Rystad Energy’s white paper on grid equipment published in late May 2026, examined pricing, lead times, and procurement for transformers, high-voltage circuit breakers and switchgears.

The report highlighted that intermittent renewables are expected to account for nearly 48% of global generation by 2040 – up from just 2% of the share in 2010. Meanwhile, traditional power sources are expected to fall from 67% of global generation in 2010 to 29% by 2040.

However, system reliability depends on the availability of grid equipment to accommodate the projected increase in solar and wind capacity.

Global grid capex is set to surpass $650 billion this year – up 5% from last year and more than double the investments recorded in 2020. This six-year increase can be attributed to price inflation, said Rystad. The firm highlighted the strong surge in demand for grid gear in recent years, although it said the supply constraints that plagued the market are showing signs of easing thanks to new investments by OEMs into diversified production lines.

Equipment prices and lead times will remain high, however, for the time being. Rystad said typical lead times for transformers and high-voltage circuit breakers remain at least two to three years for manufacturers based in Europe and North America. This is twice as long as the average lead time in 2019.

Rystad does not expect unit prices to increase beyond current levels, with the report noting that both lead times and prices have stagnated. Recent European transformer awards for 50-100 megavolt-ampere (MVA) units remain at around $30,000 to $35,000 per MVA.

The analyst said it expects 2026 to be the start of a big expansion wave lasting out to 2028 for transformer manufacturing capacity. The market outlook forecasts additions of almost 200 GVA this year alone, with most of this demand coming from the United States, the world’s biggest importer of transformers.

Global transformer manufacturing capacity reached 4,700 gigavolt-amperes (GVA) in 2025, supported by around 400 plants operated by more than 260 manufacturers.

Rystad said the effect these upcoming capacity expansions will have on global supply chains and price deflation or inflation are difficult to know for sure. Too many variables exist, including input costs for raw materials such as copper, aluminum, steel, and oil. The analyst’s report did provide more certain forecasts for demand. In the near-term, demand comes from utilities and grid operators looking to build out grid infrastructure, while longer-term demand is expected to come from data centers and industrial electrification.

Rystad warned of limited near-term downside risk, particularly from smart grid-enhancing technologies and battery energy storage, which it claimed could reduce grid intensity.

“While battery deployment can cut grid capex needs by reducing congestion through better asset utilization, each storage system is also linked to direct grid equipment demand. A general slowdown in electrification trends represent a downside risk, but the trend will not reverse – and the fundamental demand picture for grid equipment, including transformers, switchgears and cables, remains robust,” the report stated.

The report’s authors also called on policymakers to keep addressing grid reliability issues and security standards as more intermittent generation comes online.

Overall, wiser deployment of grid infrastructure is needed to add more electrons on the grid. Electricity is expected to be biggest energy carrier in most energy-consuming sectors globally, and much of this electricity will be supplied by intermittent generation, such as solar and wind.