On Monday, Hitachi Energy revealed a major $250 million investment aimed at boosting the production of essential components for electrical transformers. This expansion will significantly enhance output at their transformer facilities located in Virginia, Missouri, and Mississippi.
Notably, over 40% of this investment is set to be allocated to operations in the U.S. The plan involves hiring more than 100 new employees in the country to develop domestic manufacturing capabilities, thereby strengthening the local supply chain.
In addition to the U.S., Hitachi Energy’s investment will also target production enhancements in Europe, India, and China. This funding builds on a previously announced $6 billion investment plan for the Hitachi portfolio, which includes $1.5 billion earmarked specifically for boosting global transformer production.
According to Hitachi Energy, the surge in demand for electricity, especially driven by industries like data centers and artificial intelligence, has led to a significant increase in the need for transformers. “As demand surges beyond what was initially projected, we are committed to increasing our production and fortifying supply chains on a global scale,” the company stated.
The Electric Power Research Institute reports that electricity consumption from data centers could potentially double, making up over 9% of total U.S. generation by 2030.
A recent report from the National Infrastructure Advisory Council highlighted that the time it takes for utilities to acquire new transformers has more than doubled recently, now stretching to 120 weeks. Experts warn that the rising energy demand from data centers will worsen these delays. Factors contributing to this shortage include workforce shortages and limited domestic production capacities.
The National Infrastructure Advisory Council also suggested that the federal government establish a “strategic virtual reserve” for electric transformers to prevent manufacturing issues from hindering electrification initiatives or essential replacements. Concurrently, private companies are ramping up their manufacturing efforts.
For instance, Eaton announced a $340 million investment in February to boost U.S. production of their three-phase transformers, with production and hiring expected to begin in 2027 at their facility in Jonesville, South Carolina.