectional but bidirectional, i.e. the energy is not only supplied from the power plants but can be fed back, for example by using solar panels installed at the consumers’ premises. Furthermore, while in a conventional system the distribution of electricity is centralized, i.e. it depends mainly on the infrastructure built around the base load power plants, in a smart grid system electricity can come from multiple entry points – the smart coordination of which can also reduce the risk of peak loads and blackouts. Just as the smart grid has the advantage that, thanks to computer control, energy can be directed with high precision to where it is needed from areas where demand is falling. And the smart metering system can price energy more accurately, taking into account the current ratio of production to consumption, so that demand is better matched to supply.

As smart grid technology spreads, demand for network elements, including transformers, equipped with condition monitoring devices and sensors is expected to grow. Smart grid technology allows users to obtain real-time information on the status of the transformer and to make operational and maintenance decisions based on this information. The growing uptake of this technology is evidenced by the fact that in Western Europe, such as the UK, electricity suppliers are now almost exclusively ordering transformers prepared for condition monitoring.

It is now clear that a significant increase in the share of renewable energy sources, in particular solar power, is expected. In Hungary, too, a number of photovoltaic power plant projects are at the implementation, planning or preparation stage. In order to make more efficient and economical use of weather-dependent power plants, an increase in electricity storage capacity is expected. In addition, new solar parks and energy storage facilities will require transformers optimized for intermittent load. Thus, in time, the replacement and possibly refurbishment of ageing transformer parks on the transmission grid in our country will also take place, which will require significant transformer manufacturing capacity.

And today’s global energy market situation confirms that the next decades will be about finding innovative solutions for the electricity market and about developments that will make electricity more economical, sustainable and affordable. As well as the need for greater coordination between the generation, transmission, distribution and consumer sides to ensure efficiency. This will also boost the uptake of smart grid solutions, relying mainly on renewable energy sources, and transformers equipped with digitalized condition monitoring systems.

[1] Enerdata: Global Energy Trends – 2021 Edition

[2] Hannah Ritchie and Max Roser (2020) – “Energy”. Published online at