Powering the Grid: Manufacturers Boost North American Transformer Supply Capabilities through Stronger Domestic Investments
Transformer manufacturing investment across North America is rapidly gaining momentum, driven by soaring electricity demand from utilities rushing to support utility-scale infrastructure needs of power producers and large energy users.
Powering massive generation-load systems, such as AI data centers, has placed pressure on grid operators to sustain high capacity despite aging infrastructure, even with ongoing modernization efforts.
In Canada, this investment momentum is on full display. Hitachi Energy is investing $479 million CAD (over $330 million USD) to expand its North American operations by building a new transformer insulation factory in London, Ontario.
Scheduled for completion by 2028, the facility will manufacture electrical insulation pressboard and laminates critical to transformer production.
According to a company release, Hitachi Energy, the wholly owned subsidiary of Hitachi, Ltd., will establish this critical manufacturing capability to strengthen its domestic North American supply chain. Traditionally, North America has reportedly relied on European imports of insulation materials.
These insulation materials, such as pressboard (which supports the cooling process within transformers) and laminates (materials made by bonding two or more layers together), are vital for limiting thermal transfer, particularly in aging systems.
“The new Transformer Insulation Factory will strengthen supply resilience, support our customers' growth ambitions and help address one of the most critical bottlenecks in transformer manufacturing,” said Helmut Bockshammer, global product group manager for Hitachi Energy’s Insulation & Components Transformers Business Unit, in a statement. “As electricity demand continues to rise, we are taking decisive action to ensure the industry has the materials and capabilities needed to build the grids of tomorrow.”
The funding is a public-private collaboration. The Government of Canada contributed a $20 million CAD investment through its Strategic Response Fund (SRF), matched by up to $20 million CAD from the provincial government's Invest Ontario Fund. Natural Resources Canada is providing an additional $10 million CAD to Hitachi Energy Canada Inc. to develop the planned 226,000-square-foot facility, which is expected to create over 100 permanent skilled jobs amid the rise of new industrial projects.
The London facility is part of Hitachi Energy’s commitment to invest more than $2 billion to bolster the North American supply chain through 2027.
“Canada’s National Electricity Strategy sets an ambition to double the capacity of the country’s electricity grid by 2050, and delivering that growth will require a stronger domestic supply chain,” said Carla Vicente, managing country director at Hitachi Energy Canada.
ERMCO reinforces North American footprint in Canada and U.S.
Over in Quebec, the Electric Research and Manufacturing Cooperative Inc. (ERMCO), a U.S. producer of distribution transformers, is reinforcing its manufacturing footprint by expanding its factory in the city of Granby.
The 25,000-square-foot expansion announced this month brings the facility’s total size to 75,000 square feet and includes three new production lines to increase ERMCO’s manufacturing capacity for three-phase transformers, according to a release. The company held a ribbon-cutting ceremony event, which brought its production workforce and local officials out alongside ERMCO's parent company, Arkansas Electric Cooperative, Inc.
ERMCO noted that this production will enable them to better serve utilities, data centers and solar farms in Quebec amid evolving power demands.
"Every investment we make, every improvement we pursue and every expansion project we undertake is ultimately driven by our commitment to better serving our communities," said Tim Mills, ERMCO president and CEO, in a statement. “Our transformers built in Granby help power neighborhoods, schools, hospitals and businesses.”
Along with new production lines, this expansion is creating 200 new union and management jobs, utilizing local contractors for skilled-position openings, according to a company release. ERMCO-Pioneer’s general manager Pierre Lamarre stated that this expansion positions them to double production capacity to 200 units per month.
This expansion follows ERMCO’s massive project initiated earlier this year: a more than 566,000-square-foot manufacturing plant in Maricopa County, Arizona. Located roughly 30 miles west of Phoenix, ERMCO stated that over 500 jobs will be created through this larger investment.
The planned Arizona facility, expecting to become fully operational by 2027, will expand its three-phase transformer production capabilities across the broader North American market.
Together, these dual-country expansions highlight a decisive push by large-scale manufacturers to address critical domestic supply bottlenecks and modernize the performance capabilities of legacy utility transformers across the continent.
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Eric Moody