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Since full implementation of the mandatory national energy efficiency standard “Minimum Allowable Values of Energy Efficiency and Energy Efficiency Grades for Power Transformers” (GB 20052-2025), the distribution transformer market has been undergoing structural adjustment. The revised standard further tightens loss limits for Level 1 and Level 2 energy efficiency, accelerating industry-wide phase-out of high-energy-consumption legacy equipment.

Under the new standard, Level 1 energy efficiency products must account for no less than 40% of newly procured distribution transformers after July 1, 2026, and products below Level 2 energy efficiency are prohibited from procurement. In response, State Grid, China Southern Power Grid, and local power supply enterprises have revised tender specifications, explicitly treating energy efficiency grade as a key scoring criterion.

Transformer manufacturers face dual upgrade pressure on materials and processes. On one hand, demand is surging for low-loss core materials such as high-permeability silicon steel and amorphous alloy strip. On the other, production steps including coil winding and core stacking require higher-precision automation to ensure performance consistency.

Experts note that continued upgrading of energy efficiency standards is an important lever for carbon reduction in the power industry. Level 1 energy efficiency transformers are expected to become the absolute procurement mainstream for power grids and large commercial-industrial projects by 2028. Enterprises unable to meet the standards face market exit risk.