Siemens Energy Invests in New Factory for Power Transformer Production in the U.S. to Overcome Shortage

Written by Paulo Nogueira

Published on 15/02/2024 at 20:27

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Siemens Energy Invests $150 Million to Expand Operations in Charlotte and Build Essential Power Transformers in the U.S. for Energy Transition and Vital Infrastructure.

Siemens Energy is taking steps to combat the shortage of power transformers in the United States. With an investment of $150 million, the company will expand its operations in Charlotte, North Carolina, building a new factory that will be essential to meet the growing demand for these critical equipment for the energy transition and the country’s infrastructure.

In addition to meeting the need for power transformers, Siemens Energy’s new factory in Charlotte will also help strengthen the production supply chain for energy equipment in the U.S. With over 600 new jobs created, the initiative not only boosts the local economy but also represents a significant milestone for the country’s energy industry, ensuring a more stable and reliable supply of power transformers.

Power Transformers: Driving the Energy Transition

local jobs. Currently, only 20% of the demand for large power transformers in the United States is met by domestic suppliers, who may have lead times of up to five years. Power transformers connect generation to distribution and are an essential part of any electrical distribution network, converting high-voltage electricity to lower voltages.

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Custom-built and approximately the size of a standard school bus, power transformers are essential components for expanding the electrical grid, enabling the reliable transmission of electricity over long distances and helping to stabilize the connection between regions.

Tim Holt, Executive Board Member of Siemens Energy, states, ‘The energy transition in the United States is in full swing, with $3.9 billion committed to expanding and upgrading the electrical grid over the next two years. However, renewable energy projects and grid expansion can only occur through the availability of transformers.

The North American market today is predominantly served by the Americas and Europe, but as global demand for this crucial technology increases, we see long-term potential to expand our presence in the United States, leveraging our long-standing presence in North Carolina, where we have operated since 1969.

In Charlotte, North Carolina, Siemens Energy will expand existing operations by constructing its first transformer production facility in the United States, which will provide vital infrastructure to facilitate the country’s energy transition.

With the United States aiming to reduce emissions by 50-52% by 2030 compared to 2005 levels, the race to decarbonize the country’s electrical grid is underway, but this can only be realistically achieved through the availability of transformers.

Studies predict that 25% of global renewable energy projects are at risk due to long delivery times for transformers, supply chain bottlenecks, and a lack of global production of these components. Siemens Energy’s investment will address these challenges and increase domestic transformer production in the United States.

In addition to the company’s investment, the project will also receive support from a Job Development Investment Grant (JDIG) from the state of North Carolina. Governor Roy Cooper announced the grant following its approval by the state Economic Investment Committee.

The current energy challenges demand flexible solutions for the electrical grid and transformers capable of handling the increased demand and fluctuations that affect grid stability. Siemens Energy has been manufacturing power transformers for over a century, and its current line delivers capacities exceeding 1,000 MVA and 1,100 kV.

Construction of the factory will begin this year, with the first transformers scheduled to be produced in early 2026.

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Siemens Energy Invests in New Factory for Power Transformer Production in the U.S. to Overcome Shortage

Siemens Energy Invests $150 Million to Expand Operations in Charlotte and Build Essential Power Transformers in the U.S. for Energy Transition and Vital Infrastructure.

Power Transformers: Driving the Energy Transition

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Siemens Energy Invests in New Factory for Power Transformer Production in the U.S. to Overcome Shortage

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