A major international manufacturer plans to expand one of its US facilities to help meet the growing demand for electric transformers at a time of supply constraints in the North American market.
Germany-based Siemens Energy is investing $150 million into an existing manufacturing facility. The expansion should require hiring an additional 600 people, according to a press release.
Supply chain issues, new construction and demand outpacing manufacturing capacity are several factors behind the shortage of electrical transformers, a critical power grid component.
Only a fifth of large transformer orders are filled by domestic suppliers, according to Siemens, and lead times can stretch to up to five years depending on the type of transformer and its specifications.
Transformers are critical power grid components as they step up or step down voltage as power is transmitted across the power grid. Transformer manufacturers say labor shortages, hard-to-source materials and worldwide shipping delays are among the culprits for the supply shortage.
See previous T&D World coverage of the transformer shortage here.
Hitachi Energy, another major transformer maker, is expanding its facility in Virginia.
Also, Virginia Transformer said last year it would open a new transformer manufacturing facility in Chihuahua, Mexico.
Siemens’ press release added that the expansion of renewable energy is being hindered by the lack of transformers. According to the company, 25% of global renewable projects are in jeopardy due to long transformer lead times, supply chain bottlenecks and lack of global transformer production.
Construction of the factory will begin in this year with the first transformers set to be manufactured in early 2026.
The project will also be supported by a Job Development Investment Grant (JDIG) from the state of North Carolina, according to the company.
The Department of Energy recently announced an R&D funding opportunity to boost the development of new transformer designs the department said it hopes will address supply chain constraints and the shortage of transformer units.
