Hitachi Energy to invest $1.5B to bolster transformer production

April 23, 2024 | by

One Energy’s fully digital transformers sits elevated on a containment pad that is self-extinguishing in the unlikely event of a fire. Breaker and transformer by Hitachi Energy. Containment pad by Sanergrid. (Photo: Business Wire)

Hitachi Energy announced investments of over $1.5 billion to ramp up its global transformer manufacturing capacity to keep pace with growing demand and support the long-term plans and electrification efforts.

The investments will gradually expand the company’s global transformer capacity by 2027 and are in addition to the $3 billion already announced to progress on the electrification of the energy system.

“The demand for transformers and electrical equipment has grown at an unprecedented scale, and we are investing to address our customers’ mid- and long-term needs. We are developing our global footprint and capacity and progressing in digitalization and technology to deliver even more sustainable and reliable solutions,” said Bruno Melles, Managing Director of the Transformers Business at Hitachi Energy, during the company’s flagship customer event, Energy & Transformers Days in Rome, Italy.

The company also announced an investment of around $180 million in a new transformer factory in the Vaasa region, Finland — a 30,000-square-meter campus.

Hitachi Energy’s broader growth efforts include the recently announced larger than $30 million expansion in Bad Honnef, Germany. Leveraging the company’s global footprint, the company said additional investments will follow in Europe, the Americas, and Asia to meet the growing demand for power and distribution transformers. 

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Hitachi Energy’s transformer facility expansions include the ongoing project in South Boston, Virginia, US, and other recently completed projects at Jefferson City, Missouri, US, and Dos Quebradas, Colombia. In addition, the company has inaugurated new cutting-edge factories in Chongqing, China, and Hanoi, Vietnam, together with a new transformer service center in Welshpool, Australia

The National Renewable Energy Laboratory (NREL) recently completed the first phase of a study that quantified the number, capacity, age, and use of the nation’s current transformer stock — something it says has never been done before. Most of the nation’s transformers are owned by over 3,000 distribution utilities across the country, which NREL said added some complexity to quantifying them.

Based on the transformer data collected, NREL estimates distribution transformer supply may need to increase 160%–260% by 2050 compared to 2021 levels to meet residential, commercial, industrial, and transportation energy demands. NREL says The demand increase is largely driven by aging transformers and electrification. NREL is also examining potential demand increases from extreme weather events and utility undergrounding and resilience programs that use various types of transformers.


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