Siemens Energy is taking action to tackle the scarcity of power transformers in the United States by making investments in a new factory

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Siemens Energy aims to tackle the prevailing scarcity of power transformers nationwide in the United States. To achieve this, they have committed a substantial investment of $150 million towards expanding their operations in Charlotte, North Carolina.

This expansion endeavor is expected to generate nearly 600 employment opportunities within the local community.

Currently, only a fifth of the demand for large power transformers in the United States is met by domestic supply, and it can take up to five years to fulfill orders. These transformers play a crucial role in connecting power generation to distribution, as they convert high-voltage electricity into lower voltages.

They are also vital for grid expansion, allowing for the reliable transmission of electricity over long distances and helping to stabilize electrical transmission across different regions. Tim Holt, a member of the Executive Board for Siemens Energy, acknowledges the ongoing energy transition in the United States, with a commitment of $3.9 billion to expand and update the country's grid within the next two years.

However, the success of renewable projects and grid expansion relies heavily on the availability of transformers. While the current market is primarily served by the Americas and Europe, there is a growing global demand for this critical technology.

Siemens Energy recognizes the long-term potential to increase their presence in the United States, building upon their established operations in North Carolina since 1969. To support the country's energy transition, Siemens Energy will establish its first transformer production facility in the United States, located in Charlotte, North Carolina. This facility will contribute to the existing operations and provide essential infrastructure for the country's energy goals. With the aim of reducing emissions by 50-52% from 2005 levels by 2030, there is a pressing need to decarbonize the U.S. grid.

However, this can only be achieved if there is sufficient availability of transformers. Studies indicate that the lengthy lead times for transformers, along with supply chain challenges and limited global production, put approximately 25% of global renewable projects at risk. Siemens Energy's investment will address these issues and boost domestic transformer production in the United States.

Furthermore, the project will receive support from a Job Development Investment Grant (JDIG) provided by the state of North Carolina, in addition to the company's investment.

Governor Roy Cooper made the announcement about the grant after it was approved by the state's Economic Investment Committee.

The current energy challenges require grid solutions and transformers that are adaptable to increased demand and fluctuations, which can impact the stability of the grid. Siemens Energy has a long history of manufacturing power transformers, spanning over a century. Their current range of transformers can deliver well above 1,000 MVA and 1,100 kV. The construction of the factory will commence this year, and the production of the first transformers is scheduled for early 2026.

Source: Siemens Energy website blog