Investments in power grids worth billions are being announced, and there is a presence of high optimism at fairs and conferences. In short, this is the climate we have been anticipating for years

Banović, Mladen

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  9 EDITORIAL MESSAGEwww.transformers-magaz ine .comDear readers,I am sure we can agree that after many trials in the last few years, good times have finally arrived in our industry. Factories are full of orders for the next one to two years, restric-tions have been lifted practically everywhere, the situation in the supply chain has improved. Investments in power grids worth billions are being announced, and there is a presence of high optimism at fairs and conferences. In short, this is the climate we have been antici-pating for years.Given the very optimistic forecasts relating to the energy transition, a highly essential con-cern now is how to meet the high demand for transformers and what we can expect in the future. One of the ways is, of course, the ex-pansion of the existing production capacities. I often hear about plans for a 30 % or 50 % capacity expansion, which is quite significant. This seems to be the dominant line of thinking, where the demand for energy equipment is ex-pected to grow to such an extent that the in-crease in total production capacity would not exceed the market demand and thus would not threaten the business in the future.Based on all my investment discussions, fac-tors that could increase the risk of capacity expansion investments are yet to be adequately considered.The first is that due to the tight lockdown in China during the last three years, Chinese manufacturers have been absent from the in-ternational market to a significant extent. As a result, the available production capacities in China could not adequately and timely re-spond to the increase in demand on the inter-national market, which apparently created the image of a global lack of production capacities. However, with the recent opening, Chinese companies are returning to the world market in style. They expect to take their share of the pie, which must affect the supply and demand relationship. The only question is to what ex-tent. A crucial variable is how the demand for transformers will move in the following years, which partly depends on the available capital for energy investments. Here we come to the second factor - the financial system’s stability.In recent weeks, we have witnessed dramatic events in the banking sector with the collapse of certain banks. The Credit Suisse case warns that this is more than just a com-mon market development. The pearl of the Swiss financial industry, founded in 1856, collapsed practically overnight. I do not intend to delve into the financial sector analysis but only draw attention to the devel-opment of events at the macro level and draw some parallels. None of us who followed the fi-nancial crisis of 2007-2008 wants to recall that period, especially not now when the market situation is quite good. However, the collapse of several banks, one of which is Credit Su-isse, reminds us, at least to some extent, of the beginning of that crisis. Indeed, we would all be over the moon if it was just a coincidence. However, when making decisions about sig-nificant investments, even what appears to be a coincidence should be taken as a signal for increased caution, at least in as much to con-sider various investment scenarios in energy networks in the following years, depending on the future developments in the financial sector.On the other hand, we have factors that pos-itively affect the demand, such as outdated energy equipment, which in some markets is genuinely a generator of high demand, and the already mentioned energy transition, which increases the need for equipment even in the most modern energy networks.All the abovementioned factors can highly impact market trends in the next few years, so forecasting is exceptionally complex. We will continue to closely monitor the latest in-formation and trends and transmit them promptly as before because this is closely related to our Industry Navigator project, within which we organize conferences and carry out trend research in much more detail than possible with usual methods. The following Industry Navigator conference, Sustainability and Digitalization 2023, will be held in Dubrovnik, Croatia, June 6–8, where we will also discuss the key trends shaping our industry. That is why I invite you to follow what we are preparing and join us as participants or speakers. A rich social program awaits us, in-cluding a study visit to a state-of-the-art sub-station, so we will all have the opportunity to learn a lot in a pleasant environment.Finally, I hope you find the content we have prepared for this issue valuable. Also, I invite you to visit the Transformers Academy page, where we bring new content prepared for you by top experts every week.I wish you a pleasant reading! Mladen Banovic, Editor-in-ChiefTRANSFORMERS MAGAZINEISSN 1849-3319 (Print) ISSN 1849-7268 (Digital)EDITORIAL BOARDEditor-in-Chief:  Mladen Banovic, PhD, Merit Services Int., Croatia mladen.banovic@transformers-magazine.comEXECUTIVE EDITORSMichel Duval, PhD, Hydro Quebec, CanadaJean Sanchez, PhD, EDF, FranceMichael Krüger, PhD, OMICRON electronics, AustriaJin Sim, Jin Sim & Associates, Inc., USAJuliano Montanha, SIEMENS, BrazilCraig Adams, TRAFOIX, AustraliaArne Petersen, Consulting engineer, AustraliaZhao Yongzhi, Shandong Electrical Engineering & Equip-ment Group Co., Ltd, ChinaBarry M. Mirzaei, LargePowerTransformers Inc., CanadaBhaba P. Das, PhD, Hitachi Energy, SingaporeEDITORSDaosheng Liu, Jiangxi University of Science and Techno-logy, ChinaMislav Trbusic, University of Maribor, SloveniaDr. Mohammad Yazdani-Asrami, University of Strathclyde, United KingdomDr. Shuhong Wang, Xi’an Jiaotong University, China Nam Tran Nguyen, PhD, Hitachi Energy, USAASSISTANT EDITORPedro Henrique Aquino Barra, MSc, EESC/USP – University of São Paulo, BrazilArt Director: Momir BlazekPhoto: Shutterstock.comLanguage Editor: Lidija KasikADVERTISING AND SUBSCRIPTION+44 20 373 474 69sales@merit-media.comSUBSCRIPTION RATES:Print edition: $125 (1 year, 4 issues)Digital edition: $60 (1 year, 4 issues)Online edition - full access: $20 (1 year, 4 issues)Online edition - free access: free of charge for r egistered userswww.transformers-magazine.comTRANSFORMERS MAGAZINETransformers Magazine is published quarterly by Merit Media Int. d.o.o., Setaliste 150. brigade 10, 10 090 Zag-reb, Croatia. Published art i cles do not represent official position of Merit Media Int. d.o.o. Merit Media Int. d.o.o. is not responsible for the content. The responsibil ity for articles rests upon the authors, and the re sponsibility for ads rests upon advertisers. Man uscripts, photos and other submitted docu ments are not returned.REPRINTLibraries are permitted to photocopy for the private use of patrons. Abstracting is permited with credit to the source. A per-copy fee must be paid to the Publisher, contact Subscription. For other copying or republication permis sions, contact Subscription. All rights reserved.Publisher: Merit Media Int. d.o.o.Setaliste 150. brigade 10, 10 090 Zagreb, CroatiaContact: +385 1 7899 507Contact: +44 20 373 474 69 UKVAT number: HR09122628912www.transformers-magazine.comBank name: Zagrebacka bankaBank identifier code: ZABAHR2XBank IBAN: HR8023600001102375121Director: Mladen Banovic, PhD

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